Unravelling the nice-to-have and must-have circular economy-oriented dynamic capabilities for sustainable product design and end-of-life management : insights from PLS-SEM and NCA

Abstract

Drawing on the dynamic capabilities theory, a multi-method approach was used to examine the effects of circular economy-oriented dynamic capabilities on sustainable product design and end-of-life management. Partial Least Squares Structural Equation Modelling (PLS-SEM) and Necessary Condition Analysis (NCA) were employed on survey data from 285 manufacturing firms in Ghana. The findings show that whereas reconfiguring capabilities enhance sustainable end-of-life management, sensing and seizing capabilities were not direct predictors of sustainable end-of-life management. Nonetheless, sustainable product design was found to be a mechanism through which sensing and seizing capabilities promote sustainable end-of-life management. Also, apart from reconfiguring capabilities, sensing and seizing capabilities were positive predictors of sustainable product design. The NCA results suggest that all three circular economy-oriented dynamic capabilities (i.e., sensing, seizing, and reconfiguring capabilities) are must-have (necessary) conditions for sustainable product design and end-of-life management. We provide empirical evidence (via PLS-SEM and NCA) of the nice-to-have and must-have circular economy-oriented dynamic capabilities for sustainable product design and end-of-life management, besides highlighting sustainable product design as a mechanism through which these capabilities enhance sustainable product design.