As businesses confront increasing environmental pressures, material depletion and sustainability-related operational risks, circular supply chain management (CSCM) has emerged as a central strategy for enabling sustainable production and consumption transitions (Cano et al. 2025). Circular supply chain management promotes practices such as recycling, remanufacturing, reverse logistics and material recovery to minimise waste and extend resource lifecycles within supply chains (Hamid et al. 2026). Recent studies emphasise that CSCM contributes not only to environmental sustainability but also to operational resilience, competitive advantage and resource efficiency, particularly in industries facing ecological and economic uncertainty (Agyabeng-Mensah, Baah & Afum 2025; Zhu et al. 2026). Despite growing attention, CSCM implementation remains uneven across firms and regions, especially in developing economies characterised by institutional weaknesses and structural resource constraints (Kirchherr et al. 2023; Ndoka, Alimehmeti & Shulla 2025). Existing explanations often focus on barriers such as inadequate infrastructure, financial constraints and technological deficiencies (Pellegrino et al. 2026).

However, these accounts largely identify obstacles without adequately explaining how firms develop circular capabilities under persistent scarcity. As a result, CSCM theory remains limited in explaining capability formation when resource stability cannot be assumed.

This gap exposes a key assumption of the Resource-Based View (RBV), namely that firms require stable and sufficient resources to build valuable, rare, inimitable and non-substitutable (VRIN) capabilities for sustained competitive advantage (Barney 1991; Peteraf 1993). Classical RBV conceptualises capability development in contexts where firms access financial, technological and operational resources that enable accumulation and deployment. However, recent scholarship questions this assumption in structurally constrained environments where scarcity is systemic rather than temporary (Shen & Chen 2025). Taddei et al. (2024) argue that theoretical advances often arise when empirical realities challenge dominant assumptions. In many developing economies, firms face persistent infrastructural instability, limited technology diffusion and restricted financial access, making resource sufficiency problematic (Aryee & Kanda 2024; Petropoulos et al. 2026). In such contexts, firms may build capabilities not through abundance, but through adaptation, recombination and prioritisation of scarce resources.

Liberia’s mineral water sector offers a useful context because scarcity is structural rather than episodic. Firms operate under weak recycling systems, unstable supply chains, limited technological support, and weak environmental governance, yet still display varying levels of CSCM implementation. This variation suggests that some firms develop circular capabilities despite severe constraints, while others struggle under similar conditions. Evidence indicates that firms in developing economies increasingly rely on adaptive capabilities and resource recombination strategies to overcome institutional and operational deficiencies (Aryee & Kanda 2024). Thus, the sector is appropriate for examining capability formation where RBV assumptions do not hold. Structural scarcity may therefore reshape how firms evaluate, coordinate, and deploy strategic resources for sustainability objectives.

Building on scarcity-oriented and dynamic capability perspectives, this study argues that structural scarcity alters mechanisms through which CSCM capabilities emerge (Li et al. 2025). Scarcity not only reduces resource availability but also changes how organisations prioritise and utilise strategic resources. Under constrained conditions, firms rely on managerial commitment (MC), process adaptability, selective orchestration and disciplined resource allocation to support circular practices such as recycling, reverse logistics and material recovery (Farooque et al. 2022; Shen & Chen 2025). Scarcity can also stimulate innovation and resilience by encouraging recombination of existing resources and redesign of operational routines (Alam & Ullah 2025; Yordanova & Shotarov 2026).

Unlike prior CSCM studies that consider broad organisational and institutional drivers, this study focuses on MC, operational process capability (OPC) and resource allocation discipline (RAD) as key internal mechanisms of capability recombination under scarcity. Managerial commitment reflects strategic prioritisation; OPC reflects process redesign with limited resources; and RAD reflects structured orchestration of scarce resources. These variables align with a scarcity-oriented reinterpretation of RBV and jointly explain internal capability formation. External factors such as technological readiness, stakeholder pressure and collaboration were not prioritised as they are less reflective of internally generated adaptation under severe constraints.

