A capability map for implementing the circular economy in organizations

Abstract The circular economy (CE) plays a vital role in transforming our current economic system into a more sustainable one. However, effectively implementing circular strategies and actions within organizations is a complex endeavor. It requires managing or developing diverse capabilities across the organization and its entire ecosystem, including the purposeful use of digital technologies and data, investment decisions, and knowledge sharing about products and materials. Drawing on more than 600 min of expert interview recordings and an analysis of 37 sustainability reports from the automotive industry, this paper examines the dynamic capabilities that support the implementation of circularity in organizations. We propose a framework in the form of a capability map that includes 74 specific microfoundations that help organizations to engage, manage, and reflect while implementing circular activities. This paper complements existing tools for organizational transitions, contributing to the growing body of knowledge on circularity strategy implementation, and lays the foundation for more effective CE practices in the industry.