The rationales behind family business digitalization Open Access

Digital transformation is reshaping business landscapes, requiring enterprises to adopt new technologies. As a developing country, Indonesia presents distinct economic characteristics that significantly impact the digitalization efforts within family businesses. Its specific economic environment, such as resource limitations, infrastructural inadequacies and varied institutional frameworks, distinctly influences the family business behaviours and decision-making processes related to digital adoption (Sayekti, 2018; Widhianto, 2002). Therefore, a capacity for flexible and responsive behaviours is essential for effectively managing this situation (Faizurrohman, 2021). Digital transformation incorporates a business capability to adjust, respond and align itself for success in hasty evolution (Guinan, Parise, & Langowitz, 2019; Klus & Müller, 2021). Governments from developing markets have implemented several initiatives to support enterprises in digitalization (Hidayati, Hermawan, Soehadi, & Hartoyo, 2021; Tirdasari, Bachtiar, & Sendi, 2021), including the family business. The quicker its adjustment to the modern digital standard, the greater its assurance of seamless continuity (Burt, Choi, & Dixon, 2021), which is critical for the family business (Tirdasari & Dhewanto, 2020b, 2020a).

The family business is a cornerstone of economies in developing countries, notably Indonesia, significantly contributing to employment, innovation and national development (Anggadwita, Profityo, Alamanda, & Permatasari, 2019; Hasan, Musa, Azis, & Tahir, 2020). In Indonesia, the family business ranges from small and medium enterprises (SMEs) to large conglomerates, forming a substantial portion of the economic landscape (Hasan et al., 2020; Pratono & Han, 2021; Waldron, 2021). Unlike Western regions, the family business in Southeast Asia tends to adopt digital technologies reactively, primarily driven by external pressures. It focuses more on maintaining operational continuity and achieving cost efficiency rather than pursuing radical innovations. Similarly, the family business in Africa and Latin America faces infrastructural challenges and financial limitations, which contribute to a slower pace of adoption (Canale, Müller, Laveren, & Cambré, 2024; Iwu, Malawu, Ndlovu, Makwara, & Sibanda, 2024; Lasio, Gómez, Rosso, & Sánchez, 2024; Zapata-Cantu, Sanguino, Barroso, & Nicola-Gavrilă, 2023).

Despite its economic importance, the family business typically exhibits unique characteristics, including strong familial control, generational succession challenges, conservative strategic orientations, resistance to change and resource constraints (Burt et al., 2021; Kane et al., 2019; Mihardjo, Sasmoko, Alamsjah, & Elidjen, 2019; Soluk & Kammerlander, 2021; Sugiarsono, 2021; Tirdasari, Dhewanto, & Arief, 2022; Tehseen et al., 2019). Chow (2021) highlights how the family business has distinct characteristics shaped mainly by its founders. The family business benefits from strong family values, long-term thinking and loyalty, which help the enterprise remain resilient and competitive. They also encounter challenges, such as handling leadership transitions, managing family relationships and balancing traditional approaches with new strategies. To maintain and improve its performance, the family business should effectively combine the founder’s vision with professional management practices, enabling the company to thrive in the changing business environment (Tirdasari et al., 2022).

The process of encouraging the family business to adopt digital adoption is never an easy job. The exponential growth and multifaceted nature of digital technologies create a complex decision-making environment for companies (Fitzgerald, Kruschwitz, Bonnet, & Welch, 2013). A growing body of research highlights the susceptibility of large organizations to missteps in their digital business strategy development (Gide & Wu, 2007). International government surveys reveal a persistent trend: reluctance among enterprises to embrace digitalization within their business practices (Fosty et al., 2013).

For more effective digital initiatives, it is necessary to recognize what intensifies rationalized digital adoption among family businesses. Despite hurdles, the family business implemented digital technology to enhance performance (Benitez, Ayala, & Frank, 2020; Diez-Olivan, Del Ser, Galar, & Sierra, 2019). Digital adoption can streamline bureaucratic processes within the family business, allowing for swifter decision-making and preserving the entrepreneurial spirit (Burt et al., 2021). Additionally, it is a crucial instrument for enhancing a company’s overall capabilities (Elidjen, Mihardjo, & Rukmana, 2019; Mihardjo et al., 2019). Studies have documented the economic benefits of digitalization for family businesses in Europe. These include increased efficiency, improved sales figures and a more potent competitive edge (Soluk & Kammerlander, 2021). These family businesses leverage digital technology to achieve success early, showing an outstanding benchmark to encourage more family businesses to digitize.