Using data from 306 respondents across three mineral water companies in Liberia, the study employs Partial Least Squares Structural Equation Modelling (PLS-SEM) to test these relationships. It extends RBV by proposing a scarcity-oriented view of capability formation and advances CSCM literature by explaining how firms transform structural scarcity into a catalyst for circular capability development in resource-constrained contexts.

The purpose of this study was to examine how internal factors influence the implementation of CSCM in Liberia’s mineral water sector, particularly within contexts characterised by structural resource scarcity.

The study objectives were:

This section synthesises existing research on CSC, internal organisational capabilities and the influence of government policy. It examines how key organisational factors, including MC, OPC and RAD, contribute to the implementation of CSC practices. The review also identifies theoretical and empirical gaps in the existing literature, particularly regarding CSC adoption in resource-constrained environments. It therefore provides the conceptual foundation for the development of the study’s hypotheses and conceptual framework.

The implementation of CSC has attracted increasing scholarly attention as organisations seek to address environmental sustainability and resource efficiency challenges. Circular supply chain encompasses practices such as recycling, remanufacturing, material reuse and reverse logistics, all aimed at extending resource lifecycles and minimising waste (Geissdoerfer et al. 2017; Govindan et al. 2020). These practices are widely recognised as critical mechanisms for reducing environmental impact while maintaining economic performance (Agyabeng-Mensah et al. 2025). Despite its growing relevance, the adoption of CSC remains uneven across firms and contexts, particularly in resource-constrained environments where infrastructural and institutional limitations persist (Kirchherr et al. 2023; Shourkaei, Taylor & Dyck 2024).

Traditional explanations for this variation often emphasise external constraints such as inadequate infrastructure, financial limitations and technological gaps (Bressanelli et al. 2018; Kirchherr et al. 2023).

However, such perspectives tend to focus primarily on barriers to adoption rather than explaining how firms develop capabilities under conditions of scarcity (Hyvärinen, Keskinen & Levänen 2020). As a result, recent scholarship has increasingly shifted attention toward internal organisational factors as primary drivers of CSC implementation, particularly in developing economy contexts where firms must rely more heavily on internally generated capabilities (Aryee & Kanda 2024).

Drawing on the RBV, firms are understood to achieve competitive advantage through the development and deployment of valuable internal capabilities (Barney 1991; Peteraf 1993). However, the classical RBV assumes relative resource sufficiency, which is often unrealistic in developing economies characterised by persistent structural constraints (Bromiley & Rau 2016). In response, recent studies propose a scarcity-oriented extension of RBV, arguing that firms can develop capabilities through the recombination and strategic use of limited resources rather than through accumulation (Randall 2021).

Within this perspective, internal organisational mechanisms become central to CSC implementation. Firms operating in resource-constrained environments actively reinterpret, recombine and repurpose scarce resources to create circular capabilities such as reverse logistics systems and material recovery processes (Farooque et al. 2022). These processes demonstrate that scarcity can function as a generative condition, stimulating innovation, flexibility and strategic problem-solving rather than merely constraining organisational performance (Williams et al. 2021).

While many previous studies broadly identify organisational capabilities as important for CSC adoption, there is limited consensus regarding which specific internal mechanisms are most critical under conditions of structural scarcity. Some scholars emphasise technological capability and digital integration as primary enablers (Bressanelli et al. 2018), whereas others argue that leadership orientation and organisational flexibility are more decisive in developing economy contexts where advanced infrastructure is absent (Aryee & Kanda 2024). Similarly, Govindan et al. (2020) highlight supply chain collaboration as central to CSC implementation, while Shen and Chen (2025) contend that internally driven resource orchestration is more important in environments characterised by institutional instability. These contrasting findings suggest that CSC capability development is context-dependent rather than universally determined by a fixed set of factors.

Empirical evidence from recent studies further supports this argument by demonstrating that CSC implementation is strongly influenced by internal organisational factors, particularly MC, OPC, and RAD (Montag 2023). These findings reinforce the view that CSC adoption is fundamentally an internally driven process, especially in contexts where external support mechanisms are weak or inconsistent, and where firms must rely on internal capability orchestration to achieve sustainability outcomes.

