This study presents a unique case of a forced merger between a university of applied sciences (Fachhochschule) and a university in Germany. Based on a longitudinal case study over 20 years, we examine how the newly-merged entity initially struggled with different approaches to resolving institutional contradictions and then responded with a radical organizational transformation. We develop a model of institutional organizational transformation that complements existing ap-proaches in the literature. It captures how organizations may overcome institutional contradic-tions through a radical institutional re-set and re-build instead of reconciling their differences. Our transformational approach is a creative organizational response to institutional contradic-tions at the interstices between macro-level changes and micro-level practices with implications for higher education and institutional research.