Nevertheless, with their distinct decision-making processes, family-owned businesses remain under-researched in digital adoption. Research exists on digitalization (Ishack & Lipner, 2020; Kumar, Raut, Narwane, & Narkhede, 2020) and family businesses globally (Koentjoro & Gunawan, 2020; Poza & Daugherty, 2018), but limited scholarship focuses specifically on the intersection of these two elements in Indonesia. Concerning this issue, understanding the general context is more crucial than relying exclusively on rigid quantitative information (G. Baker, Lomax, Braidford, Allinson, & Houston, 2015). This study explores the rationales behind digital adoption in the family business, addressing a gap in the literature. Using multiple case analyses, this study identifies the key drivers of digital adoption and proposes a conceptual model to aid practitioners and policymakers. The findings shed light on family business players and the specific factors driving digital adoption within the family business. It also contributes valuable insights for academic discourse.

Digitalization generally refers to integrating digital technology into managerial discourse to improve performance, enhance customer experience, and drive innovation (Feranita, Kotlar, & De Massis, 2017). It includes both front-end and back-end transformation. Scholars advance this understanding as a strategic, organization-wide endeavour over mere technology adoption (Gong & Ribiere, 2021). Several frameworks conceptualize digitalization across varying dimensions, such as strategy, technology, culture, and capability (Fitzgerald et al., 2013). Similarly, it reflects a strategic reconfiguration of business processes and organizational structure to leverage technological advancements for sustained competitiveness (Liao et al., 2017), with four key enablers, including cyber-physical systems, the Internet of Things (IoT), cloud computing and big data analytics. Gong and Ribiere (2021) highlighted the lack of convergence in definitions, arguing for a holistic perspective that incorporates technological, organizational and societal changes. However, existing definitions often prioritize large corporations and overlook the idiosyncrasies of the family business.

Most digitalization frameworks assume companies are fully prepared, overlooking the family business’s unique challenges. Verhoef et al. (2021) model assumes strategic flexibility and readiness for change, which can be limited in the family business due to legacy systems and generational control. Likewise, Liao et al. (2017) focus on innovation that might not fit the practical, cautious approach typical of the family business in developing countries. Gong and Ribiere (2021) highlight leadership and learning, factors strongly influenced by family hierarchy and founder-driven management. Digitalization intersects within the family business with unique characteristics such as long-term orientation, generational succession and preservation of socioemotional wealth.

To explore technology acceptance in the family business, scholars have used models such as the Diffusion of Innovation theory (DOI) (Rogers, Singhal, & Quinlan, 2014) and the Unified Theory of Acceptance and Use of Technology (UTAUT) (Venkatesh, 2022). These models require adaptation to capture the family logic behind strategy decision-making. Scholars propose that digital transformation in the family business is gradual and shaped by legacy preservation, risk aversion and intergenerational dynamics, suggesting that digitalization is not merely a technological process but a sociocultural one (Soluk & Kammerlander, 2021). This study defines digitalization as a strategic process through which the family business integrates digital technology to improve operational continuity while navigating its unique socioemotional wealth.

Recent studies have begun to advance this family-specific lens. Digital adoption in the family business is often guided by family-based routines, where trust, legacy and continuity outweigh efficiency-maximization logic (Kessler, Frank, & Fuetsch, 2025). Similarly, Japanese family business revealed the coexistence of conservatism and innovation (Ohashi, Saijo, Suzuki, & Arafuka, 2024). It challenges the assumption of linear digital adoption and points to the need for more adaptive, context-sensitive models.

This study used a qualitative case study to explore digital adoption in 13 Indonesian family businesses. This method allows researchers to understand complex phenomena by considering the surrounding context (Baxter & Jack, 2008; Yin, 2009). Following Yin (2009), this study takes samples from family businesses to ensure there are representatives for literal and theoretical replication logic.

