Awake and Recombine: How Municipalities Engage in Inter-Organizational Digital Transformation

Abstract

As municipalities awaken to the demands of digital change, inter-organizational digital transformation is emerging as a means to recombine capacities and act collectively. Drawing on institutional theory, the dissertation conceptualizes such transformation not as technical modernization but as institutional reconfiguration, where norms are reinterpreted, agency redistributed, and legitimacy claims renegotiatied amid growing digital divides. Where prior research emphasized strategy, governance, or technological innovation, this work highlights the institutional, relational, and collective dimensions of transformation. It presents collective institutional entrepreneurship as the process through which public actors mobilize complementary capabilities across organizational boundaries, craft shared governance, and gradually “rewrite the institutional code” that shapes transformation. The argument is underpinned by a longitudinal case study of collaboration between Sweden’s Ånge and Sundsvall municipalities, complemented by a nationwide survey. The dissertation unpacks how inter-organizational digital transformation evolves in phases; how legitimacy, trust, and equity are constructed; and how tensions (especially between autonomy and interdependence) generate transformation in resource-asymmetric settings. Empirically, it shows how institutional entrepreneurs navigate capability gaps, governance ambiguity, and entrenched norms through shared narratives and strategic framing while managing power asymmetries and infrastructural mismatches. Theoretically, the dissertation advances a processual, collectivity-centered understanding of institutional change. It demonstrates how complementarity, equity, and legitimacy are actively constructed. Methodologically, it illustrates how phenomenon-driven, abductive inquiry grounded in interviews, documents, and reflexive fieldwork illuminates the recursive interplay between structure and agency in digital transformation. Overall, the research frames municipal digital transformation as a contested institutional journey shaped by collaboration, collective agency, and pursuit of equitable digital welfare. It offers insights for theorizing on digital transformation and informs practical awareness of how public organizations can recombine institutional capacities to build more resilient and equitable digital futures.