Managerial commitment is widely recognised as a critical determinant of sustainability initiatives and CSC adoption. It reflects the extent to which top management prioritises, supports and integrates circular practices into organisational strategy and operations (Agyabeng-Mensah et al. 2025; Govindan et al. 2020). Empirical studies consistently show that leadership support is a key enabler of environmental and supply chain innovations, as it provides strategic direction and legitimacy for sustainability initiatives within organisations (Farooque et al. 2022).

In the context of resource scarcity, MC plays a transformative role by reframing constraints as opportunities for innovation rather than barriers to performance (Williams et al. 2021). As noted in recent studies, committed managers encourage employees to view residual resources as valuable inputs rather than waste, thereby fostering a culture of circular thinking and continuous improvement (Kirchherr et al. 2023; Montag 2023). This strategic orientation enables firms to identify new value creation pathways and implement circular practices despite limited financial and technological resources (Shen & Chen 2025).

From an RBV perspective, MC can be conceptualised as a higher-order organisational capability that shapes the development and deployment of other firm resources (Barney 1991; Peteraf 1993). It influences strategic decision-making, resource prioritisation and organisational learning processes, all of which are essential for CSC implementation (Bromiley & Rau 2016; Randall 2021).

Furthermore, empirical findings indicate that firms with strong MC are significantly more likely to adopt circular practices such as recycling, reverse logistics and sustainable resource utilisation, as leadership support reduces resistance to change and facilitates cross-functional coordination (Alam & Ullah 2025; Farooque et al. 2022).

Recent literature also highlights that MC enhances organisational resilience and adaptability in uncertain and resource-constrained environments. By promoting long-term sustainability goals and fostering innovation, committed leadership enables firms to navigate the operational and strategic complexities associated with CSC transitions (Aryee & Kanda 2024).

Operational process capability refers to a firm’s ability to design, adapt and manage processes that support CSC activities. It encompasses process flexibility, efficiency and the integration of circular practices into routine operations (Farooque et al. 2022; Govindan et al. 2020). Existing literature recognises operational capability as a critical organisational competence that enables firms to translate sustainability-oriented strategies into practical supply chain activities (Agyabeng-Mensah et al. 2025; Li et al. 2025).

The literature further emphasises that operational capability is a key enabler of CSC, as it facilitates the implementation of circular practices such as recycling, remanufacturing and reverse logistics systems (Bressanelli et al. 2018; Kirchherr et al. 2023). In resource-constrained environments, firms are often required to redesign existing supply chain routines to accommodate circular practices, including decentralised recovery systems and material reuse processes (Pellegrino et al. 2026; Shen & Chen 2025). These adaptive processes allow organisations to optimise resource utilisation and minimise waste despite infrastructural and technological limitations, which are common barriers in developing economy contexts (Hyvärinen et al. 2020).

From a theoretical standpoint, OPC aligns with dynamic capability theory, which emphasises the ability of firms to reconfigure resources and processes in response to changing environmental conditions (Eisenhardt & Martin 2000; Teece 2018). Within the CSC context, this capability involves the continuous adaptation and reconfiguration of supply chain processes to support circular flows of materials, including reuse, recycling and closed-loop systems (Farooque et al. 2022; Govindan et al. 2020; Massari, Nacchiero & Giannoccaro 2023).

Empirical evidence further suggests that firms with strong operational capabilities are better positioned to manage the complexities associated with CSCs, including product returns, material recovery and coordination among supply chain partners (Bimpizas-Pinis, Calzolari & Genovese 2022; Montag 2023). These capabilities enhance supply chain integration, improve process efficiency and support the effective implementation of CSC practices. Moreover, such capabilities are particularly important in developing economies, where firms must rely on internal innovation and process flexibility to compensate for weak infrastructure and limited external support systems (Alam & Ullah 2025; Aryee & Kanda 2024).

Resource allocation discipline refers to the strategic prioritisation and efficient utilisation of limited resources to achieve organisational objectives. It is especially critical in resource-constrained environments, where firms must make deliberate decisions regarding the allocation of financial, material and human resources in order to maintain operational efficiency and competitiveness (Osei et al. 2023). Existing literature emphasises that effective resource allocation is a fundamental managerial function that directly influences organisational performance and the successful implementation of strategic initiatives, including sustainability-oriented practices (Barney 1991; Peteraf 1993).

