Skip to main content

Circular Business Models: Some Theoretical Insights

  • Chapter
  • First Online:
Business Models in the Circular Economy

Abstract

This chapter starts laying the theoretical foundations of business model innovation in the context of the circular economy. Particularly, it deals with how the rationale for adopting circular business models can be explained drawing from the strategic management and neo-institutional theory literature. This chapter also discusses (a) the potential through which circular business models advance the theoretical framework, and (b) the extent to which the implications of circular business models are source of tensions for the theoretical framework used. It also identifies opportunities for future research.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

eBook
USD 16.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Hardcover Book
USD 69.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

References

  • Aguinis, H., & Glavas, A. (2012). What we know and don’t know about corporate social responsibility: A review and research agenda. Journal of Management, 38, 932–968.

    Article  Google Scholar 

  • Aldersgate Group. (2015). Resource efficient business models. The roadmap to resilience and prosperity. Retrieved August 2017, from http://www.aldersgategroup.org.uk/reports.

  • Amit, R., & Zott, C. (2001). Value creation in e-business. Strategic Management Journal, 22, 493–520.

    Article  Google Scholar 

  • Amores Salvadó, J., Martín de Castro, G., Navas López, J., & Delgado Verde, M. (2012). Environmental innovation and firm performance: A natural-resource-based-view. Basingstoke: Palgrave Macmillan.

    Google Scholar 

  • Antikainen, M., & Valkokari, K. (2016). A framework for sustainable circular business model innovation. Technology Innovation Management Review, 6, 5–12.

    Google Scholar 

  • Arend, R. (2013). The business model: Present and future-beyond a skeumorph. Strategic Organization, 11, 390–402.

    Article  Google Scholar 

  • Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120.

    Article  Google Scholar 

  • Barney, J., Ketchen, D., Jr., & Wright, M. (2011). The future of resource-based theory: Revitalization or decline? Journal of Management, 37, 1299–1315.

    Article  Google Scholar 

  • Basu, K., & Palazzo, G. (2008). Corporate social responsibility: A process model of sensemaking. Academy of Management Review, 33, 122–136.

    Article  Google Scholar 

  • Bertels, S., & Bowen, F. (2015). Taking stock, looking ahead: Editors’ introduction to the inaugural Organization & Environment review issue. Organization & Environment, 28, 3–7.

    Article  Google Scholar 

  • Blomsma, F., & Brennan., G. (2017). The emergence of circular economy: A new framing around prolonging resource productivity. Journal of Industrial Ecology‚ 21, 603–614. https://doi.org/10.1111/jiec.12603.

  • Bocken, N., de Pauw, I., Bakker, C., & van der Grinten, B. (2016). Product design and business model strategies for a circular economy. Journal of Industrial and Production Engineering, 33, 308–320.

    Article  Google Scholar 

  • Boxenbaum, E., & Jonsson, S. (2008). Isomorphism, diffusion and decoupling. In R. Greenwood, C. Oliver, R. Suddaby, & K. Sahlin (Eds.), The SAGE handbook of organizational institutionalism (pp. 78–99). Thousands Oaks, CA: Sage.

    Google Scholar 

  • BSI (British Standards Institute). (2017). BS 8001: 2017 framework for implementing the principles of the circular economy in organisations. Retrieved August 2017, from https://www.bsigroup.com/en-GB/standards/benefits-of-using-standards/becoming-more-sustainable-with-standards/Circular-Economy/.

  • Christensen, L., Mackey, A., & Whetten, D. (2014). Taking responsibility for corporate social responsibility: The role of leaders in creating, implementing, sustaining, or avoiding socially responsible firm behaviors. The Academy of Management Perspective, 28, 164–178.

    Article  Google Scholar 

  • Circle Economy. (2016). Master circular business with the value hill. Retrieved August 2017, from http://www.circle-economy.com/wp-content/uploads/2016/09/finance-white-paper-20160923.pdf.

  • D’Aunno, T., Succi, M., & Alexander, J. (2000). The role of institutional and market forces in divergent organizational change. Administrative Science Quarterly, 45, 679–708.

    Article  Google Scholar 

  • DEFRA. (2011). Government review of waste policy in England. Retrieved March 2015, from https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/69401/pb13540-waste-policy-review110614.pdf.

  • DEFRA. (2012). Resource security action plan: Making the most of valuable materials. Retrieved March 2015, from http://www.gov.uk/government/publications.

  • DEFRA. (2013). Prevention is better than cure. The role of waste prevention in moving to a more resource efficient economy. Retrieved March 2015, from http://www.gov.uk/government/publications.

