Digital Transformation Paradoxes: Managing Resource-Capability Tensions

2026-05-04

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Arif Perdana *

W. Eric Lee

Phoebe Gao

Bingqiao Li

DOI：10.1080/08874417.2026.2659740

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This study investigates how organizational resources and capabilities interact during digital transformation (DT) across diverse industries. We conceptualize DT as a form of organization-wide change in which digital technologies act as catalysts for reconfiguring value creation and reshaping organizational identity, in contrast to IT-enabled improvements that largely sustain existing value propositions. Drawing on qualitative analysis of 30 interviews spanning 13 industries in Singapore, we propose the REACT framework, consisting of Resources, Enabling Factors, Adaptive Capabilities, Capability Cultivation, and Transformation Outcomes. Our findings indicate that enabling factors, including leadership commitment, cultural readiness, and external shocks like COVID-19, function as triggers, shifting organizations from resource exploitation toward capability reconfiguration amid heightened uncertainty. This transition produces enduring tensions that require constant balancing of stability with change and efficiency with adaptability, demanding surge capacity to manage unpredictable disruptions.

Keywords:

Digital transformation

resource-based view

dynamic capabilities

organizational change

sectoral analysis

Digital Transformation Paradoxes: Managing Resource-Capability Tensions

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