Enacting Sustainability Through Organizational Routines: A Grounded Theory of Capability–Institution Co-Structuring

Abstract

In institutional environments characterized by ambiguity and contestation, the formation of sustainability capabilities poses significant interpretive and organizational challenges. Existing perspectives often assume clear mandates, strategic intent, and rational agency, yet such assumptions rarely hold in transitional or weakly institutionalized settings. This study adopts a constructivist grounded theory (CGT) approach to examine how sustainability-related routines emerge, stabilize, and contribute to capability formation under conditions of institutional complexity. Drawing from multiple organizational cases across East Asian contexts, this study identifies three interdependent categories of routines, including sensemaking, stabilization, and coordination, that interact recursively to generate sustainability capabilities. These routines function not as linear processes or technical tools, but as dynamic infrastructures of interpretation, consolidation, and alignment. Their recursive interplay enables organizations to translate ambiguous sustainability signals into patterned practices and symbolic legitimacy over time. We consolidate these insights into a mid-range theoretical framework, the Routines-as-Practice Configuration for Sustainability Structuring (RAPCSS). The RAPCSS explains how sustainability is not merely implemented but enacted and continually remade through situated, performative routines. By bridging strategic and practice-based perspectives, this study contributes to sustainability theory by theorizing capabilities as emergent configurations shaped through recursive routine work. This offers a situated, processual, and reflexive account of how sustainability unfolds under conditions of institutional ambiguity.

1. Introduction

Sustainability has become a central organizing principle across sectors, yet its institutional meanings and organizational enactments remain far from settled. In many organizational contexts, particularly in regions undergoing regulatory transitions or grappling with overlapping governance logics, sustainability is not implemented through clear mandates but is performed through ongoing negotiation, adaptation, and symbolic mediation. While extant literature has made significant advances in theorizing sustainability capabilities through strategic, resource-based, and institutional lenses [1,2], these perspectives often rest on the assumptions of institutional clarity and strategic coherence. In contrast, organizations in transitional governance environments routinely face ambiguous expectations, fragmented normative frames, and competing stakeholder pressures that complicate the development of sustainability-related capabilities.

This study seeks to explore how sustainability capabilities emerge and stabilize under such institutional complexity. We are particularly interested in how organizational actors interpret ambiguous sustainability demands, translate them into operational meaning, and coordinate practices across diverse roles and systems. Prior research has addressed how capabilities are configured through resources, leadership, or structural mechanisms [2,3,4,5], but less is known about the everyday micro-processes through which sustainability becomes actionable and institutionalized. Moreover, while organizational routines have increasingly been theorized as dynamic, performative, and generative [6,7], their role in structuring sustainability capabilities remains underexplored, particularly under ambiguous institutional conditions.

These concerns led us to formulate the following research questions: (1) How do sustainability-related routines emerge, stabilize, and contribute to capability formation in organizational contexts marked by institutional ambiguity? (2) What organizational conditions and interpretive processes facilitate this routinization? And (3) how do these processes reflect and reshape the broader institutional landscape of sustainability governance?

To address these gaps, this study adopts a constructivist grounded theory (CGT) approach to investigate how sustainability-related routines emerge, evolve, and contribute to capability formation in practice. Drawing from case data across multiple industries in East Asia, we identify three core categories of organizational routines, including sensemaking, stabilization, and coordination, as the micro-foundations through which sustainability is enacted. These routines do not operate in isolation but interact recursively, shaping and reshaping the organizational response to shifting sustainability expectations.

From these findings, we develop a mid-range theoretical framework, inductively constructed through a CGT process, named the Routines-as-Practice Configuration for Sustainability Structuring (RAPCSS). This framework explains how sustainability capabilities are formed through the recursive interplay of interpretive, procedural, and symbolic routine work. The RAPCSS foregrounds sustainability not as a top-down strategic objective, but as a situated accomplishment constructed through patterning, reflexivity, and meaning-making in organizational life. It thus contributes to ongoing conversations at the intersection of capability theory, routine dynamics, and sustainability governance by reconceptualizing capability formation as a processual and recursive structuring phenomenon.

The remainder of this paper proceeds as follows. Section 2 reviews the literature on institutional ambiguity, sustainability capabilities, and routine dynamics, and identifies key conceptual gaps. Section 3 outlines the research design in the CGT approach. Section 4 presents the coding structure and development of key categories. Section 5 integrates the findings into the RAPCSS framework, elaborates on four theoretical propositions, and discusses its applicability. Section 6 concludes with theoretical contributions, practical implications, and avenues for future research.

2. Theoretical Foundations and Conceptual Gaps

2.1. Institutional Ambiguity in Transitional Governance Contexts

Institutional ambiguity has emerged as a critical but underexplored condition in sustainability research, particularly in non-Western or transitional governance environments. Unlike mature institutional contexts where regulatory expectations and normative frameworks are relatively stable, many emerging economies operate under fragmented, evolving, or competing institutional signals [8,9]. In such settings, sustainability is not a predefined mandate but a contested and negotiable domain, often shaped by overlapping logics, partial enforcement, and conflicting stakeholder interpretations.

In the East Asian context, for instance, rapid policy shifts, hybrid governance structures, and the coexistence of state-driven mandates with market-based expectations create an unstable institutional terrain [10]. Organizations must navigate not only regulatory uncertainty but also culturally embedded expectations, reputational pressures, and ambiguous definitions of what constitutes “sustainable conduct.” This results in a situation where sustainability is less about complying with explicit standards and more about interpreting diffuse signals across normative, cognitive, and regulative domains [11].

Existing studies on sustainability management often take for granted the institutional clarity under which organizational actions unfold. However, in transitional contexts, sustainability practices are frequently enacted under conditions of institutional multiplicity and temporal volatility [12]. These features complicate not only the implementation of sustainability but also the development of organizational routines that support sustainable capabilities over time.

The research is situated within these institutional complexities. Rather than assuming a singular logic or static regulatory backdrop, we are interested in how organizations respond to institutional ambiguity through situated, routine-based action. It is within this ambiguous and evolving terrain that we seek to understand how sustainability capabilities emerge, stabilize, and gain meaning in practice.

2.2. Sustainability Capabilities and the Limits of Strategic Perspectives

Over the past two decades, dynamic capabilities theory [3,5] has provided a dominant lens for examining how organizations respond to changing environments. In sustainability research, this perspective has shaped a growing body of work that frames sustainability capabilities as forms of strategic adaptation, emerging through resource reconfiguration, environmental sensing, and the alignment of innovation with long-term ecological or social objectives [1,2,4]. However, this line of thought tends to presuppose coherent strategic intent, legible institutional signals, and rational organizational agency. It often downplays the situated, interpretive, and routine-based processes through which sustainability practices actually take form.

A closer reading of this literature reveals several conceptual limitations. First, sustainability capabilities are typically defined in abstract, firm-level terms, with limited attention to how such capabilities are enacted in everyday organizational life. Second, many studies within this stream assume that sustainability is a clearly defined and strategically pursued objective, rather than a contested construct negotiated through practice. This assumption obscures the interpretive work required to define, legitimize, and institutionalize sustainability in contextually contingent ways. Third, these studies frequently overlook the micro-processes through which capabilities emerge, not only through deliberate planning or resource orchestration, but also through iterative behaviors, organizational routines, and informal enactments.

Recent extensions of the dynamic capabilities framework have begun to acknowledge these limitations. Correggi and colleagues, for instance, identify the need to incorporate sustainability more explicitly into dynamic capabilities theory but continues to categorize routines as operational-level structures, not as generative sources of meaning or institutional adaptation [2]. Other studies have offered empirical nuance: Mousavi and her colleagues’ study shows how routines mediate sustainable innovation by linking sensing and seizing processes [13]; Pluye’s research team identifies routinization as critical for long-term program sustainability [14]; and Frezza and White argue that sustainable workplace routines evolve through socio-material enactments and identity negotiation [15]. Despite these advances, the integration of routines into sustainability capability formation remains partial and under-theorized.

These conceptual and empirical gaps are particularly salient in transitional or weakly institutionalized environments, where strategic action unfolds amidst ambiguous expectations and contested legitimacy norms. In such settings, sustainability capabilities cannot be reduced to top-down initiatives or coherent strategic visions. Instead, they emerge through interaction, interpretation, and the gradual sedimentation of meaning within the flow of organizational routines.

This study does not reject the value of strategic perspectives, but it foregrounds what they often overlook. We focus on how sustainability capabilities are constituted not merely as strategic responses, but as situated accomplishments performed, stabilized, and reinterpreted through routine-based actions. This shift invites a closer examination of how sustainability becomes meaningful and durable in organizational practice.

2.3. Organizational Routines as Enacted Practice

Organizational routines have long been recognized as foundational elements of organizational behavior. Yet, the understanding of routines has evolved considerably over the past two decades. Rather than viewing routines as fixed procedures or behavioral scripts, contemporary scholarship has reconceptualized them as generative systems composed of both ostensive understandings and performative enactments [6]. This perspective shifts attention away from routines as stable, replicable structures toward routines as dynamic sites of agency, meaning-making, and situated adaptation.

