Digital Transformation: Governance as a TransitionTool : A case study at a Swedish municipality

University essay from KTH/Industriell ekonomi och organisation (Inst.); KTH/Industriell ekonomi och organisation (Inst.)

Abstract: As society becomes increasingly digitalised, pressure is put on public organisations to keep up with technological developments. Thus, digital transformations, which is a strategic relocation of the business, have become essential for organisations. Digital transformations are associated with complexity and a high failure rate, partly due to organisational barriers and the necessity of structural changes and possessing several dynamic capabilities. Private organisations have led the way in the era of integrating technology with business, and public organisations have attempted to follow. As a result, governing inspired by private organisations have been developed for public organisations, namely new public management. However, this governing does not cover values essential for public organisations, e.g., public value, nor facilitating digital transformations. Governance that enables adaptation and responsiveness as well as creating public value is necessary, e.g., adaptive and agile governance. This thesis aims to investigate digital transformation in public organisations and the effect governing principles have on it. The study also explores the potential of adaptive governance and if digitalisation can enable municipalities to work with sustainability. To answer this, an exploratory study is conducted, which includes a case study, and a framework is constructed based on a literature review together with four in-depth interviews with scientists. The framework is then applied to the case study, consisting of 11 semi-structured interviews. The findings indicate that digital transformations of public organisations can be conducted without considering governing principles. However, governance can affect how successful the transformation is and what value creation it can bring. Using governance that does not facilitate the transformation could impact its success. Adaptive governance can solve many issues in municipal digital transformations, but may not solely be the solution. It emphasises learning and trial and-error and observes the transformation through an ecosystem perspective. However, the practical implications of it are limited as no methods exist. Thus, combinations with other governing principles may be required. Additionally, digitalisation cannot enable municipalities to achieve sustainability aims on its own. Instead, digital technologies are tools that the municipality can use to achieve sustainability. The study contributes to research by investigating the effect governing principles has on digital transformations of public organisations in a Swedish context, which previously was lacking. The framework can provide a guide and analysis tool for public organisation’s digital transformation, and shows potential to be applied in practice.

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