Despite growing interest in circular business models as drivers of sustainability, empirical research has largely overlooked the intermediate organizational mechanisms through which circular business model deployment (CBMD) leads to sustainability performance (SP). Moreover, existing studies rarely examine serial mediation pathways that explain how organizational capabilities and practices sequentially enable sustainability outcomes. Accordingly, this study aims to investigate how CBMD enhances SP, with possible mediating effects of responsible leadership competency (RLC) and green orientation capability (GOC).
Building on the natural resource-based view (NRBV) and dynamic capabilities theory, the authors build and validate a conceptual model that tests both direct and indirect effects. Regression analysis was conducted using SPSS to examine survey responses from 238 managerial-level healthcare professionals across public and private sector organizations in the UAE.
The results show that CBMD positively influences SP both directly and indirectly through significant mediating effects of RLC and GOC, with a clear serial mediation pathway, where RLC plays a comparatively stronger mediating role than GOC in enhancing sustainability outcomes.
These findings extend the circular business model (CBM) – sustainability literature by unpacking the mechanisms through which CBMD translates into SP. Practically, organizations should prioritize leadership development and green capability building alongside circular strategies to ensure that sustainability initiatives translate into tangible performance outcomes.
To the best of the authors’ knowledge, this is the first study to offer an empirical insight on a set of relationships among CBMD, RLC, GOC and SP. The dual-theory approach is innovative and relevant in sustainability, leadership and organizational effectiveness research.
