Leveraging circular dynamic capabilities: enabling firms’ transition towards circular supply chain

Purpose This study investigates how dynamic capability (DC) relationships and deployment patterns enable firms to transition from sustainable supply chain management to circular supply chains (CSC). Design/methodology/approach A mixed-methods, exploratory sequential design combined a multiple case analysis of four multinational manufacturing firms with quantitative validation. The qualitative phase analyzed semi-structured interviews and corporate documents to identify DCs and their deployment patterns. The quantitative phase employed Ward's hierarchical clustering on academic expert evaluations to examine relationships among capabilities, refining case-derived patterns into generalizable configurations that enable CSC transitions. Findings This research identifies Circular DCs into three groups, with their relationships facilitating the adoption of circularity. Foundational Innovation DCs (Technology Management, Product Design Management, Process Innovation) establish an internal infrastructure to enable circularity. Transitional Collaboration DCs (Supply Chain Collaboration, Supply Market Orientation) facilitate integration across the supply chain partners. Scaling Enablement capabilities (Human Resource Management, Marketing) support ongoing transformation. These groups enable firms to progress through three practice types supporting circularity strategies. Foundational practices emerge from complementary relationships among Foundational Innovation DCs deployed at balanced levels of reconfiguring and seizing. Transitional practices emerge when Transitional Collaboration DCs form integrative relationships with established Foundational Innovation DCs. Scaling practices require reconfiguring the dominant deployment of both Foundational Innovation and Transitional Collaboration DCs, with support from Scaling Enablement capabilities. Research limitations/implications The limited longitudinal analysis and sample size suggest caution in generalization. Future research should examine DCs across diverse contexts and timeframes. Practical implications The framework directs the sequencing of capability development, starting with establishing Foundational Innovation DCs through balanced deployment, then adding Transitional Collaboration DCs once the foundations are in place, and finally developing Scaling Enablement capabilities for ongoing transformation. Social implications The research highlights ways to improve societal well-being by emphasizing collaboration among supply chain partners. These findings support sustainable employment and shape public attitudes toward circular practices. Originality/value This study advances DC theory by showing that adopting circularity depends on specific relational configurations and deployment patterns rather than individual capability strength. It reveals how complementary, integrative, and enabling relationships across deployment levels facilitate collaborative transitions to CSC practices.