The vicious circle of ambiguity: how governance deters digital transformation in municipal conglomerates

IMPACTPublic sector organizations struggle with digital transformation to ensure future relevance and efficiency. While the corporatization of public sector organizations offers certain opportunities for digital transformation, it also introduces challenges. In this article, the authors highlight how the existing governance of municipal conglomerates deters digital transformation. By tracing governance-related deterrents, the authors show the presence of a ‘vicious circle’ where governance mechanisms enforce each other, resulting in sub-par digital transformation and detrimental performance over time. The authors explain that, by understanding the vicious circle, policy-makers and managers in municipality conglomerates can improve existing governance to facilitate digital transformation.