Digital transformation as a multi-phase process: a longitudinal study of corporate strategy and business unit adaptation

• The study discovers five interrelated patterns that shape digital transformation. • Digital transformation unfolds recursively rather than linearly. • Tensions arise between corporate strategy and business unit adaptation. • Monetizing digital innovation remains challenging. • Temporal tensions can hinder transformation. This study investigates how digital transformation unfolds over time within a multi-business manufacturing firm. Drawing on a longitudinal case study of SweX—a global industrial firm—we trace the dynamics of digital transformation across three empirically derived phases: experimentation, consolidation, and acceleration. Five interrelated patterns shape the process: (1) digital transformation unfolds recursively rather than linearly; (2) tensions arise between corporate strategy and business unit adaptation; (3) monetizing digital innovation remains challenging; (4) structural adjustments are needed to balance stability and change; and (5) temporal asymmetry—misalignments between technology deployment and customer readiness—can hinder digital transformation. We organize these insights around three overarching themes—organizational tension, structural adjustment, and organizational adaptation—developed through iterative analysis across corporate and business unit levels. The study advances process-oriented perspectives on strategy by showing how recursive patterns of tension, structural change, and organizational adaptation drive digital transformation in complex, multi-level firms.