  • DEFRA. (2014). Waste prevention programme for England one year on newsletter. Retrieved April 2015, from http://www.gov.uk/government/publications.

  • DEFRA. (2015). UK response to European commission consultation of member states on the circular economy. Retrieved December 2015, from http://www.gov.uk.

  • Delmas, M., & Toffel, M. (2012). Institutional pressures and organizational characteristics: Implications for environmental strategy. In A. Hoffman & P. Bansal (Eds.), The Oxford handbook of business and the natural environment (pp. 229–247). Oxford Handbooks Online.

    Google Scholar 

  • Demil, B., Lecocq, X., Ricart, J., & Zott, C. (2015). Introduction to the special issue: Business models within the domain of strategic entrepreneurship. Strategic Entrepreneurship Journal, 9, 1–11.

    Article  Google Scholar 

  • Di Maggio, P. (1983). State expansion and organizational field. In R. Hall & R. Quinn (Eds.), Organizational theory and public policy (pp. 147–161). Beverly Hills, CA: Sage.

    Google Scholar 

  • Di Maggio, P. (1988). Interest and agency in institutional theory. In L. G. Zucker (Ed.), Institutional patterns and organizations: Culture and environment (pp. 3–21). Cambridge, MA: Ballinger.

    Google Scholar 

  • Di Maggio, P., & Powell, W. (1983). The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields. American Sociological Review, 48, 147–160.

    Article  Google Scholar 

  • Doh, J., Howton, S., Howton, S., & Siegel, D. (2010). Does the market respond to an endorsement of social responsibility? The role of institutions, information and legitimacy. Journal of Management, 36, 1461–1485.

    Article  Google Scholar 

  • Driscoll, C., & Starik, M. (2004). The primordial stakeholder: Advancing the conceptual consideration of stakeholder status for the natural environment. Journal of Business Ethics, 49, 55–73.

    Article  Google Scholar 

  • Dyer, J., & Singh, H. (1998). The relational view: Cooperative strategy and sources of interorganizational competitive advantage. Academy of Management Review, 23, 660–679.

    Google Scholar 

  • EMF (Ellen MacArthur Foundation). (2015). Towards a circular economy. Business rationale for an accelerated transition. Retrieved November 2016, from https://www.ellenmacarthurfoundation.org/publications/towards-a-circular-economy-business-rationale-for-an-accelerated-transition.

  • EMF. (2016). Priority research agenda. Retrieved December 2016, from http://www.circulareconomy.com/assets/downloads/higher-education/EMF_Priority-Research-Agenda-copy.pdf.

  • EMF. (2017a). What is CE 100? Retrieved January 2017, from http://www.ellenmacarthurfoundation.org/business/ce100.

  • EMF. (2017b). Pioneer and network universities. Retrieved January 2017, from http://www.ellenmacarthurfoundation.org/higher_education.

  • EMF. (2017c). Partner universities. Retrieved January 2017, from https://www.ellenmacarthurfoundation.org/programmes/education/schmidt-macarthur-fellowship/fellowship.

  • EMF. (2017d). Courses. Retrieved June 2017, from https://www.ellenmacarthurfoundation.org/programmes/education/courses.

  • EMF, & IDEO. (2017). Business model canvas. Retrieved August 2017, from http://circulardesignguide.com/post/circular-business-model-canvas.

  • EMF, & McKinsey. (2012). Towards the circular economy: Economic and business rationale for an accelerated transition. Retrieved May 2013, from http://www.ellenmacarthurfoundation.org/business/reports.

  • EMF, McKinsey, & SUN. (2015). Growth within: A circular economy vision for a competitive Europe. Retrieved July 2015, from http://www.ellenmacarthurfoundation.org/business/reports.

  • Eurobarometer. (2014). Attitudes of Europeans towards waste management and resource efficiency. Retrieved August 2017, from http://ec.europa.eu/public_opinion.

  • Fischer, A., & Pascucci, S. (2017). Institutional incentives in circular economy transition: The case of material use in the Dutch textile industry. Journal of Cleaner Production. https://doi.org/10.1016/j.jclepro.2016.12.038.

    Article  Google Scholar 

  • Gilmore, S., & Sillince, J. (2014). Institutional theory and change: The deinstitutionalisation of sports science at Club X. Journal of Organizational Change Management, 27, 314–330.

    Article  Google Scholar 

  • Gorissen, L., Vrancken, K., & Manshoven, S. (2016). Transition thinking and business model innovation–Towards a transformative business model and new role for the reuse centers of Limburg, Belgium. Sustainability, 8, 1–23.

