A dynamic capabilities perspective on implementing the Circular Transition Indicators: A case study of a multi‐national packaging company

Abstract The use of life cycle‐based assessment has been defined a crucial microfoundation to implement circular business models from a dynamic capabilities perspective. Through a case study of a multi‐national packaging corporation in the plastics sector, the application of an industry‐developed circularity assessment, the Circular Transition Indicators (CTI), is analysed in two manufacturing locations (Italy and China). The aim is to identify how this life cycle‐based assessment can amplify the company's capability to sense, seize and reconfigure its resources. Data were collected from a company placement, interviews, and sustainability reports. The CTI mainly contributed to the sensing microfoundations concerning the company's life cycle‐based perspective and the use of environmental management tools. It also proved to complement existing life cycle‐based approaches because it does not identify sustainability impacts, but only captures material flows. Furthermore, the results showed how the CTI implementation benefitted from existing microfoundations, such as the strategic collaboration with knowledge partners and previously collected sustainability and process efficiency data. Finally, it was also discussed for which microfoundations the CTI results could be most useful: to improve internal resource management processes and to support external circularity pledges. This paper contributes an empirical example to connect dynamic capabilities with life cycle management literature in a circular economy context.