Microfoundations of dynamic capabilities enabling scaling pathways of sustainability‐oriented innovation business models

Abstract Using the lens of the microfoundations of dynamic capabilities, this article sheds light on the scaling pathways (scaling up, out, and deep) of sustainability‐oriented innovation business models (SOI BMs). Empirical data from 20 small‐sized agri‐food organizations working on SOI as a core BM value proposition was collected and analyzed. We categorized microfoundations of dynamic capabilities of these organizations through multi‐layered deductive and abductive coding and a two‐level analysis and showed they are interconnected. Our results also highlight that specific microfoundations of dynamic capabilities mutually reinforce each other and collectively result in the realization of each scaling pathway. Our cross‐case analysis shows interdependence amongst scaling pathways, where the success of one is a prerequisite for another. This research offers a framework to unpack scaling pathways and provides important insights into scaling strategies and practices for developing SOI BMs, benefiting researchers, practitioners, and policymakers.