Aligning Digital-Circular Capabilities and Institutional Pressure in Construction: A Strategic Framework for Circular Economy Transformation

Fredrik Lindblad

doi:10.55845/joce-2026-41368

Authors

Fredrik Lindblad Linnaeus University Author https://orcid.org/0000-0002-8778-7509

DOI:

https://doi.org/10.55845/joce-2026-41368

Keywords:

Circular Economy, Strategic Positioning, Digital Transformation, Institutional Theory, Resource-based View, Construction, Alignment, Capabilities

Abstract

Digital circular transformation requires alignment between organisational capabilities and institutional conditions. This article introduces the DCAM Strategic Positioning Matrix (SPM), integrating the Resource-Based View and institutional theory to explain variation in circular outcomes. The framework maps organisations along two dimensions, internal digital-circular capability and external institutional pressure, yielding four configurations: Minimal Effort, At-Risk, Innovation Buffer, and Ready-to-Scale. Empirical analysis of Nordic wood construction firms (N = 223) reveals a strongly asymmetric distribution, with firms concentrated in high-capability quadrants (86.5% Ready-to-Scale, 13.5% Innovation Buffer). Consequently, digital-circular capabilities function as mature baselines, whereas institutional pressures shape their translation into circular outcomes. Regression analyses show additive effects (capability: β = 0.420, p = .003; pressure: β = 1.136, p < .001) without multiplicative interaction, suggesting parallel rather than synergistic mechanisms. The study contributes by (1) identifying a boundary condition for capability-based theory: when digital-circular capabilities reach sectoral saturation, institutional pressure becomes the primary driver of outcome heterogeneity, shifting the focus from capability development to capability activation; (2) operationalizing this boundary condition through a configurational alignment framework that makes capability–context fit analytically explicit; and (3) providing a replicable diagnostic tool for strategic positioning in circular transformation contexts. Consequently, in mature settings, circular economy acceleration appears to depend more on strengthening institutional pressure than on further capability development, shifting policy focus from supporting adoption to activating existing capabilities at scale.

Author Biography

Fredrik Lindblad, Linnaeus University

School of Business and Economics, Department of Management

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