Recent contributions enrich this view by contrasting the capabilities lens, which emphasizes what routines are, with a practice-oriented lens that shows how routines evolve through situated interactions. Parmigiani and Howard-Grenville compare the capabilities perspective with a practice perspective that highlights how routines evolve through enacted patterns and situated interactions [16]. This enriches our understanding of routines as interpretive, context-sensitive practices that contribute to innovation and adaptation.

Within this performative turn, routines are not simply patterns to be followed; they are continuously reinterpreted through actors’ interactions, embedded judgments, and unfolding institutional cues. Feldman and Pentland emphasize that routines are always “in the making,” shaped by the participants who perform them and by the meanings attached to those performances [6]. This framing foregrounds the semantic, symbolic, and contextual dimensions of routines, which are especially salient in sustainability settings where normative expectations are fluid and often contested.

Recent work further extends this view by examining how routines operate not only as containers of habitual action but also as loci of negotiation, learning, and adaptation [7,17,18,19]. In organizational contexts marked by institutional ambiguity, routines may function as interpretive devices that help actors make sense of evolving sustainability discourses. They also enable the gradual embedding of new values and practices, rendering sustainability more “actionable” over time, even in the absence of formal mandates or standardized metrics. This dynamic is particularly evident in sustainability governance, where routines help reconcile conflicting logics and operationalize abstract goals [18].

Such a perspective opens a pathway to investigate how sustainability becomes embedded not through top-down change programs, but through the iterative improvisations and patterned adjustments that unfold across time and organizational settings. It also invites closer attention to the micro-level discursive and practical work through which sustainability routines are generated, legitimized, and transformed.

2.4. Theoretical Gaps and Positioning of This Study

While prior research has offered valuable insights into sustainability capabilities and organizational routines, a clear disjuncture remains in how these two streams are integrated. Much of the extant literature on sustainability capabilities remains anchored in strategic or resource-based paradigms that privilege top-down initiatives, clear objectives, and rational planning. These frameworks, while analytically robust, tend to abstract away from the micro-level enactments and discursive processes through which sustainability is interpreted and performed in real-world settings.

Simultaneously, the evolving literature on organizational routines has shifted toward more dynamic and performative understandings, emphasizing routines as sites of meaning-making, negotiation, and adaptation. However, the connection between these interpretive processes and the formation of sustainability capabilities remains under-theorized. Few studies have systematically explored how routine enactments in contexts of institutional ambiguity contribute to the emergence and stabilization of sustainability practices over time.

This study addresses these intersecting gaps by adopting a CGT approach to examine how sustainability-related routines are generated, sustained, and transformed within organizations. Rather than assuming that capabilities pre-exist or are deliberately designed, we explore how they are constructed through patterned behaviors, embedded judgments, and situated interpretations. This approach allows us to trace how sustainability becomes meaningful and actionable, not as an abstract strategy, but as a lived and evolving accomplishment shaped through everyday organizational activity.

In particular, we situate our inquiry within the institutional complexity faced by organizations in transitional governance environments, where sustainability expectations are fragmented, contested, or only partially institutionalized. In such settings, we argue that organizational routines play a pivotal role not only in stabilizing emerging practices but also in translating ambiguous norms into concrete actions. These processes are not linear or prescriptive, but recursive, negotiated, and context-sensitive.

By attending to how sustainability routines emerge in the interplay between institutional cues and organizational sensemaking, this study offers a grounded explanation of how sustainability capabilities are co-constructed. This positioning not only advances theoretical integration between routines and sustainability literature but also aligns with recent calls for practice-based approaches that attend to the everyday enactment of sustainability in organizational life.

3. Research Design

3.1. Methodological Foundations: Constructivist Grounded Theory

This study adopts CGT as the methodological foundation, guided by the interpretive goal of understanding how sustainability routines and capabilities co-emerge in organizational contexts marked by institutional ambiguity. CGT is particularly well-suited for inquiries into processes, meanings, and contextually contingent patterns of action. It enables the development of theoretical explanations grounded in the lived experiences of participants, without imposing predefined variables or assumptions [20].

Unlike objectivist grounded theory, which emphasizes coding as a neutral discovery tool, CGT acknowledges that data and theory are co-constructed through the interaction between researcher and participant [20,21]. As such, this approach is consistent with our interest in routine enactment as a meaning-making process that unfolds within complex institutional landscapes. We seek to trace how actors interpret sustainability demands, embed them into organizational practice, and stabilize them over time.

Rather than adopting positivist notions of triangulation, which emphasize cross-validation through methodological redundancy [20,22], we adopt a constructivist stance that prioritizes interpretive depth over breadth [23]. This approach centers on theoretical sufficiency, where the explanatory adequacy is grounded in the conceptual coherence and contextual resonance of emergent categories [20,23].

The research design follows the iterative and reflexive logic of CGT, comprising the following three key phases: (1) initial coding of raw interview transcripts, (2) focused coding to refine conceptual categories, and (3) theoretical integration through constant comparison, memo writing, and category development. At each stage, analytic decisions were guided by theoretical sensitivity and grounded in the language, patterns, and interpretations shared by participants.

In response to methodological transparency, we clarify that the data corpus consisted of 21 semi-structured interviews with senior sustainability managers from seven Taiwanese firms (see Appendix A 

Table A2. Interviews and Participants.

Interview Code	Position Title	Department Affiliation	Interview Duration (Minutes)
PT-01	Special Assistant	CEO Office	52
PT-02	Special Assistant	CEO Office	55
TD-03	Project Manager	ESG Office	48
TD-04	Senior Engineer	R&D	51
TD-05	HRM Specialist	Human Resources	53
UD-06	ESG Head	ESG Office	54
UD-07	ESG Specialist	ESG Office	56
CG-08	Special Assistant	Strategy Office	60
CG-09	CSR Program Lead	Public Affairs	59
CG-10	CSR Program Officer	Public Affairs	55
TE-11	CSR Head	CSR Affairs	52
TE-12	CSR Officer	CSR Affairs	61
CS-13	ESG Committee Chair	ESG Office	60
CS-14	HRM Specialist	HR Department	58
ZU-15	Company Head	N/A	63
ZU-16	Company Head	N/A	55
ZU-17	Special Assistant	N/A	57
UD-18	ESG Specialist	ESG Office	54
PT-19	Special Assistant	CEO Office	59
CG-20	CSR Program Officer	Public Affairs	52
TE-21	CSR Officer	CSR Affairs	48

Note: Interview codes were assigned based on the chronological order of sessions and consist of a company code (as listed in Table A1) and a serial number. Each company was interviewed at least twice; the second and subsequent interviews were not formal sessions but mainly served to validate previous accounts and clarify remaining questions. The Position Title and Department Affiliation presented here are anonymized approximations rather than official titles, in accordance with the confidentiality protocols and ethical standards of this study.

). These interviews were transcribed in full and coded in their original language to preserve semantic precision. The coding structure was not derived deductively, but emerged through recursive engagement with the transcripts, with early memos capturing interpretive tensions and category boundaries as they formed.

Moreover, we explicitly avoided importing external theoretical constructs during early coding. For example, although the literature on dynamic capabilities and institutional complexity informed our sensitizing concepts, no such labels were assigned to data during initial analysis. Instead, we employed in-vivo codes and gerunds (e.g., “translating external cues,” “negotiating expectations”) to foreground action and interpretation, in accordance with CGT’s emphasis on process and practice [24].

This methodological stance allows us to clarify the analytic trajectory through which the theoretical model was developed. By articulating how categories emerged from grounded patterns of organizational narration and interaction, this study offers a transparent and contextually grounded explanation of sustainability routine formation. The complete coding system and category architecture are detailed in Appendix A 

Table A4. Core Categories and Coding Structure.

Theoretical Category	Focused Code	Initial Codes
Sensemaking Routines for Sustainability Translation	Exploring and Adaptation	Environmental changes interpreting, emerging knowledge absorbing, existing knowledge updating, horizontal imitating, try-and-error adaptation
	Integration and Embedment	Cross-functional collaborating, knowledge sharing, resource reallocating, operational procedures (re)aligning, institutionalizing integration
	Experimentation and Innovation	Encouraging innovative thinking, conducting pilot projects, learning and delearning, exploring unmet market needs, emphasizing decision-making flexibility
	Reflection and Optimization	Conducting review and reflection, launching improvement initiatives, gathering feedback, implementing optimized strategies
Stabilization Routines for Institutional Feedback	Internalization of Experience	Disseminating practical cases, establishing mechanisms for experiential learning, codifying experiential knowledge, conducting internal evaluations and feedback
	Practice-Driven Institutionalization	Embedding sustainability values into operational norms, bottom-up institutionalization, cultivating employee participation to drive institutional change, strengthening internal communication, fostering multicultural inclusivity
	Dynamic Adjustment	Enhancing operational norms, adjusting performance metrics, reconfiguring employee training programs, encouraging anticipatory and adaptive behaviors
	Sustainability Momentum	Establishing mechanisms to circulate sustainability experiences, embedding sustainability values into narratives and shared meanings, reinforcing recurring behaviors for sustainability engagement, building infrastructures to support commitment
Coordination Routines for Capability Enactment	Organizational Culture	Maintaining transparent internal communication, tolerating risk and failure, embedding recognition and incentive practices, promoting opportunities for employee participation, cultivating rituals for knowledge sharing, fostering creative thinking culture
	Leadership Style	Facilitating open communication, inspiring commitment and energizing teams, support for experimentation and risk-taking, exercising foresight in decision-making, strategizing prioritization and discretionary authority
	Value Alignment	Aligning sustainability with brand values, articulating shared cultural principles, reinforcing mutual accountability, embedding ethical and social responsibility, drawing on sense of history and legacy

Note: This table presents the final coding structure derived through CGT. The initial codes were constructed from line-by-line analysis of semantic units within the interview data. Focused codes represent intermediate conceptual groupings, which were further consolidated into three overarching theoretical categories. These categories, including sensemaking, coordination, and stabilization routines, capture the recursive, situated, and processual nature of sustainability capability construction in organizations facing institutional ambiguity.

