Organizational Readiness for Change and Design using Galbraith's STAR Model: A Case Study of Digitalization at a Small and Medium Enterprise (SME)

Abstract : This study investigates the organizational readiness for digitalization within a Small and Medium Enterprise (SME) in the Indonesian apparel sector, specifically CV XYZ, which faces sales stagnation due to its reliance on traditional offline channels. Utilizing a qualitative methodology, the research employs in-depth interviews and Focus Group Discussions (FGDs) with key stakeholders to assess readiness and identify necessary organizational design interventions. The theoretical analysis is grounded in Weiner’s theory of organizational readiness and Galbraith’s Star Model. The findings reveal a critical dichotomy in the firm’s readiness: while the organization exhibits high change valence—driven by a strategic recognition of e-commerce as essential for market expansion—it suffers from low change efficacy due to significant gaps in technical competencies and digital literacy. The application of Galbraith’s Star Model highlights specific misalignments, particularly in structure and leadership, which currently hinder digital agility. The study concludes that to successfully implement digitalization, the organization must move beyond mere asset acquisition to focus on capability building. Strategic recommendations include the implementation of “structural differentiation” to create a distinct online marketing division, the appointment of a specialized digital manager to bridge the leadership gap, and a prioritized investment in tiered human capital training over immediate financial incentives. These insights provide a practical framework for SMEs transitioning from traditional operations to digitally enabled business models.