Translating circularity into strategy: A governance meta‐capability framework

Felix Carl Schultz and Vladislav Valentinov

EconStor Open Access Articles and Book Chapters, 2026, vol. 35, issue 6, 8746-8758

Abstract: Firms struggle to transition to circular economy (CE) models, often citing external barriers. Yet some firms succeed, whereas others fail: Why? We argue that success depends on a specific governance capability—a meta‐capability that allows firms to (1) sense and strategically reframe CE imperatives, (2) seize opportunities by aligning diverse stakeholders, and (3) reconfigure institutional incentives. Building on dynamic capability (DC) theory, we conceptualize this governance meta‐capability as an external‐facing DC that enables firms to translate sustainability imperatives into robust business strategies. This capability acts as a translator between sustainability goals and business strategy, enabling firms to proactively construct, test, and scale circular business cases and models rather than wait for favorable external conditions. We thus shift the explanation for CE performance from external barriers to internal, DCs, showing how the business case for circularity is strategically built, not passively discovered, and offering a theory‐driven framework for understanding how firms can develop this governance meta‐capability.

Keywords: circular business case; circular business model; circular economy; dynamic capability; governance; microfoundations (search for similar items in EconPapers)
Date: 2026
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/343407/1/S ... ting_circularity.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:espost:343407

DOI: 10.1002/bse.70601

Access Statistics for this article

More articles in EconStor Open Access Articles and Book Chapters from ZBW - Leibniz Information Centre for Economics Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().