The Digital Transformation Dilemma: Institutional Barriers to Scaling Agile in Public and Corporate Sectors
Yana V. Savchenko, Cand. Sc. (Econ.), Associate Prof. of Corporate Economics and Business Management Dept. Ural State University of Economics
Liudmila A. Ramenskaya, Cand. Sc. (Econ.), Associate Prof. of Corporate Economics and Business Management Dept. Ural State University of Economics
Abstract
Digital transformation of public and corporate sectors implies the adoption of Agile methodologies to enhance adaptability and customer centricity. However, scaling Agile in large organizations and government agencies frequently fails to meet anticipated outcomes; while bureaucratic overhead escalates, innovation activity declines and institutional conflicts emerge. This study aims to identify recurrent patterns of institutional failure in Agile scaling and to construct a conceptual model of the strategic dilemma arising from regulatory constraints and bureaucratic culture. The methodology is based on multiple case studies of six publicly documented cases from the financial, IT, manufacturing, and public sectors. Crosscase analysis has revealed three patterns: imitation of transformation while preserving the bureaucratic core, conflict between team autonomy and centralized control, and the cultural immunity of the bureaucratic environment. The study has identified three interrelated mechanisms: the coordination costs escalation, the hollowing out of values (institutional rigidity), and contextual rejection. These mechanisms produce a cumulative lock-in effect that undermines the strategic potential of Agile. The scientific novelty lies in the transition from an isolated enumeration of success factors to a model of cumulative interaction among institutional barriers, which is demonstrated through a comparative analysis of international and Russian cases. The practical significance consists in diagnostic questions designed to help organizations identify risks arising from the strategic dilemma and transition towards informed hybrid project management models.
Keywords: scaling agile; institutional barriers; public administration; corporate sector; hybrid methodologies; strategic management; digital transformation.
For citation: Savchenko Ya. V., Ramenskaya L. A. The Strategic The Digital Transformation Dilemma: Institutional Barriers to Scaling Agile in Public and Corporate Sectors. Digital Models and Solutions. 2026. Vol. 5, no. 3, pp. 80–93. DOI: 10.29141/2949-477X-2026-5-3-6. EDN: SBKHDH.
