Advancing Circularity: The Dynamic Capabilities to Drive Transformative Change

The competitive environment within which organizations operate is evolving faster than ever, prompting organizations to change to keep up with the environmental changes. The dynamic capabilities (DCs) view seeks to answer how organizations attain and sustain competitive advantage in changing environments. In the past two decades, there has been a proliferation of research in the DCs domain; yet much remains to be investigated regarding the antecedents and outcomes of DCs. The term “dynamic marketing capabilities” (DMCs) refers to a subset of DCs with the emphasis on customer value. This research studies four DMCs: proactive market orientation, agility, opportunity creation, and value innovation. The development of DCs may be triggered by the necessity to reconfigure resources in dynamic environments or by managers’ decisions to change the current way of doing things in an attempt to improve performance. Therefore, environmental dynamism and dynamic managerial capabilities are antecedents of DCs. To achieve competitive advantage, organizations can employ two distinct but complementary strategies. First, they can match environmental demands by reconfiguring and renewing their organizational resource base. Second, they can create market turbulence. Therefore, these two strategies act as mediators between DMCs and organizational outcomes. A conceptual framework is developed in order to examine the relationship between DMCs, their antecedents, and outcomes. A sample of 270 usable responses was obtained from top and senior managers working in Australia. After ensuring the constructs’ reliability and validity, the hypotheses were tested by means of hierarchical regression analysis and structural equation modeling. The results indicate that environmental dynamism and dynamic managerial capabilities positively affect the studied DMCs; however, the effect of dynamic managerial capabilities is stronger. Moreover, DMCs have a positive impact on operational marketing capabilities and induced market turbulence; these in turn positively affect organizational outcomes. The multi-mediation tests confirmed that operational marketing capabilities and induced market turbulence mediate the effect of DMCs on organizational outcomes. This study contributes to and extends the knowledge of DCs by proposing an integrative conceptual framework, explaining the antecedents of DMCs and the mechanism by which DMCs are linked to organizational outcomes. The findings re-emphasize the need for DCs in dynamic environments and highlight the critical role of dynamic managerial capabilities. Another contribution is that the study incorporates the element of induced market turbulence, hitherto missing in the literature pertaining to DMCs. This study also emphasizes that operational marketing capabilities mediate the relationship between DMCs and organizational performance. Moreover, four distinct DMCs (i.e., proactive market orientation, agility, opportunity creation, and value innovation) are identified, and scales are developed and validated to measure them. The findings suggest that these DMCs perform as anticipated. This research provides several insights for managers regarding DCs and how to apply them to organizations. The results of this study demonstrate that it is necessary for organizations to invest in developing DMCs, not to achieve performance improvement directly, but to optimize their operational marketing capability configuration. This, in turn, improves organizational outcomes. Moreover, managers are encouraged to invest in the development of DCs as a strategic rather than tactical approach. Another implication is that in ambiguous environments, organizations need to not only adapt to the environment, but also to employ strategies of environment constructing.

Paper aims This study is grounded in the supply chain resilience (SCRES) capabilities literature and the dynamic capabilities theory (DCT), which is used to develop a framework of dynamic SCRES capabilities for global supply chain disruptions. Originality This study explores firms' adapting, responding, and learning capabilities in the initial outbreak of the coronavirus pandemic 2019 (COVID-19) in the Irish context. Research method The research methodology was based on semi-structured interviews with supply chain leaders of international operations, extending between Ireland and the UK. Data analysis utilises a hybrid thematic analysis approach that integrates inductive codes with deductive priori-driven constructs. Main findings Five significant impacts of COVID-19 on supply chain operations are revealed: capacity and resource constraints, supply issues, demand spikes, supply chain skills shortages, and human resource factors. Furthermore, firms' high-order SCRES capabilities during a pandemic are related to their adaptation, response, and learning capabilities. Operational capabilities and resilience practices support these high-order capabilities. However, the empirical evidence indicates that resilience practices overlap across SCRES capabilities. Implications for theory and practice The connection between SCRES and dynamic capabilities is emphasized by demonstrating that operational capabilities and resilience practices are integral building blocks of high-order SCRES capabilities. We distinguish between dynamic and operational capabilities and present an integrative framework to elaborate the theory of dynamic SCRES capabilities. Moreover, valuable insights into developing dynamic SCRES capabilities are highlighted by adapting to changes, seizing opportunities, coordinating tasks, and engaging in learning routines in response to a pandemic disruption. Firms that harness SCRES elements and practices to enhance their adaptability, response, and learning capabilities share similarities with the dynamic capabilities processes of adapting & seizing, coordinating, and learning.

