The Circular Imperative: Dynamic Capabilities, Governance, and Switching from Linear to Sustainable Value Chains: The Transition in the Context of Contingencies
DOI:
https://doi.org/10.55737/trt/v-v.289Keywords:
Circular Economy, Dynamic Capabilities, Resource-Based View, Stakeholder Theory, Institutional Theory, Corporate Social Responsibility, Sustainable Supply Chain ManagementAbstract
This study has introduced an integrative framework that explains how firms transition from linear to circular value-chain through the adoption of circular economy (CE) practices as a strategic corporate social responsibility (CSR) initiative. Based on the Resource-Based View (RBV), Dynamic Capabilities View (DCV), Stakeholder Theory, and Institutional Theory, the study draws on existing literature and empirical evidence from various contexts, such as global manufacturing, food systems, and emerging markets. The role of external pressures and ownership structures in influencing firms to develop dynamic capabilities (e.g., innovation, reconfiguration of resources, integration of the environment) that can support the effective practice of CE is explored. Implementation challenges such as rebound effects in circular business models (CBMs) and governance problems are given a critical assessment. Key findings show that while technological developments, like Industry 4.0 (I4.0) and servitisation, are helpful for the adoption of CE in its early stages, advanced recycling and recovery processes need strong dynamic capabilities to make it possible.
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Copyright (c) 2026 Fatima Nawaz, Sana Sameen Sabir, Dr. Farah Yasser, Dr. Ramla Sadiq
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