The Principal-Agent Theoretical Ramifications on Digital Transformation of Ports in Emerging Economies

Abstract

Background: Scholarly literature indicates a slow pace at which maritime ports fully embrace digital transformation (DT). The reasons to this are largely anecdotal and lack solid empirical grounding. This inhibits an overall understanding of DT’s tenets and the development of evidence-based policies and targeted actions. Methods: This study deployed a qualitative case study strategy to unpack the challenges of undertaking DT through the lens of principal-agent theory (PAT). Results: Analysis of data collected through 13 semi-structured interviews from a port’s value chain stakeholders revealed five thematic challenges that contradict successful implementation of DT. These included interagency constraints and system ownership tussles; system sabotage and prevalent corruption; prevalent human agency in port operations; cultural constraints; and political influence on port governance. Conclusions: To address these challenges, the study proposes a four-stage empirically grounded DT strategy framework that guides both practitioners and policymakers through DT endeavors. The framework includes: (1) the port’s value chain mapping, (2) stakeholder engagement, (3) resource mobilization, and (4) effective monitoring. For scholars, we provide an avenue for testing statistical significance of association and causality among the identified challenges.