Sustainability oriented innovation dynamics: Levels of dynamic capabilities and their path-dependent and self-reinforcing logics

Abstract

In this article, we build on dynamic capabilities theory to explore the organizational dynamics for sustainability-oriented innovation (SOI). We carried out a multiple case study of seven leading companies fostering SOI, searching for common patterns in their adaptation. We found three different levels of dynamic capabilities (adapting, expanding, and transforming) interconnected to strategic sustainability dimensions. We thus propose an evolving framework that explains how the generative variation of innovative change and adaption follow two interconnected logics that explain the SOI dynamics. First, we study the time-evolving transformation that encourages companies to transform dynamic capabilities following a path-dependent logic. Second, we study organizational transformations that enhance self-reinforcement among strategic sustainability dimensions. This conceptualization contributes to the theoretical underpinnings of SOI, providing new insights on how SOI transforms dynamic capabilities for innovation and adapts companies' strategic sustainability.