In recent years, the dynamic capabilities view has attracted attention in the management literature, and theoretical papers note many research challenges. Currently, one of the most significant issues is the role of the marketing function in the development of dynamic capabilities, and some recent discussions have even introduced the new term ‘dynamic marketing capabilities’. The main area of interest is how to achieve a well‐integrated framework to serve as the starting point for empirical papers. Although the most recent research proposes a wide range of processes as possible dynamic marketing capabilities, it is difficult to find consensus among these proposals. To resolve this difficulty, this paper seeks to define the dynamic marketing capabilities construct based on accepted components in the generic dynamic capabilities view. More specifically, it defines the role of dynamic marketing capabilities through absorptive capacity and knowledge management. By identifying these components and relating them in an integrative model, the authors propose to explain how dynamic marketing capabilities work and precisely which marketing processes promote both components.

Corporate sustainable development has become an important topic for academic discussion. Sustainability is a managerial trend playing an important role in contemporary organizational strategy management. There has been little study about the ability of companies to make sustainability more dynamic and to integrate sustainability within overarching strategies, transforming sustainability into a business asset. This study examines ways to translate dynamic sustainability capabilities into corporate sustainability performance from a natural resource‐based view. The study investigates the mediating effect of resource management capabilities to connect dynamic sustainability capabilities and corporate sustainability performance. Survey data were collected from 163 corporations in China. Data were analyzed using partial least squares structural equation modeling. The results demonstrate that (a) dynamic sustainability capabilities are composed of monitoring, seizing, and reconstructing capabilities; (b) dynamic capabilities with respect to sustainability have a significant positive effect on each dimension of corporate sustainability performance; (c) resource management capabilities were found to only partially mediate the relationship between dynamic sustainability capabilities and corporate environmental and social performance; (d) economic performance exhibits no mediation. This study enriches the theory of dynamic corporate capabilities and sustainable development and provides effective management advice for companies facing sustainable development issues.

This chapter discusses the extent to which dynamic managerial capabilities determines CE and eventually firm’s performance. Such discussion enriches Adner and Helfat’s (2003) dynamic managerial capabilities and hence demonstrates a more integrative framework of dynamic managerial capabilities. One hundred and thirty-three chief executive officerss and editors-in-chief of Indonesia local newspaper publishers participated in the study on which this chapter is based. Such study finds that three elements of dynamic managerial capabilities (managerial human capital as measured by talent management practices, managerial social capital, and managerial cognition as measured by managers’ perception on task environment) positively and significantly affect corporate entrepreneurship, and it in turn positively and significantly affects firm’s performance. These findings highlight the role of dynamic managerial capabilities in creating corporate entrepreneurship. This study conceptualized the development of corporate entrepreneurship as strategic resources within a firm in the Indonesian’s local newspaper industry context. Dynamic managerial capabilities elements conceptually manifest the dynamic capabilities view into managerial action and it represents how manager responds to the environment through dynamic capabilities action. Limitations of the study are also identified in this chapter to warrant further research.

Purpose– Dynamic capabilities are regarded as the bedrock of firms that survive in a dynamic environment. Notwithstanding this perspective, little research has been implemented in understanding dynamic capabilities of family firms. The purpose of this paper is to investigate the relationship between environmental dynamism and dynamic capabilities of family businesses, and the moderating effect of trust on this relationship.Design/methodology/approach– A quantitative survey was executed with the sampling frame outlined based on the Hemscott Company Guru database. In total, 137 useful responses were employed in this study.Findings– The results suggest that environmental dynamism is an antecedent of dynamic capabilities. Furthermore, findings show the presence of trust moderates the environmental dynamism-dynamic capabilities nexus.Research limitations/implications– The cross-sectional design of the study determines that it can only proffer a snapshot of the scenario. In addition, the exclusion of non-incorporated firms in the sample because of the nature of the Hemscott database constrains the generalisability of the study. Future studies in a similar vein may be implemented through national/local development agencies to overcome this barrier.Originality/value– The unique intertwined family and business system embedded in family firms has led to the assumption that trust will influence the environmental dynamism-dynamic capabilities nexus. The current study confirms this assumption and offers a perspective that helps appreciate the environment-business relationship in family businesses.

