Resolving Institutional Misfit in Collaborative Digital Transformation Projects: An action research approach

• This study provides a three-stage governance framework to resolve institutional misfits in collaborative digital transformation projects: identifying institutional misfit, synchronizing values and norms, and nested coupling of institutional logics. • It demonstrates that institutional misfit in digital transformation projects is caused by incompatible institutional logics among collaborators, such as corporate, academic, and market logics. • The research shows that successful digital transformation is not solely a technical issue but a project governance challenge, necessitating a process-based governance approach that addresses the divergent values and norms of all involved parties. • Using an action research methodology, this paper offers micro-level, actionable insights for transitioning non-digital firms toward a sustainable, data-centric institutional logic. Digital transformation (DT) projects frequently fail due to governance challenges in the inter-organizational coordination. The collaborators during DT project implementation not only provide complementary resources but also bring institutional conflicts that exacerbate the difficulties of digital transformation projects. To uncover and mitigate the side effects of institutional misfit, we adopt an action research approach to investigate how collaborators can perceive and resolve the challenges of diverging institutional logics in digital transformation projects. Our findings reveal a three-stage process-based governance model: (1) identification of institutional misfit, (2) synchronizing values and norms, and (3) nested coupling of institutional logics. This study contributes to organizational change and project governance literature by offering a governance roadmap for resolving institutional misfit in collaborative DT projects and provides managers with actionable guidance on securing DT project success through process-oriented governance measures.