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3.2. Research Setting and Data Sources

This study investigates sustainability practices within large and mid-sized multinational companies headquartered in emerging Asian economies. These firms operate across diverse regulatory landscapes, with active branches in China, Vietnam, Indonesia, and Thailand. While their institutional environments are marked by uncertainty and hybrid governance [10], these conditions also create fertile ground for examining how sustainability capabilities are enacted through organizational routines and shaped by institutional ambiguity.

A theoretical sampling strategy guided the selection of firms based on their depth of sustainability engagement and the maturity of their implementation practices [20,25,26]. Initially, ten companies across five sectors, including manufacturing, technology, energy, biotechnology, and retail, were identified for their relevance. After conducting and analyzing a preliminary round of interviews, the final analytic focus was narrowed to seven firms that demonstrated both rich empirical insight and internal diversity of sustainability routines [27]. These seven firms differ in organizational structure, sectoral context, and regulatory exposure, thereby offering an analytically robust range of sustainability routines and institutional responses.

All seven companies have established ESG functions, ranging from formal sustainability departments to integrated CSR teams, and participate in international frameworks such as the Dow Jones Sustainability Index (DJSI), the Carbon Disclosure Project (CDP), or supplier audit systems. Annual revenues range from several million to several billion USD, allowing for a cross-sectional comparison of organizational scale and governance structure. The selected firms include both publicly listed corporations and private conglomerates, ensuring diversity in governance exposure and stakeholder accountability [27,28,29].

Three primary data sources were utilized in this study. First, 21 interviews were conducted with actors spanning organizational hierarchies, including ESG officers, HRM managers, and senior executives or company heads. Each interview lasted approximately one hour and focused on processes such as project initiation, routine modification, interdepartmental coordination, and experiential learning (See Appendix A 

Table A3. Interview Protocol.

Could you describe how your company initially began its sustainability efforts? What triggered your personal involvement in these sustainability-related projects or practices?

2. In the course of your participation in sustainability practices, have there been instances where existing routines had to be changed? Who typically initiated such changes? Could you provide an example?

3. In your view, how are successful sustainability practices usually communicated and adopted across departments? Have there been any particularly memorable cases of sharing or diffusion?

4. Have any of the sustainability practices or projects you participated in eventually become formalized into official policies or procedures?

5. Within your organization, how do leaders or supervisors typically approach sustainability implementation? Do they tend to encourage experimentation or prioritize stability?

Note: This study adopted a semi-structured interview approach to conduct in-depth interviews with participating firms.

for the interview protocol and Table A2 for detailed participant information). Second, internal documents were collected, including policy manuals, procedural guidelines, and ESG performance metrics. Third, corporate sustainability reports and publicly disclosed materials were used to contextualize and support the interpretive patterns emerging from the interviews. For research ethics and data transparency, details of ethical approval and informed consent procedures are provided in Section 3.4.

By integrating these data sources, this study constructs a semantically grounded and contextually situated analytical framework. This multi-perspective approach enables the examination of how sustainability capabilities are constructed through localized routines and subsequently feed back into formal institutional structures. Through this lens, this study explores the recursive dynamics between practice and structure. It reveals how organizational routines serve as both the site and medium for capability emergence under institutional complexity.

3.3. Data Analysis Procedures

Based on the CGT approach, the analysis of this study proceeded through an iterative, multi-stage coding process that balanced inductive sensitivity with conceptual abstraction. Drawing on Birks and Mills, and Charmaz, the analytic strategy combined constant comparison with a semantic-oriented reading of organizational discourse, aiming to reveal how sustainability capabilities are embedded and constructed through organizational routines [20,24].

The analytic process unfolded in three stages: initial coding, focused coding, and theoretical integration (see also the coding structure listed in Appendix A Table A4).

Initial Coding. In the first phase, interview transcripts were coded line-by-line using gerund-based labels (e.g., “conducting pilot projects,” “horizontal imitating,” “tolerating risk and failure”). This technique foregrounded action and process, in line with CGT’s emphasis on emergent practice. A total of 52 initial codes were generated, capturing actors’ adaptations to sustainability demands and their interaction with institutional ambiguity. During this stage, we prioritized in-vivo codes and participant expressions to preserve semantic integrity and avoid premature conceptual closure.

Focused Coding. In the second phase, the research team examined the relational structure of codes by clustering them into conceptual families based on shared purposes, processual logic, and interpretive stance. This led to the identification of 11 core categories, each of which represented a recurring pattern of organizational response to sustainability challenges. Throughout this process, coding decisions were documented in analytical memos that captured semantic tensions, category evolution, and theoretical hunches.

Theoretical Integration. In the final phase, the 11 categories were consolidated into three overarching theoretical dimensions: (1) sensemaking routines for sustainability translation, (2) coordination routines for capability enactment, and (3) stabilization routines for institutional feedback. These thematic dimensions provided the scaffolding for the theoretical propositions and the final co-structuring model. Cross-category relationships were iteratively refined through comparative analysis and reflective memo writing, allowing theoretical patterns to emerge from the interplay of meanings across categories.

To enhance analytic credibility, two additional strategies were adopted. First, blind-coding validation sessions were conducted with an external reviewer to assess category stability and naming consistency. Second, all category labels were subjected to semantic alignment checks against the original language of interview transcripts to ensure cultural and contextual appropriateness.

This analytic trajectory allowed for the construction of a processual and context-sensitive model of how sustainability capabilities emerge through organizational routines. The model reflects not only the semantic texture of field narratives but also the interpretive labor through which sustainability becomes operational within ambiguous institutional environments. This approach is consistent with the iterative, comparative logic that defines CGT and reflects its emphasis on interpretive rigor over mechanical saturation [20,23].

3.4. Researcher Reflexivity and Ethical Considerations

Guided by a constructivist epistemological stance, this study understands the researcher not as a neutral observer but as an interpretive co-participant in the construction of meaning [20,22]. Accordingly, reflexivity was embedded throughout the research process, from data collection to theoretical construction, as a way to examine how researcher assumptions, positionality, and disciplinary background may have shaped interpretive decisions.

The primary researcher has prior professional experience in corporate sustainability consultation and academic training in institutional theory and qualitative methods. This background informed the initial sensitizing concepts used in memo writing and contributed to theoretical sensitivity during analysis. However, care was taken to avoid imposing pre-existing categories or theoretical frames during early coding. All codes were grounded in participants’ own language and interactional accounts. Regular peer debriefing sessions and external audit reviews were conducted to interrogate emerging interpretations and surface implicit assumptions. These reflexive practices were not viewed as neutralizing subjectivity but as a way to render it visible, accountable, and dialogically engaged.

The above-mentioned reflexive and ethical practices were not merely procedural safeguards; they also formed part of the analytic posture of the research. They reinforced the constructivist commitment to honoring participants’ voices, preserving contextual specificity, and acknowledging the co-constructed nature of empirical knowledge. These practices align with CGT’s epistemological commitment to co-constructed knowledge and reinforce the methodological integrity of this study.

3.5. Trustworthiness and Quality Criteria

This study adopts a trustworthiness framework that is consistent with the constructivist paradigm of qualitative research. Rather than relying on positivist criteria such as validity or replicability, trustworthiness in this context is evaluated through credibility, transferability, dependability, and reflexive confirmability [30].

Credibility was achieved through prolonged engagement with the data, iterative memo writing, and regular peer debriefing. By grounding each category in participant language and meaning, the analysis prioritized semantic integrity and remained open to emergent interpretations. The coding structure (see Appendix A Table A4) reflects this transparency, showing how categories developed through comparative analysis rather than theoretical imposition.

Transferability was addressed by providing thick contextual descriptions of each organizational setting. As described in Section 3.2, firms were selected across different industries and governance types to enable analytical generalization across multiple sustainability conditions. While this study does not claim statistical generalizability, it enables readers to assess the applicability of findings to analogous contexts.

Dependability was ensured through systematic documentation of coding decisions, including analytical memos, audit trails, and regular cross-review within the research team. Focused codes and theoretical groupings were reviewed in multiple cycles to assess category coherence and alignment with participants’ situated narratives.