This study adopted a multiple-case approach, selecting family businesses operating in diverse industries in Indonesia, such as oil and gas, retail, manufacturing, education and logistics. Participants were selected through purposive sampling based on their experience in digital adoption (C. Baker, Wuest, & Stern, 1992). Selection criteria for participants included successful integration of digital technologies, willingness to participate and availability of key informants knowledgeable about digital adoption processes. This study interviewed 13 family business representatives holding executive positions to capture diverse strategic perspectives. They represent varying levels of digital maturity, ranging from enterprises in the early stages of adoption to those with well-integrated digital processes. This variation ensures the study captures a broad spectrum of experiences and strategic considerations. The businesses also varied in size, ranging from SMEs with a local market reach to large, multigenerational family conglomerates operating internationally. Moreover, factors such as competitive intensity, management style, resource availability and industry-specific dynamics have a significant influence on the digitalization process. The complexities and nuances inherent in the family business intersect differently with these factors. This diversity enhances the robustness of the findings by reflecting different strategic rationales for digital adoption. We present the variety of cases and their characteristics below, and provide further details in Table 1. It highlights key characteristics, including respondent profiles, industry sectors, founding years, generational leadership, number of employees and digital adoption maturity levels.

Data collection involved semi-structured interviews, supplemented with secondary data. This study conducted semi-structured interviews to explore participants’ preparation for digitalization, using open-ended questions to gauge their understanding of digital technologies, perceptions, digitalization initiatives, challenges and actions by customers and competitors towards digitalization. This study developed a guide to ensure consistency across interviews while allowing flexibility for in-depth explorations. We compiled the guide in Table 2. It outlines the guiding questions used in this study to explore various aspects of digital adoption within family businesses. Each interview lasted approximately 60 min, conducted either offline or online, depending on the comfort level of the key representatives from each family business. Responses were transcribed and thematically analysed to extract key insights. This study triangulated the findings to ensure reliability by using multiple data sources, including interviews, company reports and publicly available information.

This study applied thematic coding and cross-case analysis to identify key drivers of digital adoption. Thematic coding identifies patterns in data through transcription, coding, theme development, and conceptualization, concluding in a conceptual model (Naeem, Ozuem, Howell, & Ranfagni, 2023). The analysis begins with transcribing verbatim and cross-verifying the accuracy against recordings. The initial stage involved open coding, where key themes emerged inductively from the data. Next, axial coding was used to establish relationships between emerging themes, ensuring the coherence of the findings. This study used NVivo software to systematically organize and analyse the qualitative data, enabling a more structured coding process. Through an iterative process, the codes were refined and consolidated into overarching categories that represent the key drivers of digital adoption. This process enabled the identification of patterns across multiple cases, thereby ensuring the robustness of the thematic structure.

This study conducted a cross-case analysis to compare insights among the cases, examining similarities and divergences in digital adoption rationales. It identifies practice implications for digital adoption, benefiting from the dialogue between family business participants (Michael & Carnochan, 2020). This study achieved thematic saturation when no new insights emerged from additional data. Eventually, the final thematic framework was derived.

The details of 13 family businesses are summarized in Table 3. It showcases how different family businesses prioritize various aspects of digital adoption.

Through cross-case analysis, this study presents the verbatim data in Supplementary Material Tables 1–13 and identifies nine key rationales for digital adoption. It reveals that various rationales drive digital adoption in the family business. For instance, agility is the rationale for PRI-1, which emphasized the suitability of TikTok for engaging younger audiences, highlighting the platform’s dynamic and interactive nature. The key drivers are agility, collaboration, competitiveness, cost efficiency, increased productivity, innovation, sales orientation, saving time and streamlined operations. The cases imply that not all rationalizations apply to a family business. Participants suggest that the family business has an idiosyncratic pattern in terms of intensity that rationalizes digital adoption. Agility is more favourable for the family business than other rationales. It is further reinforced by the COVID-19 pandemic, which has compelled enterprises to be resilient (Kraus et al., 2020; Soluk, Kammerlander, & De Massis, 2021).

Overall, digital adoption is a result of joint effects from these rationalizations, with varying weightage. In the ensuing sections, this provides an in-depth analysis of the factors motivating digital adoption, as depicted in the conceptual model outlined in Figure 1. It presents key factors influencing digital adoption in the family business. For more details, Figure 2 compares the case study results. It emphasizes the breakdown of digital adoption rationales among cases.

Figure 3 illustrates how the family business can implement digitalization. It highlights the structured approach to digital transformation in the family business.

