Coordinating Political and Operational Authority in Village-Owned Enterprises: An Abductive Multiple-Case Study of Dual-Authority Governance in Indonesia

Abstract

Purpose: This study examines how political and operational authority are coordinated in Village-Owned Enterprises (BUMDes) in Indonesia, and under what motivational and accountability conditions these governance configurations are associated with organizational capability development.
Design/methodology/approach: An abductive multiple-case study design was employed. Data were collected from 13 BUMDes in Pulang Pisau Regency, Central Kalimantan, through 45 semi-structured interviews, four focus group discussions, and systematic document analysis. Three-stage coding (open, axial, selective) combined with cross-case comparison was used to develop a configurational explanation grounded in empirical patterns across nine active and four less-active BUMDes.
Findings: The analysis reveals three observable governance behavior clusters: village head governance behaviors, director operational leadership behaviors, and dyadic coordination mechanisms. Accountability and transparency practices emerged as a cross-cutting condition.
Mission orientation: An internalized commitment to community welfare — functions as a motivational condition that sustains governance coordination under resource constraints and adverse conditions. Active BUMDes exhibited stronger dual-authority coordination and more developed capabilities across four domains: human resource, innovation, partnership, and managerial capabilities.
Research implications: This study extends dual-authority governance theory by proposing a configurational explanation of how political and operational functions are coordinated in hybrid village enterprises. It challenges the assumption that conventional, individual-leader models are universally applicable in community-embedded, resource-constrained organizational contexts.
Practical implications: Findings highlight the importance of governance formalization (joint planning mechanisms, structured role differentiation), mission-aligned leadership selection, and accountability system development for strengthening BUMDes performance. Originality/value: This study offers a governance-configuration explanation—grounded in empirical evidence from 13 BUMDes—of how dual-authority coordination under mission-oriented conditions is associated with organizational capability development in Indonesian rural social enterprises.