Rapid technological advancements and global economic shifts have catalysed an era of digital transformation, confronting multinational enterprises (MNEs) with unprecedented challenges and opportunities. While only 22% of organisations achieve and sustain improved performance through digital transformations, the strategic significance of this shift is evident, with digital platforms expected to play a crucial role in market adaptation for 75% of industry leaders by 2025. This study develops a comprehensive theoretical framework that integrates dynamic capabilities, orchestration processes, and business model innovation to understand how MNEs successfully navigate digital transformation. Drawing on the systematic analysis of five manufacturing MNEs over multiple years, this research examines three critical areas: (1) how different levels of dynamic capabilities interact with ordinary capabilities in enabling digital transformation; (2) the mechanisms through which manufacturing MNEs orchestrate digital transformation through product-to-solution centric models, customer engagement, and ecosystem participation; and (3) how these orchestration processes drive business model innovation through value proposition reconfiguration, data-driven service evolution, and revenue stream transformation. Employing a post-positivist paradigm, this study conducts a longitudinal analysis of multiple cases, examining annual reports from leading industrial MNEs across wires & cables and bearing manufacturing industries over an eight to eleven-year period. The study advances theoretical understanding across three core domains. First, it extends the dynamic capabilities framework by revealing distinct roles and interactions of different capability levels, identifying a 'cross-border capability enhancement cycle' between dynamic and ordinary capabilities. Second, it advances the orchestration framework by establishing distinct patterns in how manufacturing MNEs orchestrate digital transformation and revealing specific mechanisms for global orchestration. Third, it contributes to business model innovation literature by identifying three transformative patterns in manufacturing contexts. These insights offer important implications for both theory and practice in digital transformation and international business. Keywords: Multinational Enterprises (MNEs), Digital Transformation, Dynamic Capabilities, Orchestration, Business Model Innovation

PurposeSo far, most of the literature on logistics social responsibility (LSR) has prioritized the examination, classification of and adaption toward positive LSR practices instead of investigating necessary logistics service providers’ capabilities to implement LSR strategies. Therefore, the purpose of this paper is to contribute to theory by an assessment of LSR and its linkages to dynamic capabilities theory to gain insights into how logistics service providers can foster an enhanced application of LSR practices.Design/methodology/approachThe paper is conceptual and grounded on dynamic capabilities theory. Relevant literature from logistics management, supply chain management and sustainable supply chain management (SSCM) as well as dynamic capabilities was examined to build upon existing theory by conceptualizing LSR from a dynamic capabilities perspective. In addition, propositions for future research are presented based on the conceptual model.FindingsWith regards to the controversial discussion in the literature about the direct link between dynamic capabilities and competitive advantage as well as the necessary degree of heterogeneity of dynamic capabilities, the conceptualization of LSR from a dynamic capabilities perspective adds new elements to this discussion. Considering long-term or even sustainable competitive advantage, the current degree of homogeneity across logistics services might hinder a sustainable advantage in the long run and demands for more advanced logistical capabilities. In this line, it is important to understand and utilize the causal relationships between different logistical resources and capabilities to achieve a unique long-term advantage allowing logistics service providers to further enhance LSR practices.Practical implicationsDue to the current role of logistics service providers, they should not just foster their resources focusing on the relationship to the focal firm, but they should also develop and implement new logistical capabilities derived from SSCM-related dynamic capabilities to design alternative service portfolio extensions and new business models.Originality/valueAlthough dynamic capabilities have been studied intensively in the last two decades, the causal relationships between different logistical resources and necessary dynamic capabilities to achieve advantages by enhancing LSR practices still lack conceptualization. To build on the understanding of LSR, the paper at hand presents a conceptual framework explaining LSR and SSCM practices through the lens of dynamic capabilities theory.

