Proactive Despite Tensions? The Role of Paradox Mindset in Organizational Change Towards the Circular Economy

ABSTRACT As organizations respond to calls for sustainability, many invest in organizational change towards a circular economy (OCCE), which often depends on employee proactivity. However, OCCE is fraught with tensions that can either limit or foster proactive efforts. This raises critical questions: When and why do employees remain proactive for circularity in light of such tensions? Building on paradox theory, we investigate the moderating role of a paradox mindset in mitigating the potentially adverse effects of two central OCCE tensions: intertemporal and intergroup. Further, based on approach‐avoidance and cognitive dissonance theory, we examine the mediating roles of intertemporal cognitive processing and intergroup perspective taking. Using survey data from 199 employees, our results suggest that experienced tensions can positively influence employee proactivity, with exploratory evidence indicating a J‐shaped, curvilinear relationship. We contribute to the emerging micro‐foundational understanding of OCCE, highlight paradox mindsets in attenuating negative effects of tensions, and demonstrate the importance of tension levels in influencing employee proactivity.