The literature further identifies RAD as a key mechanism through which firms convert scarcity into capability. By concentrating limited resources on high-impact initiatives, organisations are able to maximise the value derived from constrained inputs and support the implementation of CSC practices (Shen & Chen 2025). This perspective is consistent with emerging scholarship on scarcity-oriented capability development, which suggests that firms can achieve efficiency and innovation through resource recombination and prioritisation rather than resource abundance (Yordanova & Shotarov 2026).

Within the RBV framework, RAD represents an organisational capability that enhances the efficiency and effectiveness of resource utilisation. It enables firms to balance competing priorities and strategically invest in circular initiatives such as recycling systems, waste reduction programmes and sustainable production processes (Dey et al. 2022; Farooque et al. 2022; Govindan et al. 2020). By directing resources toward sustainability-focused activities, firms can improve both environmental and operational performance outcomes (Agyabeng-Mensah et al. 2025).

Empirical findings from recent studies further demonstrate that disciplined resource allocation is a significant predictor of CSC implementation, highlighting its importance in enabling firms to adopt and sustain CSC practices (Alam & Ullah 2025; Montag 2023). In addition, RAD contributes to organisational resilience by enabling firms to adapt to changing environmental conditions and resource constraints, particularly in uncertain and resource-limited contexts (Aryee & Kanda 2024; Duchek 2020).

Government policy plays a critical role in shaping the institutional environment within which firms operate and significantly influences the adoption of CSC practices (Kalmykova, Sadagopan & Rosado 2018; Schöggl, Stumpf & Baumgartner 2020). Policies such as environmental regulations, recycling standards and extended producer responsibility (EPR) frameworks provide formal guidelines and economic incentives that encourage firms to implement CSC practices (Govindan et al. 2020; Kirchherr et al. 2023). These regulatory instruments are widely recognised as essential mechanisms for promoting sustainable production and consumption patterns across industries (Borgia, Zavalloni & Viaggi 2025).

In the context of Liberia, government policy on environmental sustainability and natural resource management is primarily guided by the Environmental Protection Agency Act (EPA Act of 2003, amended 2019), the National Environmental Policy (Government of Liberia, 2002) and sector-specific frameworks governing forestry, mining, agriculture, and waste management. The Environmental Protection Agency of Liberia (EPA) serves as the lead regulatory body responsible for enforcing environmental compliance, conducting environmental impact assessments (EIAs) and coordinating national responses to environmental degradation and climate change. In addition, Liberia’s participation in international climate commitments, including the Paris Agreement, has reinforced national efforts toward low-carbon development and green growth strategies. Sectoral policies such as the (Food and Agriculture Organisation of the United Nations Legal Office Database [FAOLEX] 2026), the Liberia Extractive Industries Transparency Initiative (LEITI) and waste management regulations under local authorities reflect ongoing attempts to promote sustainable resource extraction, transparency and environmental accountability.

However, despite these policy frameworks, enforcement capacity remains limited because of institutional weaknesses, inadequate funding and technical constraints, which often result in a gap between policy formulation and implementation. Green initiatives, including community reforestation programs, plastic waste reduction campaigns and emerging circular economy awareness efforts, are still in early stages of development and largely dependent on donor and development partner support. This policy environment, therefore, presents a mixed institutional context where regulatory intent toward sustainability exists, but practical enforcement and operationalisation remain constrained, thereby making organisational internal capabilities even more critical for driving CSC adoption in Liberia.

Institutional theory suggests that firms respond to regulatory pressures in order to achieve legitimacy, comply with societal expectations, and maintain their competitive positioning within the market (Juráček, Jurík & Makyšová 2025; Kalmykova et al. 2018). In this context, coercive pressures arising from government regulations often compel organisations to adopt environmentally sustainable practices, including CSC (Farooque et al. 2022; Schöggl et al. 2020). However, the effectiveness of government policy in promoting CSC is not uniform and depends largely on the alignment between policy frameworks and organisational capabilities, as well as the broader institutional context in which firms operate (Petropoulos et al. 2026).