Confirmability, in constructivist terms, does not imply neutrality but rather acknowledges the co-construction of meaning between researcher and participant. Reflexivity was integrated throughout the research process, as detailed in Section 3.4, making explicit the researcher’s positionality and its role in shaping interpretive choices. Transparency about theoretical sensitivity and the evolution of category labels further reinforces analytic accountability.

In sum, the criteria applied in this study align with the epistemological commitments of CGT. Rather than evaluating quality through methodological replication or triangulation, the emphasis lies in honoring interpretive depth, contextual resonance, and analytic integrity [20,30].

4. Category Construction and Inter-Relational Logic

4.1. Analytical Framing

This chapter presents the analytical foundation of our grounded theory model by detailing the coding process and the development of key theoretical categories. Drawing on the CGT approach [20], we interpret the empirical data not merely as descriptive accounts but as situated performances through which organizational actors negotiate sustainability within institutional ambiguity. The chapter focuses on how initial codes were generated from empirical materials, how they were clustered into focused concepts, and how these concepts were subsequently abstracted into three interrelated theoretical categories.

Our analytical process followed an iterative sequence involving open-ended interpretation, constant comparison, and theoretical sensitivity to context [20]. Special emphasis was placed on the semantic nuances embedded in action statements, reflective accounts, and sensemaking expressions articulated by participants. The CGT orientation adopted here prioritizes the co-construction of meaning between researchers and participants, and underscores the influence of institutional, cultural, and interactional contexts in shaping organizational routines.

To enhance analytical transparency, we structured our coding process around a “condition–action–result” (C-A-R) logic [25]. This framework allowed us to trace how organizational actors respond to misalignments, ambiguities, and tensions by performing routines that are both improvised and sedimented over time. The resulting codes thus represent not just thematic labels, but embedded interpretations of how sustainability is enacted, negotiated, and stabilized through micro-level practices. The three core theoretical categories developed from this analysis serve as the foundation for the mid-range theorization in the following chapter.

4.2. Coding Process and Category Development

4.2.1. Initial Coding: Extracting Action-Oriented Meaning from Raw Statements

The initial coding phase entailed a meticulous, line-by-line analysis of interview transcripts to extract action-oriented fragments embedded in participants’ narratives. Particular attention was paid to semantic cues, with researchers drawing on secondary data from the participating firms and contextual background obtained during interviews. This process enabled a nuanced understanding of how organizational actors interpreted, adapted, or disrupted sustainability-related routines within real-life settings.

Verbatim excerpts were preserved to retain the original voice and idiomatic richness of participants’ expressions. In-vivo codes were applied wherever possible to reflect localized meanings, particularly when participants used culturally specific or sector-sensitive language to articulate institutional contradictions or micro-practices [20]. These initial codes served as analytic footholds for accessing the situated logic of sensemaking and routine enactment.

Rather than applying predefined theoretical categories, the initial coding process remained grounded in empirical fluidity and interpretive sensitivity. It emphasized the emergence of meaning through practice, while remaining attuned to subtle cues embedded in language, interaction, and organizational context. Please refer to Appendix A 

Table A5. C-A-R Structured Coding with Representative Raw Data.

Focused Code	Initial Code	Raw Data	Condition	Action	Result
Experimentation and Innovation	Conducting pilot projects	We usually run a small pilot to see how people respond before making it part of the official process.	Uncertainty in how employees will react to new processes	Conducting pilot projects to test acceptance	Customized routines emerge based on employee responses
Internalization of Experience	Codifying experiential knowledge	We have recently turned cases into training materials that are now required for all new employees.	Need to formalize experiential knowledge for new employee onboarding	Turning past cases into manuals and training guides	Experiential knowledge becomes part of institutional learning systems
Exploring and Adaptation	Horizontal imitating	Sometimes we just look at what other plants do, and if it makes sense, we adopt it directly.	Lack of internal precedent or knowledge on sustainable procedures	Borrowing proven methods from peer factories	Cross-unit learning improves sustainability adaptation speed
Reflection and Optimization	Conducting review and reflection	Our manager encourages us to share failure cases; we hold meetings to discuss them without punishment.	Ambiguity around acceptable failure in sustainability practices	Creating open spaces to share failed experiences	Improved adaptive capacity and organizational learning
Dynamic Adjustment	Enhancing operational norms	We sometimes revise the standard operating procedures to match what actually works on the ground.	Gap between formal SOPs and practical frontline needs	Adjusting institutional procedures based on on-site experience	Formal processes reflect local practice realities
Integration and Embedment	Cross-functional collaborating	We now have a co-creation platform across departments to discuss sustainability proposals together.	Sustainability solutions require multi-department input	Launching cross-unit collaborative platforms	Greater integration across units for sustainable innovation
Practice-Driven Institutionalization	Bottom-up institutionalization	The process actually started in our department and later got adopted officially by headquarters.	New routines proven effective at the local level	Promoting grassroots-developed processes to the institutional level	Bottom-up practices become formalized routines
Value Alignment	Aligning sustainability with brand values	We want sustainability to be part of our core brand values, not just a KPI.	Tension between KPI-driven and value-driven sustainability	Reframing sustainability as part of brand identity	Internal motivation and cultural alignment around sustainability
Leadership Style	Support for experimentation and risk-taking	Our managers not only provide resources but also allow mistakes in experiments, which is crucial.	Uncertainty about top-down support for experimentation	Leaders allowing room for error and backing innovation	Higher psychological safety and willingness to innovate
Sustainability Momentum	Reinforcing recurring behaviors for sustainability engagement	At first, we only wanted to patch the process. But over time, every meeting changed how we understood the logic behind that sustainability metric…, it became part of our new rule.	Gradual reinterpretation of sustainability logic during recurring meetings	Incorporating revised understanding into formalized rules	Sustainability practices become routinized and embedded in organizational procedures
Organizational Culture	Tolerating risk and failure	It is quite normal to revise procedures during meetings… Rather than strictly following SOPs, it is better to adjust and report afterwards.	Procedural ambiguity and openness to frontline judgment	Allowing real-time procedural adjustments without penalty	Emergent flexibility in routines and reinforcement of adaptive norms

for the representative raw data and initial codes.

4.2.2. Focused Coding: Conceptual Consolidation and Structural Clustering

To further distill interpretive logics embedded in participant narratives, the research advanced to the focused coding phase. At this stage, initial codes exhibiting cross-contextual resonance, theoretical extensibility, and recurrent presence were consolidated into higher-level conceptual codes. The analytical strategy was guided by a C–A–R logic, in which each focused code was derived by systematically examining (1) the condition that triggered the routine, (2) the concrete action performed by organizational actors, and (3) the resultant outcome or implication for sustainability practice [25].

This C–A–R structure offered a robust analytical lens to trace how patterned responses emerged in the face of institutional misalignments and semantic frictions. Through iterative comparison and engagement with contextual sensitivity, the research team identified eleven focused codes that capture core micro-practices of sustainability enactment under institutional ambiguity. These include Exploring and Adaptation, Integration and Reconfiguration, Experimentation and Innovation, Reflection and Optimization, Internalization of Experience, Practice-Driven Institutionalization, Dynamic Adjustment, Sustainability Momentum, Organizational Culture, Leadership Style, Value Alignment.

Each focused code encapsulates a strategic response developed by organizational participants to navigate tensions between formal institutional frameworks and the situated demands of practice. Together, they represent the micro-level logics of routine enactment through which sustainability capabilities were progressively shaped and expressed under conditions of institutional complexity.

A complete C–A–R mapping of these eleven focused codes, along with their corresponding initial codes and representative empirical expressions, is presented in Appendix A Table A5. This table serves as the analytical bridge for the subsequent development of theoretical categories.

4.2.3. Theoretical Category Development

Building on the focused codes derived through the C–A–R framework, the third analytical layer involved elevating these codes into higher-order theoretical categories. This abstraction was not merely a process of thematic clustering but a reflective interpretation of how micro-practices coalesced into generative logics that shaped the enactment and stabilization of sustainability capabilities.

Three core theoretical categories emerged through iterative comparison across cases and repeated engagement with empirical material: (1) Sensemaking Routines for Sustainability Translation, (2) Stabilization Routines for Institutional Feedback, and (3) Coordination Routines for Capability Enactment. These categories were constructed as second-order abstractions from clusters of focused codes, each reflecting a distinct dimension of sustainability practice under institutional complexity, as follows:

• Sensemaking Routines for Sustainability Translation capture how actors reinterpreted ambiguous sustainability directives into locally meaningful actions. This category includes institutional tempo adjustment, semantic resource translation, role bridging operations, and knowledge recoding, all reflecting adaptive efforts to align meanings, rhythms, and roles with situated operational realities.
• Stabilization Routines for Institutional Feedback denote how emergent practices were formalized and recursively integrated into organizational structures. Focused codes such as tool-interface adaptation, experiential translation, and practice-driven institutionalization illustrate how provisional responses evolved into recognizable formal routines.
• Coordination Routines for Capability Enactment reflect enabling conditions that mobilize actors and resources around sustainability goals. This category includes boundary coordination and balancing standardization and exceptions, highlighting informal mechanisms that foster sustained collective engagement and flexibility.

