Ethical Values as Dynamic Capabilities: A Mixed-Methods Analysis of Strategic Transformation in Japan’s Mature Industries

This study examines how ethical corporate philosophy operates as a dynamic capability that enables strategic transformation in mature industries. Focusing on Oji Holdings, Japan’s leading pulp and paper firm, and comparing seven major companies across pulp and paper and chemical sectors, we apply the Values-Driven Dynamic Capabilities (VDDC) framework to integrate qualitative evidence from corporate reports and ESG disclosures with quantitative panel data. We develop a digital indicator, Values_Count, using text-mining of integrated reports to capture the institutionalization of corporate values. Random-effects regressions with year fixed effects show a positive, marginally significant association between Values_Count and operating profit margin, controlling for environmental efficiency, globalization, and governance diversity. The findings indicate that ethical philosophy, when embedded in organizational routines, enhances sensing, seizing, and transforming processes. The study demonstrates that values function as economically meaningful microfoundations of competitiveness in mature industries.