Strategic Adaptation and Environmental Dynamism: A Theoretical Model for Sustainable Strategy Implementation in Emerging Economies

Abstract

Firms in emerging economies face rapid shocks, technological turbulence, and policy volatility. Traditional implementation frameworks built for stable contexts offer limited guidance and rarely embed sustainability. This paper develops a theoretical model that explains how environmental dynamism can be converted into sustainable strategy implementation. The study synthesizes the resource based view, dynamic capabilities, institutional theory, and stakeholder and sustainability perspectives. An abductive approach defines constructs, specifies mechanisms, and advances nine testable propositions. The model conceptualizes environmental dynamism as a multidimensional catalyst that accelerates the evolution of sensing, seizing, and transforming capabilities. These capabilities interact with high velocity and broad scope adaptation processes to produce balanced economic, environmental, and social outcomes. Leadership agility, digital enablement, and adaptive culture shape capability formation. Institutional alignment and stakeholder governance condition legitimacy and resource access. Feedback loops generate virtuous or vicious cycles as outcomes reinforce or erode future capabilities. The model reframes resource value as contingent on reconfigurability, embeds stakeholder engagement within capability building, and places ESG at the core of implementation. It offers a diagnostic roadmap for capability investment and stakeholder orchestration, identifies policy levers that amplify firm adaptation, and sets a research agenda for longitudinal mixed methods tests.