The findings challenge existing assumptions by demonstrating that digital adoption in family businesses is not merely a response to external technological advancements but is deeply intertwined with the unique characteristics of these companies. Unlike prior research highlighting resistance to digital transformation due to generational inertia and socio-emotional wealth preservation, this study reveals that family businesses exhibit strategic and pragmatic approaches to digital adoption. These approaches are influenced by agility, collaboration, competitiveness and cost efficiency, rather than being driven solely by necessity.

The economic and institutional contexts of developing countries also shape digital adoption in family businesses. Enterprises in emerging markets adopt digital technologies reactively in response to external pressures such as regulatory shifts, competitive dynamics and market demands. Limited financial and human capital resources further influence the pace and scope of digital adoption, demanding strategic prioritization among owners. Aligning with these findings, companies in developing markets prioritize digital adoption for operational efficiency, enhanced customer engagement and survival in increasingly competitive environments. It highlights the critical role of contextual factors, which include government incentives, infrastructure readiness and access to digital literacy programs. The sociocultural aspects of family businesses in developing economies influence their approach to digital adoption. Strong intergenerational leadership structures, risk aversion and a preference for traditional business models often slow digital adoption.

Digital technologies enhance responsiveness to market changes and disruptions. Agility empowers the family business to swiftly adapt its strategies, processes and product offerings in response to the ever-evolving market dynamics (Overby, Bharadwaj, & Sambamurthy, 2006). It enables the family business to capitalize on emerging opportunities, stay ahead amid competitive pressures, and ultimately achieve long-term success. Six case family businesses are valued for their agility. In the face of constant shifts and challenges, the ability to adapt and respond quickly has become a critical factor in a company’s survival and success (Marjański & Sułkowski, 2021; Soluk et al., 2021). It is consistent with what was conveyed by one of the participants.

CON-2: Following the pandemic, there has been a significant increase in online activities. Integrating digital solutions has become essential with the continuous expansion of digital platforms. For example, our online store has experienced substantial growth, making it impractical for customers to rely solely on printed materials or manually browse through physical shelves. Additionally, our storage capacity has expanded considerably. Without adequate digital support, we risk missing valuable opportunities for timing, market reach and service quality, which are crucial for sustaining competitiveness in the evolving digital landscape.

Digital platforms facilitate better internal and external communication. It enables real-time information sharing, facilitating virtual meetings and project management platforms, and enhancing accessibility for teams that are geographically dispersed. As a result, it fosters a more collaborative work culture, improves transparency and ultimately streamlines decision-making processes. It could also address resource constraints (Feranita et al., 2017). One case appreciated the adoption of digitalization for collaboration. The Covid pandemic played a decisive role as a catalyst for the surge in digital adoption, particularly in collaboration. With physical distancing measures becoming the norm, organizations worldwide have rapidly pivoted towards digital platforms to maintain communication and teamwork. This shift has witnessed a significant rise in the use of video conferencing tools, such as Zoom and Microsoft Teams. EDU-1 used these tools, which became vital for facilitating virtual meetings, brainstorming sessions and project management, effectively replicating many aspects of in-person collaboration in a remote setting.

Digitalization fosters customer trust and value differentiation. A competitive landscape drives businesses to continually improve, resulting in offerings that better meet customer needs and expectations. It fosters trust as customers recognize the company’s commitment to providing value (Intihar & Pollack, 2012). Consequently, businesses become more value-oriented, ensuring they remain competitive and retain customer loyalty. In three cases, family businesses are valued for their competitiveness. They view competitiveness as essential to maintaining a leading position within the industry and continuing to provide value to their customers in a landscape where competitors are constantly innovating.

Digital adoption reduces operational and logistical costs. It can potentially streamline operations and automate specific tasks, potentially leading to a reduction in workforce size. However, it is crucial to consider existing employees’ reskilling and upskilling needs carefully to ensure a smooth transition and potentially unlock new opportunities within the family business (Zapata-Cantu et al., 2023). This approach can reduce costs while maintaining a skilled workforce prepared for the digital future. Three family businesses have improved cost efficiency through digital adoption. The family business uses digital technologies to save various costs. Firms with a high demand for effectiveness will deliberate on automation or other processes related to digitalization (Lee, Falahat, & Sia, 2021). It is consistent with what was conveyed by one of the participants.

OIL-2: If a physical format is required and in-house office space is unavailable, renting external facilities would necessitate additional financial expenditures.

Digital adoption streamlines workflows, increasing output. Consequently, productivity increases could enhance business opportunities (Corrado & van Ark, 2016). Six cases have improved productivity through digital adoption. The utilisation of digital technologies could accelerate the speed of production (Lee et al., 2021). It is consistent with what was conveyed by one of the participants.

