This theory development paper addresses the emergence of collective perceptions of digital privacy (CPDP) in organizations, a phenomenon understudied in information systems (IS) literature. Drawing on contextual integrity framework (Nissenbaum 2004), we conceptualize CPDP as a unit-level construct rooted in individual perceptions, shaped by social dynamics and contextual factors such as virtual territories. Using multilevel theory (Kozlowski & Klein, 2000), we propose that CPDP emerges through composition (homogeneous perceptions) or compilation (heterogeneous or clustered perceptions), influenced by peer comparisons, expert reliance, and organizational disparities. Our theory addresses gaps in IS research by moving beyond individual-level analysis, incorporating the role of IT artifacts into privacy concept, and contextualizing digital privacy within organizational settings. This work offers a foundation for future empirical research on privacy behaviors, security breaches, and organizational productivity, while providing actionable insights for designing effective privacy policies and products.