<p><strong>This thesis investigates empirically how the innovation and adaptation practices and capabilities of New Zealand firms relate to long-term firm performance and growth.</strong></p><p>Understanding of these issues at the whole-economy level remains incomplete. Endogenous growth models in economics have long placed innovation at the core of the economic growth process. But they do not usually represent the actual firm behaviours, practices and capabilities that drive innovation in much, if any, detail beyond R&D investment choices. They also tend to abstract from aspects of innovation that relate to adaptation to a changing environment. Some more recent papers have shown that management capabilities are important to firm performance in a static-efficiency sense, but do not explore in much detail the performance implications of capabilities specifically related to change.</p><p>By contrast, the “dynamic capabilities” literature from the strategic management discipline focuses squarely on firms’ purposeful and diverse efforts to drive and adapt to change. This literature shares common conceptual ideas with the endogenous growth literature. In both approaches, firms are motivated to innovate by the prospect of economic rents, and new ideas render old ones obsolete in a process of creative destruction. The dynamic capabilities literature also draws parallels with successful adaptation.</p><p>I empirically investigate and test the proposition that dynamic capabilities underpin long-term firm performance, as claimed by the literature. I also look at whether dynamic capabilities affect intermediate outcomes for the firm - profitability, sales, productivity, wages and employment - that are important for economic performance and public policy.</p><p>I proceed by first using the dynamic capabilities framework to guide the selection of 87 innovation- and change-related business practices and attitudes from an official, nationally representative survey of 14,146 New Zealand firms from 2005 to 2017. I extract five common factors explaining the correlations in the data on the selected practices. The factors represent the underlying dynamic capabilities of the firms. Using survival and linear regression models, I then test whether these dynamic capabilities factors are positively associated with the firm performance measures, in the presence of a range of controls. Finally, I test whether dynamic capabilities improve firm adaptation and resilience in the face of a major shock, when a firm’s challenge is to adapt rapidly in the context of diverse disruption across and within industries. I use the natural experiment of the earthquakes that devastated the city of Christchurch, New Zealand in February 2011, with a subsequent large-scale government response.</p><p>I find that dynamic capabilities related to external cooperation, proactive reorientation of marketing, openness to internal process change, expertise-intensive internationalisation, and situational awareness and responsiveness are all significantly positively associated in various contexts with long-term performance, and with sales and employment growth in the shorter term. I find that higher dynamic capabilities enabled superior performance of construction and infrastructure firms exposed to the earthquake shock, compared to their exposed peers with lower capabilities.</p><p>The study goes beyond existing literature by using a large, highly granular dataset of business practices from a nationally representative official survey to test the relationship of dynamic capabilities with firm survival, with careful attention to identification of dynamic capabilities effects on firm performance after a natural disaster.</p>

ABSTRACTIntroduction: National logistics service companies require an integrated approach to business development both to maintain the loyalty of current customers and to reach new customers, so they can work on this prospective market more optimally. To meet these demands, an increase in the company's dynamic capabilities and competencies in producing sustainable innovations is urgently needed so that it can drive the company's performance in total.Objective: The basic problem discussed in this study is how is the relationship between dynamic capability, innovation performance, and company performance in the national logistics service industry.Design/Methodology/ Approach: The research uses a literature study method related to aspects of dynamic capabilities, innovation performance, and company performance. Based on the literature study, a relationship pattern between these factors is then made as a framework for further research.Findings: That there is a direct relationship between dynamic capabilities (dynamic capabilities) with innovation performance. Variables for dynamic capabilities include adaptive capabilities, absorptive capabilities, and innovative capabilities. While the relationship between dynamic capabilities and company performance can be directly or indirectly through innovation performance.Research Implications: This research is expected to provide input or guidance for managers in making a strategic policy in a logistics company that dynamic capabilities affect the innovation performance of a company. In addition, dynamic capabilities can directly influence company performance, and innovation performance can affect company performance.