PRI-2: The need for manual control has been significantly reduced, as smartphones enable continuous monitoring without requiring additional personnel to expedite processes such as attendance tracking. Although the current attendance system remains outdated, its implementation has notably enhanced efficiency. Moreover, the immediate availability of data minimizes the risk of mismanagement, which was previously a challenge when using a manual stock system that required frequent re-entry of information.

Digital technologies enable companies to develop novel products and services. The family business has unprecedented opportunities to expand offerings and improve innovation performance (Feranita et al., 2017). The digital revolution fosters the formation of novel products and services that cater to evolving customer needs and expectations in increasingly competitive markets (Dionisio, Inacio, Morini, & Carvalho, 2023). In two cases, family businesses have adopted digitalization in their innovation. Digital technologies enhance the product’s competitive advantages (Falahat, Ramayah, Soto-Acosta, & Lee, 2020; Lee & Falahat, 2019). However, not all family businesses are interested in producing new and disruptive products (Pinho, Martins, & Soares, 2018). Generally, all family businesses are market-oriented. The participants only consider innovation when they are assured of the marketability of the consequence.

EDU-1: Companies frequently seek strategies to accelerate business growth. Regardless of industry, the pace of business expansion in the digital era is significantly enhanced by integrating digital technologies. As the demand for comprehensive information rises, clients increasingly expect access to extensive data and services, which can be effectively facilitated through digital solutions.

Online platforms expand market reach and improve customer interactions. Understanding customer needs and building relationships ultimately drive higher sales volume and revenue (Gregory, Ngo, & Karavdic, 2019). Five cases valued for sales activities. The family business that invested in e-commerce has strong confidence in its pool of online buyers. Factors such as cultural fit and demonstrably reliable order fulfillment processes can significantly impact how much customers trust a business (Chung, 2019). Some family businesses would not consider e-commerce due to the nature of the business (Gregory et al., 2019). These types of family businesses operate in an environment where online traffic potential is low. For example, CON-1 targets bulk orders from customers, and the possibility of a transaction through the online platform is almost impossible. In another scenario, PRI-1 and PRI-2 shared that they cannot perform well on sales digitalization due to their product uniqueness being difficult to demonstrate via online sales platforms. They prefer selling through physical demonstration.

Digital technologies reduce redundant manual tasks, improving efficiency. Time-saving could improve mindfulness in the family business (Dayan, Ng, & Ndubisi, 2019). In two cases, family businesses have improved their time through digital adoption. Firms with a high demand for efficiency will consider automation or other processes related to digitalization (Lee et al., 2021). This study’s observations suggest that enterprises within a thriving industry, facing growing demand, producing goods that can easily scale, and operating at nearly full capacity, are more inclined to understand the imperative of adopting digitalization to optimize time utilization (Loong Lee & Chong, 2019). As with other justifications for digital adoption, saving time is not a universally applicable solution. Specific business processes are highly customized and intricate, making them resistant to automation. Conversely, the family business may hesitate to invest in digitalizing processes if their product demand is low, particularly during an industry downturn with limited resources. Moreover, the incumbent generation of the family business is less likely to chase a high-risk strategy, such as investing in digitalization (Ano & Bent, 2021). It highlights the need for a nuanced approach to digital adoption, considering not just time savings but also the specific characteristics of the family business and its operating environment.

Digital technologies optimize inventory management and logistics. It ensures everyone has access to the same information in real-time, eliminating communication barriers and information silos that can hinder productivity and decision-making, which also optimizes process value (Laghouag, Zafrah, Qureshi, & Sahli, 2024). In four cases, family businesses were valued for their ability to streamline operations. This study found that streamlined operations are crucial for family businesses with multiple products or branches. For example, CON-2 is managing the logistics for a single line of lipstick with 20 different shades, and that is just one product out of thousands it offers to the network of nearly 38,000 stores. In other scenarios, EDU-2 has nearly 80 districts in Indonesia, which presents a unique challenge. The sheer number of branded locations necessitates a strong digital solution to streamline operations and maintain effective control across the entire network.