Empirical evidence from recent studies indicates that while government policy can provide institutional stability and operational guidance, its impact on CSC implementation is often contingent on contextual factors such as regulatory quality, enforcement mechanisms and firm-level readiness (Zhu et al. 2026). In some cases, policy frameworks facilitate circular practices by reducing uncertainty, legitimising sustainability initiatives and providing incentives for innovation (Adomako & Tran 2026; Govindan et al. 2020). Conversely, rigid or poorly aligned policies may impose compliance burdens that limit organisational flexibility, increase operational costs and hinder innovation, particularly in resource-constrained environments (Farooque et al. 2022).

This dual role of government policy highlights the need for context-sensitive regulatory frameworks that support rather than constrain organisational capabilities. Scholars argue that effective policy design should emphasise flexibility, alignment with firm-level realities and the provision of enabling conditions that foster innovation and capability development (Schöggl et al. 2020). Such an approach is particularly important in developing economies, where institutional weaknesses and resource constraints may otherwise limit the effectiveness of policy interventions in promoting CSC adoption.

Beyond its direct influence, government policy plays a moderating role in the relationship between internal organisational factors and CSC implementation. It shapes how effectively internal capabilities – such as MC, OPC and RAD – translate into actual CSC practices (Farooque et al. 2022; Govindan et al. 2020; Hernandez Marquina et al. 2024). Existing studies emphasise that the interaction between firm-level capabilities and institutional frameworks is critical in determining sustainability outcomes (Bari, Chimhundu & Chan 2024; Kirchherr et al. 2023; Schöggl et al. 2020).

Empirical evidence suggests that government policy provides the institutional framework necessary for internal mechanisms to operate effectively by reducing uncertainty, establishing regulatory clarity and creating structured operational pathways for firms (Duchek 2020; Wieland & Durach 2021). Policy instruments such as recycling regulations, environmental standards and reverse logistics mandates have been shown to enable firms to experiment with circular practices and sustain capability development over time (Bari et al. 2024). These mechanisms enhance the effectiveness of internal organisational factors by aligning firm-level initiatives with broader institutional expectations.

However, empirical findings also reveal that government policy may exert a negative moderating effect under certain conditions, particularly when regulatory frameworks are rigid or poorly aligned with firm-level realities (Ortega Perals et al. 2025). Excessive regulatory pressure can increase compliance costs, reduce operational flexibility and limit the ability of firms to innovate and adapt their processes to support CSC implementation (Petropoulos et al. 2026). This suggests that policy interventions must be carefully designed to avoid constraining organisational adaptability, especially in resource-constrained environments.

From a theoretical perspective, these findings extend institutional theory by highlighting the contingent and non-linear nature of policy influence on organisational behaviour. While traditional institutional theory emphasises the role of coercive pressures in driving organisational conformity (Aghajani, Memari & Sankaran 2026), recent scholarship suggests that the effectiveness of such pressures depends on their alignment with internal capabilities and contextual conditions (Schöggl et al. 2020; Shen & Chen 2025). Rather than uniformly promoting sustainability adoption, government policy interacts with internal organisational factors in complex ways, either enhancing or constraining CSC implementation depending on the degree of contextual alignment and institutional support.

Circular supply chain implementation involves integrating circular economy principles into supply chain activities to reduce waste, extend product lifecycles and improve resource efficiency (Hamid et al. 2026). Unlike linear ‘take–make–dispose’ models, CSCs emphasise closed-loop systems where materials and products are reused, remanufactured, or recycled (Cano et al. 2025). This transition requires firms to redesign supply chain structures, processes and inter-organisational relationships to support circular material and information flows (Bimpizas-Pinis et al. 2022).

Circular supply chain operational practices include reverse logistics, product life extension, recycling, remanufacturing and waste recovery (Bari et al. 2025; Cano et al. 2025; Hamid et al. 2026). These practices allow firms to recover value from end-of-life products, reduce dependency on virgin resources, and enhance economic and environmental performance (Geissdoerfer et al. 2017; Kirchherr et al. 2023). Empirical studies indicate that CSC adoption improves resource efficiency, reduces material costs and strengthens competitive advantage (Agyabeng-Mensah et al. 2025; Govindan et al. 2020).

