THE AGILITY PARADOX: WHEN OPERATIONAL AGILITY HINDERS DIGITAL TRANSFORMATION IN PORT BUREAUCRACIES

Abstract

Digital transformation has become a key priority for improving efficiency and service delivery in public-sector organizations, particularly in complex and highly regulated governance environments. This study examines how digital transformational leadership, intellectual capital, creating shared value, organizational agility, and digital strategy influence digital transformation in Indonesian port organizations operating within multi-agency regulatory systems. Using a quantitative, cross-sectional survey of 236 employees and Partial Least Squares Structural Equation Modeling (PLS-SEM), the study analyzes both direct and indirect relationships among these variables. The findings indicate that digital strategy is the strongest driver of digital transformation, while leadership and intellectual capital significantly enhance organizational agility. However, organizational agility demonstrates a negative effect on digital transformation, suggesting that increased operational flexibility may encourage informal practices that weaken the adoption and integration of formal digital systems. These results highlight a structural tension between adaptive capacity and procedural compliance in regulated public-sector contexts. The study contributes to the understanding of digital transformation by emphasizing the importance of aligning organizational responsiveness with governance frameworks to achieve effective and sustainable digital outcomes.