Circular economy (CE) promises a pathway to decouple economic and environmentally sustainable growth. Therefore, it has gained the attention of both policymakers and companies around the world and across industries. For companies, a shift to CE offers competitive advantage, cost-savings, and engagement with key partners. Nevertheless, established companies struggle to implement CE business in practice and absorb its long-term implications, as CE requires a fundamental rethinking of extant business models, business strategies, and collaborations with other organizations. Hence, companies need to adopt a strategic viewpoint to manage the complex, overarching strategic development process of CE business. To date, research in the field of CE as a business paradigm has focused on operational and static issues in CE implementation but not on guiding established companies in developing circular business models and strategies. Such long-term processes call for inter-organizational collaboration, but the roles and timing of collaborations have been overlooked in CE business research and remain empirically underexplored. This work addresses the gap in company-centric yet collaborative CE implementation as a strategic consideration for established companies’ business by developing a lacked processual and pragmatically valuable strategic management framework, which is based on empiric cases of companies pioneering in CE business. Three research questions are addressed to holistically explore the strategic development of CE business: How can established companies (i) develop circular business strategies and (ii) innovate circular business models aligned with circular business strategy development? (iii) How can collaboration support established companies in their strategic development of CE business? To this end, this pragmatist-based research adopts a qualitative process approach to exploring multiple- and single-case study settings. Twelve cases of CE pioneer companies are sampled from environmentally burdensome industries in CE-driven institutional contexts in Finland and Italy. Rich data obtained from these companies, via interviews, documents, and other secondary data, are analyzed from an abductive approach and the findings are presented across four publications. The key findings are summarized as nine propositions and conceptualized as a process model that captures how circular business strategy, circular business model innovation, and collaboration for CE business dynamically intertwine and can be managed over time in the overarching process of proactive, even radical strategic development of CE business in established companies. The findings reveal that circular business strategy is developed over time through strategic cycles with varied focus areas and intertemporal decision-making. Environmentally burdensome temporal contexts demand it to take particularly proactive and radical forms, and it is implemented through circular business model innovation, which can comprise diverse interlinked innovations and evolve from diversifying to transforming the linear business. Spillovers to spin-off CE business opportunities can be managed under a CE-driven corporate strategy or as spin-off ventures. Collaboration plays an increasingly important role in enabling circular business models with identified managerial practices, in accelerating circular business strategy development with feedback for learning and radical change, and in aligning the ecosystem to the company’s CE vision through the development of industry, markets, and regulation. This dissertation makes several contributions to the literature on CE as a business paradigm. It highlights that the strategic development of CE business in established companies in environmentally burdensome contexts involves proactivity, radicality, systemic change, and temporal considerations. It fills a gap in the circular business strategy stream by defining circular business strategy development and conceptualizing its proactive type, which in turn paves the way for studying other emergent types of this process. It augments the research on circular business models with processual insights on temporality and radical innovation of circular business model undertaken as part of implementing a circular business strategy. Research on collaboration for CE business is enriched with new insights on how collaborations can be harnessed timely to pace and align the development in circular business strategies and in the business ecosystem. The findings inform managerial guidelines on what actions to take and when in established companies for surviving and proactively building long-term competitive advantage in disruptive CE transition across industries. Meanwhile, policymakers and other organizations are encouraged to engage—in a timely fashion and in diverse roles—with companies’ CE efforts to promote shared sustainability goals in the economy and society. This dissertation concludes by discussing the limitations and future research avenues that stem from the insights of this research.
