The Role of Governance in Digital Transformation: An Organisational Meta-Capability Framework
TL;DR
This conceptual paper argues that the missing variable is governance, understood not as board oversight or regulatory compliance, but as an active organisational capability with design implications, and develops a framework that bridges dynamic capabilities theory with organisational design research.
Abstract
Digital transformation initiatives in large organisations fail at rates between 70% and 84% despite substantial technological investment, a pattern that points to organisational rather than technological causes. This conceptual paper argues that the missing variable is governance, understood not as board oversight or regulatory compliance, but as an active organisational capability with design implications. Drawing on dynamic capabilities’ theory (Teece, 2007), digital leadership research (Albannai et al., 2024), and recent empirical work on supply chain digitalisation (Al Mashalah et al., 2022) and board governance of digital transformation (Andersson et al., 2025), we develop a framework that positions digital transformation governance as an organisational meta-capability. This higher-order capability does not sense, seize or transform directly. Rather, it creates the organisational conditions under which these dynamic capabilities can be coordinated and strategically aligned. We articulate a three-way distinction between corporate governance, digital transformation governance, and digital transformation management, three constructs the literature frequently conflates. We then identify five governance dimensions, each derived systematically from the processual characteristics of digital transformation and from a corresponding dynamic capability: strategic alignment, decision-making architecture, strategic resource allocation, organisational reconfiguration, and organisational learning. The Romanian institutional context, where Government Emergency Ordinance 109/2011 (amended by Law 187/2023) established a corporate governance framework for public enterprises aligned with OECD principles, offers a contemporary setting in which these analytical distinctions carry direct policy weight. The contribution is twofold: a sharper conceptual vocabulary for distinguishing governance from management in digital contexts, and a framework that bridges dynamic capabilities theory with organisational design research.