The development of these categories followed a dynamic abductive process, in which the research team traced patterned relationships among conditions, actions, and consequences, while remaining sensitive to the linguistic, cultural, and operational nuances embedded in the data. For instance, actions such as horizontal imitation, sharing of failure cases, or codifying experiential knowledge were not merely practical adjustments, but vehicles for interpretive adaptation through which sustainability meanings were negotiated and reframed.

Rather than treating categories as stable typologies, this study conceives them as evolving configurations of practice shaped by contextual constraints and institutional tensions. These categories do not stand in isolation; they interact and mutually reinforce one another across time and settings, as will be elaborated in the next section. Appendix A Table A4 and Table A5 provide an overview of the three theoretical categories, their defining focused codes, and representative empirical indicators.

4.3. Interrelationship of Theoretical Categories

While the three theoretical categories were analytically delineated for clarity, our data show that they rarely functioned in isolation. Instead, they operated as mutually reinforcing mechanisms that collectively shaped how sustainability capabilities were enacted and stabilized amid institutional ambiguity.

At the entry point, sensemaking routines enabled organizational actors to interpret abstract sustainability expectations, navigate normative tensions, and reframe them into contextually meaningful constructs. These routines often initiated localized experimentation and symbolic negotiation, thereby laying the groundwork for actionable sustainability practices.

The emergent practices generated through sensemaking were subsequently subject to stabilization routines, which served to formalize effective adaptations and integrate them into organizational memory. Rather than enforcing rigid procedural compliance, these routines sedimented experiential learning and aligned expectations across actors, without undermining situational flexibility.

Coordination routines functioned as a connective infrastructure, synchronizing distributed actors, bridging conflicting logics, and mobilizing resources to support both translation and consolidation. Beyond mere communication, these routines shaped the affective and normative environment that made collective sustainability engagement feasible and resilient.

Through iterative interplay, the three routine types formed a recursive and generative cycle: sensemaking produced novel interpretations; stabilization conferred durability and institutional anchoring; and coordination enabled collective enactment across functional and hierarchical divides. This process was not linear but recursive, marked by feedback loops across organizational levels and temporal stages.

In confronting the ambiguity surrounding sustainability governance, a firm’s co-structuring of these routine types illustrates that capability development is not merely about acquiring new resources or skills. Instead, it emerges through patterned, situated practices that mediate between institutional complexity and operational action. This embedded dynamic forms the conceptual foundation for the mid-range theorization advanced in the next chapter.

5. Towards the Routines-As-Practice Configuration for Sustainability Structuring

5.1. Configuring Sustainability Capabilities Through Routine Interplay Under Institutional Ambiguity

The theoretical categories developed in the previous chapter do not function in isolation. Instead, they constitute a dynamic and recursive configuration of routine interplay that mediates between institutional ambiguity and the development of sustainability capabilities. While the previous section presented how organizational actors enacted sensemaking, stabilization, and coordination routines in response to ambiguous sustainability demands, in this chapter, we advance the analysis by integrating those empirical insights into a mid-range theoretical framework.

We conceptualize this routine configuration as a structuring mechanism that is provisional in nature yet generative in function, enabling organizations to translate uncertain institutional pressures into patterned practices. This mechanism does not merely describe what organizations do but illustrates how routinized actions evolve into capability-building processes. Under such institutional complexity, organizations must continuously reconfigure routines to respond to shifting sustainability expectations, competing stakeholder logics, and localized contingencies.

As illustrated in Figure 1, the interaction among the three types of routines forms a recursive cycle of adaptation and reinforcement. Sensemaking routines initiate the process by allowing actors to interpret abstract sustainability imperatives and reframe them within familiar operational and cultural vocabularies. These routines often lead to experimentation, improvisation, and local adjustments that generate new meanings and actionable scripts.

Stabilization routines subsequently consolidate these emergent practices into more formalized procedures. Through codification, integration, and feedback processes, organizations begin to institutionalize what initially emerged as improvisation. These routines contribute to the sedimentation of new knowledge, which in turn serves as an input for broader organizational learning and alignment.

Coordination routines act as a connective layer that synchronizes these dynamic movements. By bridging fragmented roles, aligning priorities across levels, and enabling cross-functional communication, coordination routines stabilize the tensions between flexibility and structure. They ensure that sensemaking and stabilization efforts are not isolated pockets of innovation but become components of an organization-wide capability trajectory.

This recursive interplay between sensemaking, stabilization, and coordination routines constitutes the foundation for sustainability capability development in ambiguous contexts. It allows organizations to convert diffuse sustainability signals into grounded routines, navigate competing institutional logics, and respond adaptively to ongoing environmental and regulatory shifts.

In the next section, we advance this theoretical framework by developing a set of propositions that articulate the specific dynamics and conditions under which these routine interactions contribute to capability emergence. This routine-based framework offers a dynamic and practice-grounded explanation of how sustainability capabilities are recursively structured through organizational routines, rather than being imposed through top-down institutional templates.

5.2. Proposition Development: Articulating the Logic of Routine-Driven Capability Emergence

Building on the dynamic logic of contextual mediation introduced in the previous section, this chapter develops a series of theoretical propositions that articulate the interplay between routines and the emergence of sustainability capabilities under institutional complexity. We derive propositions through the relational logic of category interweaving, with a focus on how routines function as conditional triggers, recursive feedback mechanisms, and symbolic coordinators in complex organizational environments.

The propositions are grounded in empirical data and retain strong contextual traceability. Each proposition emerges from observed practice patterns and reflects the embedded contingencies, transitional dynamics, and interpretive shifts observed in the field. In contrast to linear causal pathways, the propositions reflect a recursive logic of enactment, where actions both respond to and reshape the institutional context from which they arise.

Three analytical principles guide the development of the following propositions:

• Nonlinearity of action triggering: Organizational routines are rarely activated by single antecedents; rather, they arise from interlocking conditions and may in turn retroactively redefine their own enabling contexts.
• Feedback-driven contextual reframing: Each enacted routine generates interpretive residues that alter the actor’s subsequent sensemaking and institutional expectations.
• Collaborative rhythm formation: Through symbolic alignment, semantic coupling, and role synchronization, actors produce situated yet provisional coordination logics that sustain sustainability practices.

Accordingly, the following sections present three propositions, each corresponding to a pairwise interplay of the core theoretical categories, including sensemaking, stabilization, and coordination. Each cluster is introduced with a framing paragraph that explicates the underlying relational logic, followed by empirically grounded propositions supported by illustrative quotes. The chapter concludes with an integrative proposition that synthesizes the systemic function of these routines into a mid-range theory of sustainability capability structuring.

5.2.1. Translating Ambiguity into Situated Practice: Sensemaking Routines and Exploratory Adaptation

In the early phase of responding to sustainability pressures, organizations rarely encounter clear, prescriptive mandates. Instead, they face ambiguous institutional expectations, symbolic demands, and sometimes competing stakeholder rationales. Under such conditions, sensemaking routines become the first line of interpretive and adaptive response. These routines do not simply decode external signals; they enable organizational actors to translate institutional ambiguity into situated operational meaning through a combination of reflection, exploration, and knowledge recombination.

Sensemaking routines observed in our cases included symbolic reframing, horizontal imitation, reflective dialogue on failure, and pilot experimentation. These practices served as interpretive scaffolds that allowed sustainability goals to be made intelligible within local operational, cultural, and symbolic vocabularies. Through these routines, organizations explored potential interpretations, reframed institutional signals to resonate with internal norms, and gradually aligned collective understanding across hierarchical levels.

This recursive interpretive process suggests that the enactment of sustainability capabilities begins not with formal policy or strategic design, but with emergent meaning-making activities embedded in routine interactions. Drawing from these observations, we propose the following integrative proposition:

Proposition 1. 

Under conditions of institutional ambiguity, organizations initiate sensemaking routines, including exploratory actions, symbolic reframing, reflective knowledge sharing, and peer-based experimentation, to translate abstract sustainability expectations into context-sensitive practices and localized action scripts.

These dynamics were exemplified in the following narratives:

• “At first, we just piloted carbon footprint calculations at a few branches. Once it proved feasible, headquarters adopted it and asked other departments to follow the same method” (TE, conducting pilot projects as exploratory adaptation);
• “Sometimes we look at how other sites do it, if it makes sense, we adopt it directly.” (TD, horizontal imitation to reduce interpretive uncertainty); and
• “No one told us to change the process at that time, but we felt that using outdated data to complete the reports was not accurate. So we decided to revalidate the data checks internally.” (UD, self-initiated reflection and experimentation to address perceived misalignment with sustainability data integrity).

These sensemaking routines serve not merely as adaptive reactions but as generative mechanisms that produce the interpretive infrastructure for sustainability capabilities. By embedding reflection, experimenting, and semantic translation within micro-practices, they lay the groundwork for subsequent stabilization and coordination.

Their significance lies not only in immediate operational alignment but in enabling a sustained grammar of action through which ambiguity is rendered actionable. These routines thus form a foundational layer through which institutions are not merely complied with, but narratively reconstructed and experimentally enacted by organizational actors situated in ambiguous policy environments.

