Abstract:
"The circular economy is increasingly seen as essential to gaining a competitive
advantage and reducing the effect of manufacturing on the environment. However,
with mounting pressure on companies to adopt the three pillars of sustainability
(economic, environmental, and social), many companies need help to convert the
circular economy practices into a business model. The literature indicates that
companies require dynamic capabilities to facilitate the transitions to implementing
circular economy practices, but there needs to be more discussion on what
capabilities are required and how to incorporate them. A qualitative research
approach was taken to understand the dynamic capabilities that either help or hinder
the development and implementation of sustainability initiatives in SMEs that have
successfully transitioned. The findings indicate that a deeply embedded sustainability
culture throughout these companies, driven by strategy and top management, is
critical for incorporating sustainability.
Furthermore, companies with sustainability at the core are willing to adapt and
change anything within the business to take advantage of new opportunities provided
they contribute to the sustainability vision of the company and are financial viable.
Stemming from the capabilities within these companies, these companies have
successfully incorporated the three pillars of sustainability into their business model.
The main barriers inhibiting sustainability implementation are lack of access to
capital, insufficient guidelines, standards and regulations, education and an
understanding of how to incorporate sustainability into practice. This study
contributes to the literature by identifying four sensing, four seizing and six
reconfiguring building blocks of microfoundations of dynamic capabilities found in
SMEs that have successfully transitioned. These may guide SMEs to incorporate
sustainability practices within these companies. The limitation of this study is that
interviews were conducted with top-level managers and heavily weighted toward the
textile manufacturing industry in KwaZulu Natal."