However, this study also acknowledges several constraints that may hinder adoption in the family business. Resource and intergenerational constraints are deeply rooted in the unique characteristics of the family business (Tirdasari, Wawan, & Nurlaela Arief, 2025). Resource constraints, like evolving needs, financial limitations and restricted access to external capital, may hinder digital adoption, particularly for smaller enterprises. The high initial costs of digital infrastructure, implementation and employee training often serve as significant hurdles (Taiminen & Karjaluoto, 2015). Some studies suggest that the family business may manage financial constraints more effectively than a non-family business (Sági, Chandler, & Lentner, 2020), while others highlight that reliance solely on internal funds may result in flawed performance compared to enterprises that utilize external financing options (Welsh, Kaciak, Trimi, & Mainardes, 2018). Furthermore, reliance on senior family members or long-serving employees with tacit knowledge of legacy systems creates bottlenecks, especially when knowledge transfer mechanisms are weak or informal. Family business paternalism further impedes digital adoption (Soluk & Kammerlander, 2021).

This study identifies digital adoption drivers in Indonesian family businesses: agility, collaboration, competitiveness, cost efficiency, productivity, innovation, sales orientation, time-saving and operational streamlining. These drivers illustrate how digital adoption is a strategic and adaptive response to evolving market, organizational and technological dynamics.

Comparative insights across global regions further reveal the context-dependence of digital adoption. Moreover, a comparative analysis reveals distinctions across regions. The family business in North America and Europe prioritizes innovation-driven digital adoption, which is mainly innovation-driven and supported by institutional infrastructure, skilled labour and data analytics, often leveraging big data analytics to enhance decision-making processes (Côrte-Real, Oliveira, & Ruivo, 2017; Rodríguez, Gaitán-Angulo, Gómez-Caicedo, Robayo-Acuña, & Ruíz-Castro, 2025). The family businesses in these regions tend to implement digital technology proactively, using advanced technology to drive strategic transformation and long-term competitiveness.

In China, the digitalization landscape is shaped by national priorities and large-scale state-led modernization plans. Digital adoption is most effective when configured through an integrated strategy aligned with broader innovation and sustainability goals (Cheng, Zhang, Dai, & Yang, 2024). Despite considerable investment, adoption remains uneven in agriculture, particularly among smallholder farmers. Key factors include technological readiness, government subsidies, digital literacy and institutional trust (Cui & Wang, 2023).

The prevalence of government incentives and business incubators further accelerates the integration of technology. Unlike Western regions, digital adoption in Southeast Asia, including Indonesia, tends to be more reactive, often driven by external pressures such as market disruptions or crisis events. The focus is typically on maintaining operational continuity, improving cost efficiency and addressing immediate needs. Limited institutional support, digital infrastructure gaps and resistance rooted in traditional governance structures remain key barriers. Compared to China or Western economies, the adoption tends to be incremental rather than transformational.

A family business that adopts digital technologies reactively in response to external pressures. The emphasis is more on operational continuity and cost efficiency rather than radical innovation. Similarly, the family business in Africa and Latin America faces structural challenges (i.e. weak digital infrastructure, limited financing and fragmented policies) that constrain widespread digital adoption. However, pragmatic innovations like mobile commerce and fintech platforms are emerging as practical enablers for reaching underserved markets. Studies suggest that while these regions face systemic constraints, targeted interventions and localized innovation can significantly increase adoption among family businesses that face infrastructural barriers and financial constraints, leading to slower adoption. However, mobile commerce and fintech solutions are increasingly bridging the gap, enabling enterprises to reach broader markets despite resource limitations (Canale et al., 2024; Iwu et al., 2024; Lasio et al., 2024; Zapata-Cantu et al., 2023).

These findings suggest that digital adoption is embedded in distinct institutional, economic, and cultural contexts. Context-dependent and influenced by factors such as institutional support and economic maturity. By situating Indonesia within this global context, this study offers a more comprehensive understanding of digital adoption patterns in family businesses. Culturally, values such as tradition, hierarchy, and intergenerational continuity can foster or hinder adoption (Leal-Rodríguez, Sanchís-Pedregosa, Moreno-Moreno, & Leal-Millán, 2023). The family business in East Asia often operates under strong hierarchical norms, where seniors retain decision-making authority, which can potentially slow down the adoption process. In contrast, Western family business emphasizes individualism and innovation, encouraging younger generations to lead digital initiatives.