Theoretically, CSC implementation is explained through the RBV and dynamic capability theory. Resource-Based View posits that superior performance derives from valuable, rare and inimitable resources and capabilities, such as process innovation, supply chain integration and sustainability-oriented leadership (Barney 1991). Dynamic capability theory highlights the firm’s ability to reconfigure resources and adapt processes in response to environmental changes, essential for managing CSCs (Eisenhardt & Martin 2000; Teece 2018).

Implementation challenges are pronounced in developing economies, where financial, infrastructural, regulatory and technical constraints exist (Hyvärinen et al. 2020; Ndoka et al. 2025). Successful CSC relies on internal capabilities, including MC, operational flexibility and effective resource allocation (Aryee & Kanda 2024; Shen & Chen 2025). Moreover, implementation is a continuous process requiring collaboration across the supply chain to enable learning, resource coordination and joint problem-solving (Yan et al. 2023). Finally, CSC adoption is context-dependent, with variations across industries and regions driven by institutional environments, resource availability and technological capabilities (Kirchherr et al. 2023; Shen & Chen 2025). In resource-constrained settings, firms adopt adaptive and innovative strategies to implement circular practices, leveraging internal capabilities to overcome structural limitations (Randall 2021).

Circular supply chain has become a key tactic for businesses seeking to improve sustainability through waste reduction, resource lifespan extension and increased production and distribution efficiency (Rashid & Rasheed 2025). These approaches are widely recognised as central to achieving sustainable production and consumption systems across industries (Shourkaei et al. 2024). Circular supply chain emphasises strategies such as recycling, remanufacturing, material reuse and closed-loop logistics intended to reduce environmental impact while preserving economic performance (Hamid et al. 2026; Sarstedt et al. 2022). Despite the growing popularity of CSC in both academic and professional circles, a significant knowledge gap remains regarding how businesses implement circular practices, particularly in resource-constrained environments (Pellegrino et al. 2026; Shourkaei et al. 2024). As Stern (2000:421) notes, ‘a general theory lies far in the distance’, highlighting the lack of a comprehensive framework capable of guiding sustainability-oriented operational decisions. Similarly, Kalmykova et al. (2018) argue that sustainability integration into strategic and operational decision-making remains fragmented and often lacks clear procedures or causal explanations.

Many existing studies implicitly assume that firms operate in environments characterised by stable resource availability, predictable supply chains and adequate technological and financial infrastructure (Agyabeng-Mensah et al. 2025; Osei et al. 2023; Petropoulos et al. 2026; Shourkaei et al. 2024; Yan et al. 2023). These assumptions reflect studies conducted largely in developed economy contexts where institutional support systems and infrastructure are well established (Bressanelli et al. 2018; Kirchherr et al. 2023). However, this assumption does not hold in many emerging economies, including Liberia, where resource scarcity is structural rather than incidental (Aryee & Kanda 2024). Limited access to raw materials, inadequate infrastructure, restricted financial and technological resources, and unstable supply chain flows are common constraints affecting firms in such contexts (Petropoulos et al. 2026; Yan et al. 2023). These conditions raise an important theoretical question: how can firms develop circular capabilities in contexts where resource abundance is absent if the traditional RBV assumes that competitive advantage arises from the possession of valuable, rare, and inimitable resources (Barney 1991; Peteraf 1993)? This puzzle forms the theoretical foundation of this study.

Previous research has occasionally applied stakeholder theory and institutional theory to explain CSC adoption (Choudhary et al. 2022; Taddei et al. 2024). Stakeholder theory emphasises social and normative pressures, suggesting that firms adopt circular practices to meet expectations from investors, customers, regulators and society (Mahajan et al. 2023; Sarstedt et al. 2022; Schöggl et al. 2020). Institutional theory focuses on how organisations conform to external norms, regulations and rules to achieve legitimacy within their operating environments (Kalmykova et al. 2018). While these perspectives explain external pressures and compliance motivations, they provide limited insight into how firms internally transform constrained resources into circular capabilities (Farooque et al. 2022; Kirchherr et al. 2023).

