Islands of Innovation or Systemic Transformation? The Scaling Dilemma of Generative and Agentic AI within Organizations

Generative and Agentic AI (GAAI) present organizations with both transformative opportunities and costly risks. While pilots and point solutions proliferate, many firms struggle to scale GAAI beyond experimentation, resulting in unrealized revenue potential and risks of operational, reputational, and compliance failures. This work addresses the critical management challenge of moving from fragmented initiatives to enterprise-wide capability building. Using a mixed-method empirical approach, we trace the scaling journey of successful GAAI adoption and validate a three-phase framework that captures the progression from experimentation to integration and institutionalization. By offering actionable guidelines, this paper enables practitioners to unlock value through productivity gains and revenue growth, while mitigating the risks of costly missteps. These insights provide a roadmap for realizing sustainable, enterprise-level returns from GAAI investments.