Circular Ecosystem‐Orchestrating Leadership: Microfoundations of Ecosystem‐Related Dynamic Capabilities for a Circular Economy Transition

Abstract

The transition to a circular economy (CE) increasingly depends on circular ecosystems: networks of autonomous yet interdependent actors that must coordinate material, information, and value flows to narrow, slow, and close resource loops. This creates a governance problem: Circularity requires orchestration, yet no single actor can impose coordination hierarchically. Combining an integrative review of peer‐reviewed articles at the intersection of CE, dynamic capabilities (DCs), and leadership research with theory synthesis, we introduce Circular Ecosystem‐Orchestrating Leadership (CEOL): an actor‐level, boundary‐spanning leadership capability that helps convert coordination barriers into governance outputs. We theorize three mechanisms: (1) narrative bridging translates divergent circularity meanings into shared interpretive frames; (2) platform convening creates credible multilateral commitments for coordinated investment; and (3) institutional entrepreneurship produces legitimate rule adaptation across public and private arenas. Each mechanism has a primary pathway to collective sensing, seizing, or reconfiguring respectively, but the mechanisms interact laterally and are recursively reshaped by the collective capabilities they support. Through these governance outputs, CEOL microfounds ecosystem‐level DCs. The framework advances CE leadership research beyond firm‐level adoption, extends DC theory by specifying governance‐mediated microfoundations of collective capabilities, and reframes circular ecosystem governance as a contested, territorially conditioned achievement vulnerable to narrative capture, platform capture or exclusion, and regulatory capture.