Technologically, disparities in digital infrastructure, ecosystem maturity and access to advanced tools significantly influence adoption levels. Developed economies benefit from robust infrastructure, widespread broadband access and advanced analytics capabilities, enabling proactive, innovation-oriented digitalization (Sarangi, Pradhan, & Misra, 2023). Meanwhile, enterprises in emerging economies, such as those in Southeast Asia, Africa and Latin America, face infrastructure gaps and limited interoperability, which constrain scalability and encourage more incremental and reactive adoption strategies.

Institutionally, government policy, regulatory frameworks and financial incentives are critical. Strong state support and top-down innovation policies accelerate adoption in China, especially in strategic sectors. In Europe and North America, institutional support often comes through innovation grants, incubators, and legal protections that encourage experimentation. Conversely, fragmented policies, bureaucratic hurdles and limited access to credit restrict digitalization in many Latin American and African contexts. However, informal support networks and donor-backed programs have begun to play compensatory roles (Castel‐Branco, 2021).

The findings align with established theories of technology adoption, such as the Diffusion of Innovation (DOI) and the Unified Theory of Acceptance and Use of Technology (UTAUT). The DOI theory posits that technological adoption follows a process influenced by innovation attributes such as relative advantage, compatibility, complexity, trialability and observability (Rogers et al., 2014). The findings align with this framework, as several of the rationales identified, such as agility, cost efficiency and innovation, reflect key attributes outlined in the DOI. For example, agility demonstrates the perceived relative advantage of digital adoption in responding to market shifts. Likewise, companies emphasizing cost efficiency perceive digitalization as compatible with their long-term financial strategies.

Nevertheless, this study also reveals deviations from DOI. While the theory assumes a linear and often individual-based adoption process, family businesses exhibit a collective and socio-emotional adoption pattern, where generational leadership and legacy preservation significantly influence decisions. Thus, the family business may experience delayed adoption due to concerns over risk to their socio-emotional wealth.

Similarly, the UTAUT model identifies four core determinants of technology adoption: performance expectancy, effort expectancy, social influence and facilitating conditions (Venkatesh, 2022). The findings align with this framework. Productivity and competitiveness drivers reflect a strong belief that digitalization enhances business performance. The family business, hesitant to adopt digital technologies, often cites concerns about complexity and required expertise, reinforcing the importance of effort expectancy. The interviews with participants reveal that intergenerational leadership and competitor strategies often influence digital adoption, aligning with UTAUT’s emphasis on social influence. The role of external support (e.g. government digitalization initiatives) highlights the importance of enabling conditions in driving adoption. However, unlike UTAUT’s assumption of individual technology users, the family business operates within a multi-stakeholder decision-making process, where owners, successors, family and non-family employees contribute to decisions. It necessitates a more nuanced adaptation of UTAUT to reflect collective digital adoption behaviours.

To deepen theoretical engagement, this study also draws on socioemotional wealth theory, which emphasizes that the family business is not purely an economic entity but is also guided by emotional attachment, reputation and continuity across generations. The hesitance to adopt disruptive digital technology can be explained by a desire to avoid perceived risks to family control and identity. At the same time, the involvement of younger generations, who often champion innovation, aligns with stewardship theory, where family members act as stewards of the firm’s long-term survival, rather than short-term gain.

These insights suggest that digital adoption in the family business follows a hybrid logic. While some motivations align with the DOI and UTAUT models, others are deeply embedded in the socioemotional and governance characteristics unique to family businesses.

This study identified nine key rationales that influence digital adoption in family businesses, thereby contributing to both theoretical and practical understanding. Agility and productivity gains are the most widely applicable rationales for digital adoption. Enterprises with high product complexity may need to adopt hybrid digital and physical sales strategies. As companies grow, efficiency-driven digitalization becomes a priority. Competitiveness and innovation become critical when maintaining industry leadership.

This study has certain limitations that need to be acknowledged. Firstly, the study employs a qualitative approach, which limits the generalizability of the findings. Future research should employ quantitative methods, such as surveys and statistical modelling, to validate the identified rationales across a broader sample. Structural equation modelling and regression analysis could help establish causal relationships between drivers and business performance outcomes. Additionally, using a mixed-methods approach could further enhance the robustness and generalizability of the findings.

