Abstract
The conventional linear economic model of take-make-use-and-discard has long dominated business operations. However, the emergence of Circular Economy (CE) paradigm in recent years proposes a sustainable shift from extractive behaviour. This paper investigates the crucial role of dynamic capabilities in CE business model innovation. Through twenty-three interviews with senior management of the companies, it examines how sensing, seizing, and reconfiguring capabilities enable firms in adapting to changing business ecosystems. The study enriches dynamic capability theory by identifying three key contributions: crowdsourcing, attainment of business and environmental accreditations, and supply chains redesign. Participating organisations demonstrate a strong commitment to environmental sustainability, employing innovative approaches such as upcycling and closed-loop supply chains to create economic and environmental value. Organisational capabilities such as experimentation and collaboration are found to be vital for fostering innovation. The study underscores the necessity for businesses to embrace CE principles, disrupt their business models, and develop capabilities.