5.2.2. Stabilizing Emergent Practices Through Re-Coding and Institutional Feedback

Once initial sensemaking routines generate localized interpretations of sustainability imperatives, organizations must decide whether and how to stabilize these emergent practices. In this second phase, routinized actions begin to move from interpretive experimentation toward procedural consolidation. What was once provisional or exploratory gradually becomes sedimented through formalization, integration, and recursive feedback. This shift marks the transition from ambiguity translation to institutional alignment, reflecting a crucial step in capability structuring.

Stabilization routines function as organizational mechanisms that absorb experimental adaptations and reframe them into more durable operational templates. This process often involves formal SOP adjustments, documentation of best practices, and codification of experiential knowledge into manuals, metrics, or training modules. While these activities may appear administrative, they are vital in transforming individual or team-level improvisations into repeatable organizational routines that are recognized, shared, and evaluated.

These dynamics also reveal the recursive nature of institutional feedback. Rather than imposing routines top-down, stabilization involves a reflective loop in which bottom-up actions inform systemic updates, which in turn influence future sensemaking efforts. This interplay helps organizations align new routines with evolving institutional expectations, allowing for cumulative learning without rigid standardization.

Drawing from our empirical observations, we propose the following integrative proposition:

Proposition 2. 

When exploratory sustainability practices show operational viability or symbolic resonance, organizations employ stabilization routines, such as codification, procedural integration, and internal re-alignment, to formalize emergent solutions and reinforce institutional feedback loops.

This proposition is illustrated by the following examples:

• “Initially, we revised our sustainability indicators every year. But once things stabilized across departments, we documented everything into a manual for newcomers.” (CG, stabilization through codification after cross-departmental convergence);
• “Some routines started from pilot projects, and once the leadership saw their value, they asked us to integrate them into the ISO framework.” (PT, practice-based institutionalization through policy alignment);
• “That whole data reporting workflow was only integrated into our platform after our team got comfortable with it. Then, we asked IT to formalize it into a system rule.” (UD, progressive integration from informal adoption to formal rule-setting); and
• “We allowed one or two sites to trial the new reporting standards. After confirming feasibility, it was written into the official procedures.” (ZU, pilot-based validation and subsequent codification of sustainability reporting practices)

Through these routines, sustainability capabilities evolve from reflexive interpretation into systemic embedding. Beyond mere procedural documentation, stabilization reflects the organization’s effort to transform situated knowledge into scalable routines. This process reduces interpretive drift while preserving contextual adaptability. Importantly, stabilization does not occur in a linear sequence. Instead, it co-evolves with ongoing sensemaking, as each codified routine informs and is informed by subsequent interpretations.

In this light, stabilization is not the endpoint of adaptive learning. Rather, it is a recursive phase that consolidates and amplifies organizational knowledge. By embedding insights from earlier sensemaking into enduring operational structures, organizations institutionalize experiential learning while maintaining space for future adaptation. This dynamic forms the basis for coordination across roles, boundaries, and strategic levels.

5.2.3. Coordinating Across Interfaces: Routines for Relational Alignment and Organizational Cohesion

While sensemaking routines initiate interpretive adaptation and stabilization routines embed emergent practices into organizational infrastructure, these efforts may remain fragmented unless adequately coordinated. In environments characterized by institutional complexity and multi-level stakeholder demands, sustainability practices are seldom confined to a single function or role. Instead, they require cross-boundary alignment, value framing, and distributed orchestration. Coordination routines serve this integrative function by enabling synchronization across roles, departments, and decision-making layers.

Coordination routines observed in our cases included role bridging, symbolic alignment, and leadership framing. These mechanisms worked not only to reduce operational friction but also to cultivate shared meanings and legitimate commitments to sustainability goals. Importantly, coordination did not always emerge from formal structures; in many cases, it was informally negotiated through communicative work, value reinforcement, and the reconfiguration of task ownership. These practices helped maintain coherence across the organization without imposing rigidity.

Coordination routines also mediated tensions between competing logics, such as those between operational efficiency and symbolic compliance, or between global standards and local adaptations. By framing sustainability as a shared purpose rather than a top-down directive, organizational actors fostered a common narrative through which diverse functions could align their efforts. In doing so, coordination became a strategic routine, which did not merely distribute tasks but actively cultivated commitment, legitimacy, and psychological safety.

Drawing on these observations, we propose the following integrative proposition:

Proposition 3. 

When facing fragmented institutional signals and multi-level demands, organizations rely on coordination routines, including symbolic framing, boundary bridging, and leadership anchoring, to align distributed practices and reinforce collective sustainability trajectories.

The empirical basis for this proposition is reflected in the following statements:

• “We want sustainability not just for KPIs but to represent our core values.” (TE, value framing to align symbolic and operational agendas);
• “Sustainability for us is not just about KPIs, it is a form of responsibility to customers. That is why when we proposed changes to packaging, we used brand trust as our leverage.” (PT, value anchoring as persuasive framing);
• “Our CEO encourages people to share failure cases and treats them as learning moments. That makes us more willing to try things, knowing we will not be penalized.” (TD, leadership support for experimentation as psychological anchoring); and
• “Here, it is quite normal to revise procedures during meetings. Senior management supports this. Rather than strictly following SOPs, it is better to adjust and report afterwards.” (ZU, culturally supported procedural flexibility)

These coordination routines are neither ancillary nor reactive. Rather, they constitute a distinct capability that links sensemaking and stabilization processes into a coherent, recursive system. By fostering relational alignment, distributing interpretive labor, and reinforcing shared commitment, coordination routines expand the organization’s capacity to enact sustainability not as a discrete task but as a generative trajectory of integrated action.

In this recursive logic, coordination stabilizes the connective tissue that holds sustainability practices together. It translates isolated adaptations into systemic rhythms, allowing organizations to not only cope with complexity but to turn it into a platform for strategic engagement and collective meaning-making.

5.2.4. Recursive Reinforcement and Capability Embedding: The Dynamic Closure of Routine Interplay

As organizations navigate sustainability under institutional ambiguity, the interplay among sensemaking, stabilization, and coordination routines does not unfold in a linear progression. Instead, these routines interact recursively, forming a generative cycle that continuously refines how sustainability is enacted, routinized, and embedded within organizational systems. In this final proposition, we highlight how this recursive interplay creates conditions for sustainability capabilities to become durable, transferable, and strategically consequential.

Empirical patterns from our cases suggest that sensemaking routines initiate adaptive exploration, stabilization routines capture and formalize emergent learning, and coordination routines link disparate efforts across levels and functions. However, the development of sustainability capabilities depends on more than the sum of these parts. It is the dynamic feedback among these routines that sustains learning, enables revision, and institutionalizes meaning across time and context.

Notably, actions that emerge from sensemaking, such as pilot experimentation or symbolic reinterpretation, can become inputs for stabilization, but may also re-inform subsequent sensemaking if misaligned. Similarly, stabilization does not conclude a cycle but sets the stage for renewed coordination, particularly as new roles, resources, or performance metrics come into play. Coordination, in turn, mediates tensions and ensures continuity by anchoring routines in shared narratives, value structures, and leadership support.

These interactions suggest a recursive mechanism whereby sustainability is not achieved through single-point interventions, but through a dynamic closure that enables continuous recalibration and capacity building.

Proposition 4. 

Sustainability capabilities emerge from a recursive interplay among sensemaking, stabilization, and coordination routines, wherein each routine informs, modifies, and reinforces the others, creating an adaptive structure that embeds sustainability into evolving organizational practices and institutional environments.

This recursive logic was not merely theoretically inferred from prior propositions, but also empirically grounded in the following field insights:

• “After we piloted the new reporting workflow, it went through multiple revisions. Once it stabilized, we integrated it into the IT system, but even then, we kept refining it based on team feedback.” (UD, iterative refinement across routine stages);
• “Leadership encouraged flexibility at first, but as the practices became widespread, they formalized it into SOPs. Now, any changes require cross-department approval, which actually made our processes more resilient.” (CG, recursive shift from improvisation to routinized governance);
• “The way we talk about sustainability evolved with every project. At first, it was just about compliance. Now, it is part of how we plan strategies, thanks to all the feedback loops.” (PT, recursive reframing shaping strategic discourse); and
• “In our R&D process, … many sustainability standards and technical testing procedures were initially developed through team tacit knowledge and iterative coordination. Over time, we systematized them and incorporated them into formal documents. Once the process was stable and validated, we turned it into an internal operating regulation that everyone could follow.” (CS, recursive shift by experiential codification and graduate adaptation in response to institutional uncertainty)

These dynamics show that sustainability capability is not a fixed asset but a structured process of becoming, grounded in the routine enactment of interpretation, consolidation, and alignment. This recursive configuration forms the engine through which ambiguous mandates are rendered actionable, localized knowledge is scaled, and institutional structures are reoriented over time.

In the next section, we draw from these propositions to integrate a mid-range theory that conceptualizes this dynamic as a routine-based structuring mechanism of sustainability capabilities. This recursive closure of routine interactions substantiates the emergent and situated nature of sustainability capabilities, while offering a conceptual foundation for the mid-range theory developed in the next section.

