Dynamic capabilities and organizational routines for managing innovation towards sustainability

This study aims to shed light on how dynamic capabilities, i.e. sensing, seizing and reconfiguring, and their underlying organizational routines have an effect on innovation towards a greater degree of sustainability. Cross-sectional data from the Community Innovation Survey of German companies is used to test hypotheses with regard to this effect. Results from PLS-SEM analyses show that sensing, seizing, and reconfiguring capabilities all have a significant direct effect on innovation towards sustainability, with sensing activities playing the most prominent role. It is also found that reconfiguring capabilities positively influence sensing as well as seizing capabilities, and that sensing and seizing capabilities partially mediate the relationship between reconfiguring capabilities and companies’ sustainable innovation. This research extends the current literature by investigating how companies could build-up and shape their dynamic capabilities and organizational routines for sustainable innovation. To practice, it offers guidance concerning appropriate and important dynamic capabilities and organizational routines for innovating towards sustainability.