Purpose In the digital economy, the adoption and implementation of digital transformation (DX) is essential for small and medium-sized enterprises (SMEs) in the construction industry to secure a competitive advantage and achieve sustainability. This study examines the dynamic managerial capabilities of SME leaders and the organizational readiness required to facilitate DX. Design/methodology/approach Drawing on insights from 33 managers across six SMEs, the study identifies key dynamic capabilities, organizational readiness factors, and transformation challenges. The framework was further refined and validated through a Delphi process, resulting in a four-layer model that links internal capabilities to specific DX challenges and provides a structured roadmap for SME transformation. Findings Our findings reveal that DX in construction SMEs is driven by five dynamic capabilities: environmental sensing, strategic agility, resource mobilization, digital ecosystem building and organizational learning. In addition, organizational readiness serves as a critical enabler, shaped by leadership and cultural readiness, policy and stakeholder alignment and technological preparedness. Building on these insights, we propose a four-layer integrative framework that links these capabilities and readiness factors to specific internal and external challenges, providing a structured pathway for overcoming barriers and facilitating effective DX in construction SMEs. Originality/value This study provides actionable insights by clarifying how construction SMEs strategically organize and leverage DX-related resources and capabilities to drive change and maintain a competitive edge. It contributes to theory by introducing an integrative framework that illuminates the interrelationships among these resources, managerial competencies and readiness factors, offering a detailed roadmap for implementing and sustaining DX.

PurposeThis paper aims to introduce dynamic marketing capability (DMC) as a construct relevant for business research and business practice, and to test its validity in relation to company product innovations and company agility.Design/methodology/approachThis study tests a hypothesized model using partial least squares structural equation modeling on data from a survey conducted with 155 companies based in Poland.FindingsThis study provides evidence that DMC facilitates company innovations in terms of their speed and market success. Thus, DMC complements other organizational capabilities that were previously found effective for new product development (NPD) with regard to intra- and inter-organizational processes. However, the influence of DMC on company innovation success is stronger in the case of companies that operate without the pressure to customize. Thus, this approach is more relevant for companies that provide standardized offerings and which target various customer segments, rather than companies that operate in customer niches or when their NPD processes are strongly orchestrated by their customers, e.g. in B2B sales within hierarchical supply chains.Research limitations/implicationsThis study is limited by the cross-sectional empirical setting in that one country is used to test the research hypotheses. Further studies may focus on the combined effects of DMC and other important organizational capabilities, for example, flexible manufacturing, and may provide a detailed picture of DMC development by applying a longitudinal approach and case studies.Practical implicationsGenerally, managers can use this research to rethink their corporate strategies. The study proposes a specific strategic approach to corporate innovativeness: companies may acquire meaningful market benefits through systematic reconfiguration of their marketing assets, combined with the introduction of new products. However, managers should analyze their business model and industrial setting to verify to what extent their companies operate in a context relevant for reconfiguring marketing resources. If the pressure for strong customization is high in the existing customer base, investing in DMC may not be relevant, as new offerings are rather customer tailored, i.e. designed by “big fish” buyers. On the other hand, many companies may leverage their innovations with DMC in both B2B and B2C settings, as long as they can provide standard solutions as their market offerings.Originality/valueThe study contributes to marketing theory in three ways. Firstly, the study conceptualizes DMC as a distinct dynamic capability aligned with dynamic capabilities view (from which DMC logically originates), and proposes how DMC is linked nomologically with company innovativeness and agility. Secondly, a measurement instrument for DMC and an empirical test for the model are both provided. Thirdly, the paper presents evidence that the link between DMC and product innovations becomes restricted in the presence of certain contingencies, specifically with regard to the so-called customization norm.

Dynamic capabilities are considered relevant competencies in the fields of strategic management, as they are proposed as a framework for analysing the sources of wealth creation in rapidly changing environments. However, there are few authors who have analysed dynamic individual capability requirements for the manager of a business to ensure business sustainability. These authors define dynamic capabilities as individual competencies and skills available to the manager (sensing, seizing, transforming), which could influence strategic decisions and have the ability to adapt quickly to changing environments and affect business sustainability.The paper aims to analyse the existence of a relation between individual dynamic managerial capabilities and social and environmental commitment for business sustainability. The long‐term success of a firm clearly depends on the manager's capacity to establish an environment of cooperation and teamwork with stakeholders. This paper aims to look at the existence of a positive impact of individual dynamic capabilities on stakeholders' commitment.The results suggest that individual dynamic capabilities have a positive impact on business sustainability, the relation with social commitment being stronger than the relation with environment commitment. Stakeholders' engagement is positive influenced by the extent in which managers are socially committed. Individual dynamic managerial capabilities are a positive factor in the long‐term success of a firm. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment

