This study investigates the interplay between digital transformation and institutional voids within the framework of panarchy theory, which delineates adaptive cycles through exploitation, conservation, release, and reorganization. By exploring how firms navigate institutional challenges such as regulatory ambiguities and labor shortages, the research highlights digital transformation as both a solution and a potential intensifier of these voids. Using qualitative methods, including expert panels and interviews across industries, the study identifies the dynamic phases of digital maturity and proposes that institutional voids act as moderators of digital transformation progress. Findings reveal that firms' strategic responses and digital maturity significantly influence their ability to adapt within their institutional contexts. Retail and financial sectors exhibit higher digital engagement, while energy and transport lag, often constrained by regulatory and operational barriers. This research contributes to the digital transformation literature by integrating adaptive cycles with institutional voids, offering a nuanced framework for assessing digital maturity and resilience in firms. The study underscores the need for systemic approaches to digital innovation, balancing short-term adaptation with long-term alignment to institutional realities.
