External resilience controls as sociotechnical governance: an extension of dynamic capabilities theory under externally driven volatility

Purpose This study examines how organizations construct governance responses to externally driven volatility by embedding external signals into control practices. Focusing on climate exposed agricultural firms, this study extends dynamic capabilities theory (DCT) by developing external resilience controls (ERCs) as a sociotechnical governance construct that illuminates how firms make volatility actionable through formal control routines. Design/methodology/approach Adopting a pragmatic constructivist design science orientation, this study combines six years of financial and operational context (2019–2024) with a longitudinal interpretive content analysis of annual report and sustainability disclosures (2022–2024) from five major agricultural firms. An interpretive design approach enables the systematic synthesis of disclosed organizational practices into a conceptual framework. Findings ERCs emerge as sociotechnical governance arrangements that translate external volatility into organizationally meaningful routines and actionable dynamic capabilities. These arrangements materialize through digital sensing infrastructures, traceability systems, scenario thresholds and board-level oversight that collectively shape how firms interpret and respond to climate anomalies, regulatory shifts and technological change. ERCs reveal resilience as an ongoing process of constructing, stabilizing and legitimizing responses to external volatility. Practical implications ERCs offer practitioners an analytic framework to operationalize dynamic capabilities by integrating digital tools and governance structures. They show how firms convert external volatility into actionable sensing, seizing and reconfiguring routines, enabling adaptive decision-making without relying on rigid control mechanisms. Originality/value This study advances qualitative management scholarship by conceptualizing ERCs as sociotechnical governance constructs. It contributes to strategy research by extending DCT, showing how dynamic capabilities are enacted through the interplay of digital infrastructures, institutional pressures, and organizational sensemaking.