L’economia circolare (EC) promette di combinare crescita economica e crescita sostenibile sotto il profilo ambientale, destando l’interesse sia dei governi che delle aziende in tutto il mondo e i settori industriali. La transizione a un modello aziendale di EC offre vantaggi competitivi, riduzione dei costi e coinvolgimento di partner chiave. Tuttavia, le aziende più affermate faticano ancora a implementare tale modello e a valutarne le conseguenze a lungo termine, in quanto l’EC necessita di un fondamentale ripensamento degli esistenti modelli aziendali, strategie di business e collaborazioni esterne. Pertanto, le aziende devono adottare una visione strategica per gestire la complessità del processo trasformazionale verso un modello di EC. La ricerca sull’EC come paradigma di business si è limitata finora all’implementazione operativa e statica di modelli aziendali di EC, non riuscendo a guidare le aziende affermate nel processo di sviluppo di modelli e strategie aziendali circolari a lungo termine. L’inevitabile collaborazione tra organizzazioni e il suo ruolo tempestivo nel favorire tali processi ha ricevuto poca attenzione empirica. Questa ricerca affronta le attuali lacune sull’implementazione dell’EC intra- e inter-aziendale in quanto strategica per i business affermati, che richiedono una struttura di gestione efficace dei processi, con valore pragmatico basato su casi di successo empirici. Per un’esplorazione olistica dello sviluppo strategico orientato al business circolare sono stati affrontati tre quesiti: In che modo le aziende affermate (i) sviluppano strategie di business circolari e (ii) innovano modelli di business circolari in linea con lo sviluppo di strategie di business circolari? (iii) In che modo la collaborazione aiuta le aziende affermate nel proprio sviluppo strategico verso un modello aziendale di EC? A tal fine, questa ricerca di carattere pragmatico adotta un processo qualitativo per esaminare casi studio multipli o singoli in quattro pubblicazioni. Dodici casi di aziende pilota in ambito di EC vengono campionati da settori industriali a elevato impatto ambientale in contesti istituzionali centrati sull’EC in Finlandia e in Italia. I relativi abbondanti dati basati su colloqui e documenti vengono analizzati secondo un approccio di orientamento prevalentemente abduttivo. I risultati chiave sono formulati in nove proposte e concettualizzati in un modello di processo che rivela come strategia di business circolare, innovazione nei modelli di business circolari e collaborazione finalizzata all’EC si intreccino dinamicamente e possano essere gestite nel tempo nel processo generale di sviluppo strategico proattivo e spesso radicale verso il modello di EC nelle aziende affermate. Ne risulta che la strategia aziendale circolare viene sviluppata nel tempo in cicli strategici in varie aree di interesse. In contesti temporali a elevato impatto ambientale, essa richiede una forma particolarmente proattiva e radicale e viene implementata tramite un nuovo modello aziendale circolare che può comprendere diverse innovazioni interconnesse ed evolvere dalla diversificazione alla trasformazione del business. Le risultanti aziende di EC derivate possono essere gestite con strategie aziendali fondate sull’EC o come spin-off. La collaborazione ha acquisito importanza nel tempo poiché favorisce il modello aziendale circolare con pratiche manageriali identificate, accelera l’apprendimento e il cambiamento radicale nello sviluppo di una strategia aziendale circolare tramite il feedback, e allinea l’ecosistema alla visione aziendale di EC tramite lo sviluppo di settori industriali, mercati e normative. Questa dissertazione contribuisce alle pubblicazioni sull’EC come paradigma aziendale, evidenziando le implicazioni strategiche dell’EC nello sviluppo delle aziende affermate in contesti a elevato impatto ambientale che richiedono proattività, cambiamento radicale e sistemico e valutazioni temporali. Riguardo al flusso di strategie aziendali circolari, viene proposta una definizione di sviluppo di una strategia aziendale circolare definendo tale processo in base al relativo tipo proattivo e ponendo le basi per studiare tipi alternativi emergenti. Il flusso dei modelli aziendali circolari viene ampliato con le analisi dei processi delle specifiche innovazioni radicali che sono parte della strategia aziendale circolare. La ricerca getta luce su come cambino i ruoli nelle collaborazioni finalizzate al modello aziendale di EC e come queste vengano prontamente gestite per sincronizzare lo sviluppo nell’ecosistema aziendale e circolare. I risultati danno forma a linee guida manageriali su quali azioni intraprendere, e quando, per sopravvivere e stabilire proattivamente un vantaggio competitivo a lungo termine nella dirompente transizione circolare dell’ecosistema industriale. Quanto prima, i governi e altre organizzazioni economiche e sociali sono invitate a impegnarsi con diversi ruoli e mezzi per favorire gli sforzi delle aziende nell’EC e promuovere obiettivi condivisi di sostenibilità. La ricerca si conclude con limiti e prospettive di esplorazione futura.