Within the context of low-carbon development and drawing on the resource-based and dynamic capability theories, this paper provides a conceptual model of the relationship between external knowledge acquisition, green dynamic capability and corporate green innovation. Then, using 416 samples of firms in China collected from January 2018 to September 2018, the model was tested using the hierarchical regression analyses. The empirical results show that external technical knowledge acquisition and market knowledge acquisition have a positive influence on corporate green innovation. Additionally, the results show that green integration capability and green dynamic configuration capability positively moderate the relationship between technical knowledge acquisition and green innovation. The results also show that green learning capability, green integration capability and green dynamic configuration capability positively moderate the relationship between market knowledge acquisition and green innovation. This study supports the resource-based view, enriches the application of external knowledge acquisition in sustainable development, and extends the theory of green dynamic capability from causal prediction to situational factors. This paper provides theoretical support and practical guidance for firms seeking to effectively conduct open innovation, implement green innovation, and realize low-carbon development.

Firm performance has become an enormously significant focus in today's business environment, especially by construction small and mid-size enterprises (SMEs) management. Strong performance translates into higher revenues, profits, and returns on assets, enabling the firm to invest in growth opportunities and ensure its long-term sustainability. Nairobi City County has been on the frontline to ensure SMEs in the construction sector are revamped well to be on the global map and support the country's economic growth. However, despite the effort, 60% of the Nairobi City County SMEs in the construction sector fail to break even to make a profit, thus the need for this research aimed to investigate impact of strategic organizational resilience on how SME perform in the Construction Industry within Nairobi County, Kenya. Distinct objectives here include: To establish impact of organizational learning, adaptive resilience, planned resilience and dynamic capabilities on progression of SMEs within Construction sector of the Nairobi City County, Kenya. This study adopted a descriptive type of research design, and rooted on Resource Based View theory, the Balanced Scorecard Model and the Dynamic Capabilities theory. The target population comprised of 108 registered small and mid-size enterprises firms operating in Nairobi City County with 198 respondents comprising of site manager and project engineers. The study utilized primary data collected from semi-structured type of questionnaire. The questionnaire had both open and close-ended queries. The research supervisor examined the validity of the data instrument. Using the Cronbach's alpha measure (α), variability was ascertained. The quantitative data that was obtained, assigned codes and fed into software called Statistical Packages for Social Scientists (SPSS Version 25) and subsequent analysis was done with descriptive statistics. The researcher used a multiple regression analysis to quantify how strongly related variables were in the study. Responses were summarized, using tables and figures, for additional analysis and for the researcher to be able to compare interesting trends. Different quantitative measures such as tabulations, percentages, and measure of central tendency (Mean and standard deviation) were applied when reporting the findings. Before then, through the normality and multi-collinearity test conducted, the Shapiro-Wilk test p-values except for the planned resilience variable, indicated that the data for organizational learning, adaptive capability, dynamic capability, and firm performance do not significantly depart from normality. Through Pearson correlation, and multi-regression analysis, organizational learning, adaptive capability, and dynamic capabilities exhibited a statistical and strong positive correlation with firm performance, while planned resilience and SMEs performance revealed a weak and non-significant value. The study however, recommends small and mid-size enterprises to embrace organizational learning. show value and promote the culture of continuous learning and improvement among its human personnel. Feedback and lessons learnt from past trainings should be incorporated actively into the current and the upcoming organizational projects. SMEs should have the capacity to not only adjust but also respond effectively to the dynamic circumstances, hurdles and the opportunities in its external environment. Moreover, SMEs should undertake proactive measures to scan emerging trends and opportunities and in turn create an environment that welcomes innovative ideas and changes that can further be explored. Position themselves in such a flexible manner that they can effectively respond to environmental dynamics through intentional creation, extension and modification of its resource base. Establish powerful stream of partnerships. Put up strategies in check to aid in sustainability of the implemented components of strategic resilience. Foster a culture of curiosity, questioning with progressive productivity within an organization. Key Performance indicators should be examined to gauge the growth of the firm in addition to any behavioral changes.