Promoting sustainable business model innovation: a dynamic capabilities approach

Purpose Faced with a context in which the circular economy is seen in academia, in companies and political decision-makers as a promising vision capable of building prosperity within planetary limits, understanding how to transform linear business models into circular ones becomes urgent. Based on the understanding that understanding how dynamic capabilities support the transition to a circular business model is still incipient, this study aimed to contribute to this gap. Design/methodology/approach A single case study was carried out, with a procedural approach of the Brazilian petrochemical company Braskem S.A., a world leader in producing biopolymers from renewable raw materials. Data were collected through interviews and document analysis and analyzed using narrative and temporal scaling techniques. Findings The main results indicate that the transition to a circular business model process happens in 4 phases. We also found that each phase mobilizes a different pattern of micro-foundations and, in turn, recruits different dynamic capabilities. We also identified a new dynamic capability, in addition to Teece's (2007) sensing, seizing and transforming capability, the orchestrating capability, which is associated with the mobilization of external resources for the company to create value collaboratively for itself and its stakeholders in the value chain. Research limitations/implications We choose a unique case study that promises us just the theoretical generalization not a statistical one. Practical implications Our study presents a set of microfoundations for successful circular business model innovation. Thus, managers can benefit from our results and conceive which practices and routines they can use in their companies to promote a sustainable transformation of their business model. Originality/value In general lines, the findings of this study provide companies with a clear framework for transforming their business models towards sustainability. As companies progress through the identified phases, they can adopt more effective strategies to promote sustainable innovation. The emphasis on reconfiguration and integration capabilities in advanced phases highlights the importance of collaboration and socio-environmental responsibility throughout the value chain, enabling companies to gain a competitive advantage by meeting the increasing expectations from the ecosystem.