To address these limitations, this study adopts the RBV as its primary analytical lens but adapts it to contexts of structural scarcity. Classical RBV suggests that firms achieve sustained competitive advantage by acquiring and deploying resources that are VRIN (Barney 1991; Peteraf 1993). This perspective assumes relatively stable access to strategic assets from which capabilities can be systematically developed (Bromiley & Rau 2016). However, these assumptions rarely hold in resource-constrained environments where scarcity of capital, materials, technology and infrastructure persists (Hyvärinen et al. 2020). Under such conditions, capabilities cannot emerge solely through resource accumulation, challenging traditional RBV logic (Randall 2021; Shen & Chen 2025).

Recent research proposes a scarcity-oriented reinterpretation of RBV that views scarcity as a catalyst for capability development rather than merely a constraint (Randall 2021). Firms operating in constrained environments actively reinterpret, reuse and recombine limited resources to develop strategic capabilities (Shen & Chen 2025; Williams et al. 2021). Through such recombination processes, organisations can develop circular capabilities, including reverse logistics, material recovery and sustainable resource flows, even without abundant inputs (Farooque et al. 2022; Pellegrino et al. 2026). This perspective shifts the analytical focus from resource possession to resource transformation and recombination, thereby extending RBV beyond its conventional boundaries.

Building on this scarcity-oriented RBV framework, this study identifies three internal mechanisms that enable firms to transform structural resource scarcity into effective CSC practices: MC, OPC and RAD. Managerial commitment reframes the strategic value of residual resources and encourages employees to view scarcity as a strategic opportunity (Kirchherr et al. 2023; Montag 2023). Operational process capability enables firms to redesign supply chain routines that support flexible reverse logistics and adaptive recycling practices (Pellegrino et al. 2026). Resource allocation discipline ensures that limited financial, material and human resources are directed toward initiatives with the greatest sustainability impact (Alam & Ullah 2025; Bromiley & Rau 2016).

Although studies generally report positive links between internal capabilities and CSC implementation, the strength and consistency of these relationships remain contested. Managerial commitment may be insufficient where institutional support is weak (Hyvärinen et al. 2020), while operational flexibility can improve efficiency but increase costs and coordination complexity (Petropoulos et al. 2026). Disciplined resource allocation may enhance sustainability but also suppress experimentation and innovation (Williams et al. 2021). These inconsistencies suggest that internal mechanisms do not operate in a linear way and may depend on contextual factors such as scarcity intensity and institutional alignment:

The conceptual framework explains how MC, OPC and RAD (independent variables) influence the implementation of CSC practices (dependent variable) in mineral water companies operating under resource constraints. Grounded in the RBV, the framework suggests that firms can develop strategic capabilities through the efficient utilisation and recombination of limited resources. These internal organisational factors enable firms to adopt CSC practices such as recycling, reverse logistics and material recovery. Government policy acts as a moderating variable that can strengthen or weaken the relationship between the internal factors and CSC implementation (see Figure 1).

This section presents the empirical findings of the study, beginning with the assessment of the measurement model and followed by the structural model evaluation. The analysis examines the reliability, validity and predictive power of the constructs, as well as the hypothesised relationships between internal organisational factors, government policy and CSC implementation. Additionally, considerations of unobserved heterogeneity and endogeneity are addressed to ensure the robustness and credibility of the results.

This study demonstrates that CSC implementation in resource-constrained contexts is primarily driven by internal organisational mechanisms, with government policy acting as a contextual moderator that can enable or constrain capability deployment. Findings challenge the assumption that institutional pressure alone drives sustainability adoption, emphasising that internal capability recombination under scarcity is central to circular transformation. Theoretically, the study extends resource-based and dynamic capability perspectives by showing that scarcity can stimulate innovation, and advances institutional theory by highlighting the contingent role of policy. Practically, the results underscore the importance of strengthening internal capacities and designing flexible regulatory frameworks to support sustainable supply chain transitions in resource-limited settings.