Victor Tiberius, Laura Stiller, Marina Dabić

• Family businesses strive not only for economic prosperity but also for social and environmental values and achievements. In an ever-changing business environment, dynamic capabilities are required to sustain performance across these areas. To understand these mechanisms in order to proactively manage them, it is necessary to identify their specific microfoundations and uncover how these relate to sustainability. However, research on sustainability dynamic capabilities in family businesses and their microfoundations is scarce. To address this research gap, we conducted semi-structured interviews with 11 German and Swiss family businesses from different industries of different ages and sizes. Our findings suggest that the majority of dynamic capability microfoundations relate to economic sustainability, with a specific focus on future orientation, traditional mindsets, rapid decision-making, intuition, speed, and resource slack. Further, we find the social aspects of innovative mindsets, human capital investments, and participation toFamily businesses strive not only for economic prosperity but also for social and environmental values and achievements. In an ever-changing business environment, dynamic capabilities are required to sustain performance across these areas. To understand these mechanisms in order to proactively manage them, it is necessary to identify their specific microfoundations and uncover how these relate to sustainability. However, research on sustainability dynamic capabilities in family businesses and their microfoundations is scarce. To address this research gap, we conducted semi-structured interviews with 11 German and Swiss family businesses from different industries of different ages and sizes. Our findings suggest that the majority of dynamic capability microfoundations relate to economic sustainability, with a specific focus on future orientation, traditional mindsets, rapid decision-making, intuition, speed, and resource slack. Further, we find the social aspects of innovative mindsets, human capital investments, and participation to be the specific microfoundations that strongly link with social and, eventually, economic sustainability. However, we did not find specific microfoundations for environmental sustainability.…