Investigating dynamic capabilities for sustainability-driven competitive advantage

Investigating dynamic capabilities for sustainability-driven competitive advantage

Sustainability practices have become a focal point for companies globally. Traditionally the adoption of these practices had been forced by environmental regulations, but gradually businesses have started to realise that sustainability can have far-reaching impacts on the social and economic dimensions of those businesses and society at large. Under the umbrella of corporate sustainability, organisations are failing to sharpen their focus to extract the maximum benefits. They are trying to achieve these benefits through better Environmental, Social and Governance (ESG) rankings, but this approach may not provide any competitive advantage to those businesses. To achieve a competitive advantage, businesses should have unique, inimitable capabilities that are versatile enough to sense the market dynamics, seize new opportunities, and transform businesses to outperform their competitors. These capabilities are known as dynamic capabilities. Sustainability must be treated as a dynamic capability to respond to changing market dynamics and opportunities. This research has investigated the drivers of dynamic capabilities and corporate sustainability to integrate their common themes and has developed a framework for organisations to successfully convert their sustainability practices into dynamic capabilities for sustained competitive advantage. This research has employed a Dynamic Capabilities (DC) theory lens and acts as a foundation of the “Sustainable Dynamic Capabilities” concept for future research. Through an extensive systematic literature review and by analysing expert interviews, a framework has been put forward to achieve sustained competitive advantage through utilising sustainable dynamic capabilities and achieving corporate sustainability, affirming that 1) sustainable dynamic capabilities lead to sustained competitive advantage, 2) sustainable dynamic capabilities lead to corporate sustainability, 3) corporate sustainability leads to sustainable dynamic capabilities, and 4) corporate sustainability acts as a mediator between sustainable dynamic capabilities and sustained competitive advantage.

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