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ABSTRACT Firms increasingly pursue operational circularity to achieve sustainable growth amid volatile and uncertain business conditions. Although embracing a design for circularity strategy is recognized as important for enhancing operational outcomes, the mechanisms by which boundary‐spanning search influences circularity performance are not well explored. This study, rooted in the resource‐based view and dynamic capability view theories, investigates the effects of both proactive and reactive boundary‐spanning search on the circularity performance of firms, considering the mediating role of design for circularity and the moderating influence of artificial intelligence–powered analytics. Survey data from 196 manufacturing firms in India indicate that proactive boundary‐spanning search directly enhances circularity performance, and both forms of boundary‐spanning search positively affect design for circularity. Notably, design for circularity mediates the relationship between proactive search and performance. Artificial intelligence–powered analytics capabilities further strengthen the positive impact of proactive search on circularity outcomes. Conversely, several relationships were found to be nonsignificant: Reactive boundary‐spanning search showed no direct effect on circularity performance, and design for circularity did not significantly mediate the effects of reactive search. Additionally, artificial intelligence–powered analytics did not moderate the impact of reactive search nor did firm age, size, or sector significantly affect circularity outcomes. These findings illuminate the context‐dependent nature of implementing circular strategies and underscore that only certain combinations of search behaviors and analytics capabilities drive operational benefits. The results highlight the strategic value of artificial intelligence technologies and design for circularity in fostering sustainable manufacturing practices.
Sahoo et al. (Wed,) studied this question.