Purpose Implementing automatic sorting operations in the parcel delivery industry can dramatically improve both capacity and service quality but demands radical and complex organizational change. The present in-depth grounded theory study examined a change process of this kind within one of the few global companies in the parcel delivery sector, focusing on three European hubs where automatic sorting had recently been introduced. Design/methodology/approach Grounded theory methodology, which facilitates the gradual emergence and dialogical interpretation of empirically grounded theoretical concepts, was particularly suited to the current project's open-ended research design and the hybrid (prescriptive but also constructive) nature of the change process under study. The investigation comprised iterative cycles of data collection, open coding, selective coding and theoretical coding over a three-year period. Findings In keeping with the dual nature of the change underway, a set of tensions were identified between pairs of opposite poles: manual vs automated, planned vs emergent and corporate vs site. The management of these tensions, which leveraged both prescriptive and sensemaking approaches, was found to trigger knowledge production, facilitating a gradual transition from high to low uncertainty and, consequently, progressive movement along the continuum between each pair of competing poles. Within this process, the industrial engineering function acted as an agent of change with a key orchestrating role. Originality/value As one of the first in-depth grounded theory analyses of tension management, this study contributes to the relatively recent debate on the recognition, analysis and handling of tensions and paradoxes in organizational change, suggesting innovative criteria for successful change management and identifying promising new avenues for research. From a managerial perspective, the study outcomes suggest that explicit recognition of uncertainty and tensions in organizational change can pave the way for solutions based on agility and continuous organizational learning.