Secondly, this study is geographically limited to Indonesia, where socio-economic conditions, regulatory environments, and cultural factors uniquely shape digital adoption. Indonesia’s collectivist culture, characterized by strong family ties and hierarchical decision-making processes, may influence how the family business perceives and implements digitalization. In societies where traditional values strongly shape business operations, digital adoption might be slower due to resistance from senior family members who prefer conventional business practices. Additionally, the varying levels of digital infrastructure and internet penetration across Indonesia’s regions create disparities in digitalization readiness. The shape factors in emerging economies differ significantly from those in developed markets, which may influence the applicability of our findings.

The family business in developed economies often benefits from more advanced digital infrastructure, well-established legal frameworks, and greater access to financial and human capital resources. These factors may alter the motivations for digital adoption compared to the findings presented here. Future research could conduct comparative studies to answer the question:

Additionally, it should test the hypothesis that the relative importance of digital adoption rationales differs significantly across regions due to variations in market structures and technological infrastructure.

This study primarily adopts a cross-sectional perspective, providing a snapshot of digital adoption at a given point in time. Future research should consider the following question:

Test the hypothesis: The family business that adopts digital technologies early experiences sustained competitive advantages and higher market adaptability. Future studies could also investigate the interplay between digital adoption and the preservation of socio-emotional wealth within family businesses. Investigating how family-centred values impact technology adoption decisions could yield further insights into the unique challenges faced by these firms.

Finally, the self-reported interviews introduce the potential for bias. Participants may have provided responses that align with socially desirable narratives or emphasized their successes without mentioning their failures. This self-reporting bias can lead to overestimating the effectiveness and drivers of digitalization. Future research could consider triangulating these qualitative findings with quantitative surveys or external validation through secondary data sources to validate and enrich the findings. Incorporating perspectives from multiple stakeholders and employing anonymous data collection methods may also help mitigate the influence of social desirability bias, providing a more balanced view of digital adoption processes.

This study provides valuable insights for industry professionals by highlighting strategic rationales that can guide. The identified rationales can serve as key strategic focal points for enhancing digitalization efforts across various industries and sectors.

In the retail industry, enterprises can use digital technology to enhance customer engagement through personalized marketing, optimize supply chain management and improve point-of-sale systems. In manufacturing, digital technology (i.e. automation, IoT, real-time data analytics) can significantly improve production efficiency, streamline supply chain operations, enhance quality control and reduce operational costs. In the logistics industry, digital technology can support fleet management optimization, real-time route planning and accurate inventory tracking, ultimately improving delivery reliability and cost-effectiveness. In the education sector, the institutions can adopt digital learning platforms to support remote and hybrid learning models, use a learning management system (LMS) for curriculum delivery and implement digital tools for student engagement and performance tracking.

Beyond sector-specific implications, this study proposes an approach for family business leaders to adopt digital transformation effectively, addressing common challenges. The first step is to assess digital readiness by conducting an internal evaluation to identify existing capabilities and gaps. It should involve both family and non-family employees. Once the readiness level is established, companies should develop a clear digital strategy that aligns with long-term growth objectives. It includes setting defined transformation goals and identifying key digital technologies that best support operational efficiency. One of the biggest challenges in the family business is resistance to change. Addressing this issue requires effective communication about the benefits of digitalization. At the same time, companies should optimize resource allocation by leveraging available support from external parties while ensuring that digital investments offer a strong return. Companies need to enhance their digital skills by providing continuous employee training and seeking partnerships with educational institutions to upskill staff. Companies are recommended to pilot digital solutions on a small scale, gather feedback, and refine them before implementing them on a full scale. Finally, digitalization is an ongoing process that requires regular monitoring and improvement of strategies.

Ultimately, this study recommends that governments and industry stakeholders prioritize reducing digital adoption barriers by enhancing infrastructure, offering targeted financial incentives, and implementing skill development initiatives. Encouraging collaborative ecosystems where the family business can share best practices may also enhance the success rate of digital adoption.

Nyayu Lathifah Tirdasari: Conceptualization (Lead), Data curation (Lead), Formal analysis (Lead), Funding acquisition (Lead), Investigation (Lead), Methodology (Lead), Project administration (Lead), Visualization (Lead), Writing – original draft (Lead), Writing – review & editing (Lead). Wawan Dhewanto: Conceptualization (Equal), Methodology (Equal), Resources (Equal), Supervision (Equal), Writing – review & editing (Equal). Neneng Nurlaela Arief: Conceptualization (Equal), Methodology (Equal), Resources (Equal), Supervision (Equal), Writing – review & editing (Equal).

The supplementary material for this article can be found online.