5.3. Integrating a Routine-Based Mid-Range Theory of Sustainability Capability Structuring

Building on the four integrative propositions articulated above, this section consolidates our empirical findings into a mid-range theory of sustainability capability structuring. Rather than proposing a universal model or grand theory, we advance a practice-grounded framework that explains how sustainability capabilities are recursively developed through organizational routines under institutional complexity. This framework does not imply a fixed or sequential process, but rather a generative configuration in which routines evolve through mutual reinforcement, symbolic mediation, and adaptive recalibration.

We term this theoretical construct the Routines-as-Practice Configuration for Sustainability Structuring (RAPCSS). This configuration captures the recursive, performative, and situated nature of capability development as organizations navigate institutional ambiguity. It foregrounds organizational routines not as static repertoires of action but as dynamic infrastructures through which meanings are embedded, practices stabilized, and strategies aligned. The RAPCSS emphasizes how routines enable organizations to transform exploratory responses into durable practices and to synchronize distributed efforts through cultural coherence and symbolic anchoring.

At the core of this framework is the recognition that no single routine category, such as sensemaking, stabilization, or coordination, can sustain capability formation in isolation. Sensemaking routines provide interpretive flexibility, allowing actors to reframe ambiguous sustainability demands in operational terms. Stabilization routines consolidate these emerging practices, ensuring their durability and legitimacy. Coordination routines, in turn, align distributed practices, foster value congruence, and sustain collective momentum. However, each routine both shapes and is shaped by the others. Sensemaking without stabilization lacks continuity; stabilization without coordination risks fragmentation; coordination without new sensemaking may lead to ritualism.

Thus, the RAPCSS constitutes a recursive structuring loop—a dynamic mechanism through which organizations iteratively recalibrate, align, and institutionalize sustainability practices. This recursive logic is directional but not linear: sensemaking generates interpretive scripts that feed into stabilization; stabilization produces templates and norms that reorient coordination; coordination reshapes the symbolic and procedural ground for future sensemaking. Through this interplay, sustainability capabilities emerge not as pre-designed outcomes, but as evolving structures of patterned action.

The RAPCSS advances a mid-range theory that is both conceptually generative and empirically grounded. It articulates the following four defining features:

• Embedded processuality: Sustainability capabilities are not externally imposed but enacted through iterative, situated routines.
• Recursive adaptation: Routine categories inform, modify, and reinforce one another, enabling flexible yet coherent responses to shifting institutional conditions.
• Semantic-Material coupling: Sustainability practices are simultaneously symbolic and operational; their success depends on both institutional legitimacy and practical enactability.
• Institutional modulation: Organizations not only adapt to institutional complexity but actively shape and reconfigure it through routinized engagement and semantic framing.

This framework offers a critical alternative to dominant views of sustainability implementation as either a matter of top-down policy alignment or resource-based strategic design. Instead, it presents capability formation as a recursive, practice-based process grounded in organizational life. The RAPCSS that emerges through continuous enactment, revision, and institutional negotiation highlights how sustainability is performed, not prescribed.

Finally, three theoretical insights crystallize from the RAPCSS synthesis, as follows:

• Sustainability is continuously enacted, not merely implemented. Capabilities are generated through the stabilization of interpretive patterns rather than through plans or mandates.
• Routines function as generative and symbolic mechanisms. Beyond technical repetition, routines embed meanings, manage uncertainty, and legitimize new behaviors.
• Institutional complexity is a productive stimulus. Far from being a hindrance, complexity catalyzes routine interplay, prompting reflexivity and innovation in sustainability practices.

In sum, the RAPCSS contributes a robust mid-range theory of how sustainability capabilities take shape within the everyday work of organizations. It accounts for the situated, recursive, and interpretively rich processes by which organizations navigate and transform institutional ambiguity. This theory lays the conceptual foundation for the next chapter, where we examine its potential applicability and boundary conditions across varying organizational and institutional contexts.

5.4. Applicability and Boundary Conditions

The RAPCSS offers a situated yet transferable account of how sustainability capabilities emerge through the recursive interplay of organizational routines. As a mid-range theory grounded in practice yet abstracted from specific contexts, its analytical utility rests on its adaptability across varying institutional arrangements, organizational forms, and sectoral dynamics. This section discusses both the potential applicability and the conceptual boundary conditions of RAPCSS, clarifying the scope and limits of its generalizability.

5.4.1. Transferability to Other Institutional Contexts

RAPCSS was developed through cases situated in East Asian institutional environments, characterized by transitional governance, regulatory ambiguity, and culturally embedded coordination norms. While these features informed the observed routine dynamics, the underlying recursive logic, namely sensemaking, stabilization, and coordination, can extend to other settings where institutional expectations are complex, shifting, or contested. In particular, organizations in emerging economies, hybrid sectors (e.g., public–private partnerships), and industries undergoing sustainability transitions (e.g., energy, logistics, agri-tech) may find the RAPCSS framework relevant for navigating evolving sustainability imperatives.

However, the specific enactment of routines will vary. For instance, in highly regulated environments (e.g., European Union contexts), stabilization routines may dominate due to strong compliance pressures, whereas in loosely coupled institutional systems, sensemaking and coordination routines may play more prominent roles. The RAPCSS does not assume uniform sequence or weighting among routines; its value lies in mapping the recursive configuration that enables adaptive sustainability structuring under institutional ambiguity.

5.4.2. Organizational Types and Governance Structures

The RAPCSS is especially applicable to organizations characterized by decentralized decision-making, knowledge-intensive operations, and fluid role boundaries, as referred to conditions that allow routines to evolve through negotiation and situated interpretation. SMEs, social enterprises, and innovation-oriented firms may exhibit such traits, where sensemaking and coordination emerge organically through collective reflection and relational alignment. In contrast, highly hierarchical or mechanistically managed organizations may exhibit slower or more constrained routine interplay due to rigid procedural boundaries or symbolic dissonance between tiers.

Nonetheless, even in hierarchical settings, RAPCSS can illuminate the informal dynamics that underlie formal compliance efforts. For example, it reveals how top-down mandates are locally interpreted or how informal sensemaking often precedes codified sustainability procedures. Thus, the framework can be used not only to design sustainability strategies but also to diagnose bottlenecks in routine configuration.

5.4.3. Temporal and Strategic Conditions

RAPCSS is most analytically useful in periods of institutional transition, organizational restructuring, or sustainability agenda expansion. It offers a diagnostic lens for tracing how emergent capabilities are scaffolded, challenged, or reoriented through routine evolution. However, its applicability may diminish in contexts where sustainability practices have become fully routinized, symbolically uncontested, and procedurally standardized. In such cases, the recursive interplay gives way to routinized reproduction with limited interpretive variability.

Similarly, organizations adopting sustainability purely for compliance or reputational purposes may not exhibit the generative recursive logic proposed here. In such contexts, routines may be symbolic decouplings rather than capability-building mechanisms. The RAPCSS is thus best understood as an account of emergent structuring, rather than of post-stabilization routine maintenance.

5.4.4. Implications for Implementation and Strategic Design

From a practical standpoint, the RAPCSS encourages sustainability strategists, policy implementers, and organizational leaders to shift attention from output targets and KPIs to the routine processes through which meanings, behaviors, and alignments are produced. Rather than prescribing universal templates, the RAPCSS invites reflexive inquiry: Where is the organization in the recursive cycle? Are sensemaking routines suppressed or fragmented? Is codification premature? Are coordination mechanisms culturally and symbolically aligned?

By attending to these questions, RAPCSS can inform more context-sensitive sustainability implementation, enabling organizations to calibrate their routine systems to match institutional conditions, internal dynamics, and strategic intent.

6. Conclusions and Implications

6.1. Conclusions

This study set out to examine how sustainability-related routines emerge, stabilize, and contribute to capability formation in organizational contexts characterized by institutional ambiguity. Grounded in a CGT approach, we analyzed a diverse set of organizational cases to uncover a routine-as-practice framework through which sustainability is enacted, interpreted, and institutionalized.

In response to the first research question: how sustainability-related routines emerge, stabilize, and contribute to capability formation, we identified a recursive configuration of three interdependent routine categories: sensemaking, stabilization, and coordination. These routines do not operate in a linear sequence; instead, they interact dynamically to enable interpretive flexibility, consolidate emergent practices, and align distributed organizational efforts. Through their recursive interplay, these routines generate adaptive structures that support sustainability capability development over time.

Regarding the second research question: what organizational conditions and interpretive processes facilitate this routinization, our findings show that certain enabling conditions, such as leadership framing, symbolic alignment, procedural flexibility, and cultural support for experimentation, play critical roles. These conditions allow routines to evolve reflexively in response to institutional signals, actor interpretations, and practice-based learning. Interpretive processes such as reframing, horizontal imitation, and codification serve as key mechanisms that bridge abstract sustainability imperatives with situated operational meaning.