Strategic Development of Circular Economy Business in Established Companies: A process approach to business strategy, business model innovation, and collaboration
Kaipainen, Jenni
2023/2024
Abstract
Circular economy (CE) promises a pathway to decouple economic and environmentally sustainable growth. Therefore, it has gained the attention of both policymakers and companies around the world and across industries. For companies, a shift to CE offers competitive advantage, cost-savings, and engagement with key partners. Nevertheless, established companies struggle to implement CE business in practice and absorb its long-term implications, as CE requires a fundamental rethinking of extant business models, business strategies, and collaborations with other organizations. Hence, companies need to adopt a strategic viewpoint to manage the complex, overarching strategic development process of CE business. To date, research in the field of CE as a business paradigm has focused on operational and static issues in CE implementation but not on guiding established companies in developing circular business models and strategies. Such long-term processes call for inter-organizational collaboration, but the roles and timing of collaborations have been overlooked in CE business research and remain empirically underexplored. This work addresses the gap in company-centric yet collaborative CE implementation as a strategic consideration for established companies’ business by developing a lacked processual and pragmatically valuable strategic management framework, which is based on empiric cases of companies pioneering in CE business. Three research questions are addressed to holistically explore the strategic development of CE business: How can established companies (i) develop circular business strategies and (ii) innovate circular business models aligned with circular business strategy development? (iii) How can collaboration support established companies in their strategic development of CE business? To this end, this pragmatist-based research adopts a qualitative process approach to exploring multiple- and single-case study settings. Twelve cases of CE pioneer companies are sampled from environmentally burdensome industries in CE-driven institutional contexts in Finland and Italy. Rich data obtained from these companies, via interviews, documents, and other secondary data, are analyzed from an abductive approach and the findings are presented across four publications. The key findings are summarized as nine propositions and conceptualized as a process model that captures how circular business strategy, circular business model innovation, and collaboration for CE business dynamically intertwine and can be managed over time in the overarching process of proactive, even radical strategic development of CE business in established companies. The findings reveal that circular business strategy is developed over time through strategic cycles with varied focus areas and intertemporal decision-making. Environmentally burdensome temporal contexts demand it to take particularly proactive and radical forms, and it is implemented through circular business model innovation, which can comprise diverse interlinked innovations and evolve from diversifying to transforming the linear business. Spillovers to spin-off CE business opportunities can be managed under a CE-driven corporate strategy or as spin-off ventures. Collaboration plays an increasingly important role in enabling circular business models with identified managerial practices, in accelerating circular business strategy development with feedback for learning and radical change, and in aligning the ecosystem to the company’s CE vision through the development of industry, markets, and regulation. This dissertation makes several contributions to the literature on CE as a business paradigm. It highlights that the strategic development of CE business in established companies in environmentally burdensome contexts involves proactivity, radicality, systemic change, and temporal considerations. It fills a gap in the circular business strategy stream by defining circular business strategy development and conceptualizing its proactive type, which in turn paves the way for studying other emergent types of this process. It augments the research on circular business models with processual insights on temporality and radical innovation of circular business model undertaken as part of implementing a circular business strategy. Research on collaboration for CE business is enriched with new insights on how collaborations can be harnessed timely to pace and align the development in circular business strategies and in the business ecosystem. The findings inform managerial guidelines on what actions to take and when in established companies for surviving and proactively building long-term competitive advantage in disruptive CE transition across industries. Meanwhile, policymakers and other organizations are encouraged to engage—in a timely fashion and in diverse roles—with companies’ CE efforts to promote shared sustainability goals in the economy and society. This dissertation concludes by discussing the limitations and future research avenues that stem from the insights of this research.File | Dimensione | Formato | |
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https://hdl.handle.net/10589/216012