Finally, in answering the third research question: how these processes reflect and reshape the broader institutional landscape of sustainability governance, we found that routines are not merely tools of compliance or implementation. Rather, they serve as generative infrastructures through which organizations interpret institutional ambiguity, localize external mandates, and gradually reconfigure governance structures from the bottom up. The iterative nature of routinization contributes to a recursive structuring process that both responds to and alters the institutional environment, embedding sustainability into the organization’s symbolic and procedural core.

To consolidate these insights, we developed the RAPCSS as a mid-range theoretical configuration. The RAPCSS explains how sustainability capabilities are enacted through the recursive interplay of organizational routines, underpinned by symbolic mediation, contextual adaptation, and institutional reflexivity. The RAPCSS contributes to sustainability theory by illuminating how capabilities are not designed or imposed but formed through dynamic, practice-based structuring processes situated within real organizational life.

This conclusion affirms that routines are not static scripts but evolving infrastructures through which organizations construct sustainability, meaning, and action. Through this lens, the RAPCSS advances both an empirically grounded and conceptually generative account of sustainability capability formation under institutional complexity.

6.2. Theoretical Contributions

This study makes three primary theoretical contributions by integrating sustainability capability literature with a practice-based understanding of organizational routines under conditions of institutional ambiguity, regarding (1) the under-theorization of institutional ambiguity, (2) the strategic abstraction of sustainability capabilities, and (3) the limited integration between routine theory and sustainability enactment.

First, this study advances the theorization of institutional ambiguity as a generative condition for sustainability capability formation, rather than treating it as a contextual constraint or source of implementation failure. Prior research has acknowledged institutional complexity in transitional governance environments, e.g., [8,9], yet has rarely theorized how organizations respond to ambiguous, contested, or evolving sustainability expectations through routinized practice. By foregrounding organizational routines as interpretive infrastructures that shape and translate institutional signals into situated responses, our findings explain how organizations translate institutional uncertainty into situated meaning, thereby enacting sustainability as an ongoing process rather than a clearly defined mandate. The RAPCSS thus repositions institutional ambiguity, which is viewed not as a barrier to be overcome, but as a condition that catalyzes recursive sensemaking, symbolic negotiation, and procedural recalibration.

Second, this study reconceptualizes sustainability capabilities not as pre-defined strategic assets but as emergent configurations formed through recursive interactions among organizational routines. While much of the existing literature has approached sustainability capabilities through dynamic capabilities or resource-based perspectives [1,2,4,5], these frameworks often presume coherent strategic intent and overlook the micro-foundations of capability enactment, particularly the configurational dynamics through which capabilities are assembled and sustained. In contrast, the RAPCSS offers a mid-range explanation of how sustainability capabilities are constructed through the iterative interplay of sensemaking, stabilization, and coordination routines. These findings challenge the instrumental and output-oriented framing of capabilities by advancing a processual and reflexive account rooted in the mundane yet meaningful work of everyday organizational life. This contribution enriches the literature by theorizing how capabilities evolve not as static attributes but as structured patterns over time. They are embedded through narrative anchoring, symbolic legitimation, and procedural consolidation.

Third, this study extends practice-based routine theory by demonstrating how organizational routines operate as dynamic structuring devices for sustainability under institutional ambiguity. While recent scholarship has emphasized the generative and performative nature of routines [6,16,18], and emerging work has begun to explore their role in sustainability contexts [2,14,15], these insights into sustainability remain under-theorized and fragmentary. The RAPCSS advances this performative turn by illustrating how routines function as sites of reflexivity, learning, and coordination, thus enabling sustainability to be enacted not through top-down mandates but through patterned improvisation, interpretive framing, and recursive stabilization. Crucially, the framework underscores that Symbolic mediation and contextual adaptation are not peripheral to routinization; they are central mechanisms through which sustainability becomes legitimate, durable, and strategically embedded.

In summary, the RAPCSS contributes a contextual, recursive, and processual theory of sustainability capability structuring. It bridges two previously disconnected domains, including strategic capability literature and interpretive routine theory, and additionally offers a coherent, empirically grounded account of how sustainability is enacted through organizational practice. By reframing capabilities as structured outcomes of routine interplay under institutional complexity, this study provides a conceptual alternative to static, top-down, or outcome-centric models of sustainability implementation. Ultimately, the RAPCSS positions routines not merely as tools of coordination but as generative infrastructures through which strategic capabilities emerge, adapt, and endure within ambiguous institutional environments.

6.3. Practical Implications

The findings of this study offer several practical implications for organizations seeking to build sustainability capabilities in environments characterized by institutional complexity and ambiguous mandates. Rather than emphasizing universal best practices or compliance checklists, the RAPCSS framework draws attention to the micro-level routine processes through which sustainability becomes interpretable, actionable, and organizationally embedded. We highlight three major areas of implication: governance strategy, implementation design, and leadership orientation.

First, the RAPCSS invites sustainability strategists and policymakers to rethink implementation as a recursive, routine-based process rather than a linear cascade of mandates. Effective sustainability governance requires more than target-setting or policy articulation; it demands the cultivation of interpretive infrastructures through which actors can engage with ambiguous expectations, experiment with meaning, and iteratively align practices. This suggests that organizations should invest in cultivating internal spaces for dialogue, feedback, and symbolic articulation, such as reflective workshops, cross-departmental coordination platforms, or failure-sharing mechanisms, that support sensemaking and reinterpretation over time.

Second, the framework urges sustainability officers and organizational designers to attend not only to procedural codification but also to the timing and sequencing of routine development. Premature stabilization or overly rigid codification may truncate learning loops and generate symbolic detachment. Instead, implementation processes should be structured to allow for iterative prototyping, pilot-based refinement, and participatory evaluation before routinization is formalized. This enhances the adaptive quality of sustainability practices while anchoring them in contextual realities.

Third, the findings underscore the importance of leadership not simply as a source of authority or strategic vision, but as an enabler of psychological safety, semantic alignment, and procedural flexibility. Rather than a compliance burden, leaders who frame sustainability as a collective value help to legitimize experimental practices and reduce perceived risks associated with innovation. Moreover, leadership behaviors that reinforce narrative coherence and symbolic meaning can serve as coordination mechanisms that bridge fragmented roles and reconcile competing stakeholder logics.

In sum, the RAPCSS offers a reflexive lens through which practitioners can make sense of sustainability transitions within complex organizational fields. Rather than prescribing technical solutions or normative blueprints, it foregrounds the recursive work of interpretation, coordination, and symbolic integration as central to sustainability capability formation. From this perspective, strategic interventions should not only focus on what sustainability practices entail, but also attend to how such practices acquire meaning, legitimacy, and organizational traction through routine enactment.

6.4. Limitations and Future Outlook

While this study offers a theoretically grounded account of sustainability capability structuring through recursive routines, it is not without limitations. These limitations do not undermine the core findings, but rather delineate the contours of the current inquiry and suggest directions for future research.

First, this study’s empirical base is situated within East Asian organizational contexts characterized by transitional governance, evolving regulatory regimes, and culturally embedded coordination norms. While such conditions provide fertile ground for examining institutional ambiguity, they may also limit the generalizability of the findings. Although we clarified the regional institutional traits in Section 5.4, the diversity within East Asia was not fully unpacked, specifically the differences in areas or market coordination, legal enforceability, and governance hybridities among Taiwan, China, and Vietnam. Future research could conduct comparative analyses across these sub-regions or political economies to explore how varying institutional configurations, including cultural expectations and state–business relations, influence the structuring and routinization of sustainability practices.

Second, the methodological orientation of this study, grounded in CGT, privileges contextual sensitivity and theoretical depth. However, this emphasis comes at the cost of scope and sectoral representativeness. Although we included diverse sectors such as technology, manufacturing, and retail, we did not systematically compare industrial differences in routine structuring. Therefore, the transferability of the RAPCSS to different industrial contexts remains uncertain, particularly in cases where regulatory intensity, technological volatility, or stakeholder complexity differ significantly. Moreover, while we identified the framework’s diagnostic potential for sustainability implementation, we did not extend its use to the design of applied decision-support tools or structured interventions. Future research could build upon these findings to develop practical resources such as routinization diagnostics, capability-mapping templates, or coordination-readiness assessments to support organizational design and policy implementation.

Third, this study focuses on organizations that have already demonstrated at least partial engagement with sustainability practices. The dynamics of resistance, inertia, or symbolic decoupling, especially in organizations where sustainability is peripheral, performative, or externally imposed, deserve further exploration. Investigating the conditions under which routines fail to stabilize, or where routine interplay generates unintended consequences, may offer important counterpoints to the structuring logic theorized here.

Lastly, future work may extend the RAPCSS beyond the organizational level to examine how routine-based structuring dynamics scale into inter-organizational fields, public–private partnerships, or multi-level governance systems. As sustainability is increasingly constituted as a cross-sectoral concern, understanding how routines operate across boundaries will be critical, such as coordinating heterogeneous logics, negotiating meaning, and structuring shared capabilities.

In sum, while this study advances a novel and situated framework for understanding how sustainability capabilities are recursively structured through routine interactions, it also opens new avenues for theoretical refinement, empirical extension, and practical experimentation. These paths promise to deepen our understanding of how sustainability is not only strategized but lived; not merely implemented, but continually enacted and remade through the patterned actions of organizational life.