    Article  Google Scholar 

  • Goyal, S., Esposito, M., & Kapoor, A. (2016). Circular economy business models in developing economies: Lessons from India on reduce, recycle and reuse paradigms. Thunderbird International Business Review. https://doi.org/10.1002/tie.21883.

    Google Scholar 

  • Gregson, N., Crang, M., Fuller, S., & Holmes, H. (2015). Interrogating the circular economy: The moral economy of resource recovery in the EU. Economy and Society, 44, 218–243.

    Article  Google Scholar 

  • Hahn, R., & Lülfs, R. (2014). Sustainable behavior in the business sphere: A comprehensive overview of the explanatory power of psychological model. Organization & Environment, 27, 43–64.

    Article  Google Scholar 

  • Hahn, T., Figge, F., Aragón-Correa, J., & Sharma, S. (2015). Advancing research on corporate sustainability: Off to pastures new or back to the roots? Business & Society On-Line. https://doi.org/10.1177/0007650315576152.

    Google Scholar 

  • Haigh, N., & Hoffman, A. (2014). The new heretics: Hybrid organizations and the challenges they present to corporate sustainability. Organization & Environment, 27, 223–241.

    Article  Google Scholar 

  • Hart, S. (1995). A natural-resource-based-view of the firm. Academy of Management Review, 20, 986–1014.

    Google Scholar 

  • Hart, S. (2010). Capitalism at the crossroad: Next generation business strategies for a post-crisis world (3rd ed.). Upper Saddle River, NJ: Prentice Hall.

    Google Scholar 

  • Hart, S. (2012). The third generation corporation. In A. Hoffman & P. Bansal (Eds.), The Oxford handbook of business and natural environment (pp. 647–656). Oxford Handbooks Online.

    Google Scholar 

  • Hart, S., & Dowell, G. (2011). A natural-resource-based view of the firm: Fifteen years after. Journal of Management, 37, 1464–1479.

    Article  Google Scholar 

  • Hart, S., & Milstein, M. (1999). Global sustainability and the creative destruction of industries. MIT Sloan Management Review, 41, 23–33.

    Google Scholar 

  • Hasse, R., & Krücken, G. (2008). Systems theory, societal contexts, and organizational heterogeneity. In R. Greenwood, C. Oliver, R. Suddaby, & K. Sahlin (Eds.), The SAGE handbook of organizational institutionalism (pp. 539–560). Thousand Oaks, CA: Sage.

    Google Scholar 

  • Hobson, K., & Lynch, N. (2016). Diversifying and de-growing the circular economy: Radical social transformation in a resource-scarce world. Futures, 82, 15–25.

    Article  Google Scholar 

  • Hodgson, G. (1998). The approach of institutional economics. Journal of Economic Literature, 36, 166–192.

    Google Scholar 

  • Hoffman, A. (1999). Institutional evolution and change: Environmentalism and the U.S. chemical industry. Academy of Management Journal, 42, 351–371.

    Article  Google Scholar 

  • Hoffman, A., & Bansal, P. (2012). Retrospective, perspective and prospective: Introduction to the Oxford handbook on business and the natural environment. In A. Hoffman & P. Bansal (Eds.), The Oxford handbook of business and the natural environment (pp. 1–34). Oxford: Oxford University Press.

    Google Scholar 

  • Hoffman, A., & Jennings, D. (2015). Institutional theory and the natural environment: Research in (and on) the Anthropocene. Organization & Environment, 28, 8–31.

    Article  Google Scholar 

  • House of Commons, Environmental Audit Committee. (2014). Growing a circular economy: Ending the throwaway society. Third report of session 2014–2015. Retrieved April 2015, from http://www.publications.parliament.uk.

  • IEEP (Institute for European Environmental Policy). (2016). The potential policy and environmental consequences for the UK of a departure from the European Union. Retrieved November 2016, from http://www.ieep.eu/assets/2000/IEEP_Brexit_2016.pdf.

  • Innovate UK. (2015). Circular economy: Business models. Retrieved March 2015, from http://interact.innovateuk.org.

  • IPPR (Institute for Public Policy Research). (2013). Sustainable consumption in the UK. A selection of case studies. Retrieved August 2017, from http://ippr.org.

  • Joint Written Evidence to the Environmental Audit Committee. (2014). Joint written evidence submitted by DEFRA, BIS, CLG, HMT, DflD, FCO and DECC. Retrieved April 2015, from http://data.parliament.uk/writtenevidence.

  • Lacy, P., & Rutqvist, J. (2015). Waste to wealth: The circular economy advantage. New York: Palgrave Macmillan.

    Book  Google Scholar 

  • Lecocq, X., Demil, B., & Ventura, J. (2010). Business models as a research program in strategic management: An appraisal based on Lakatos. M@n@gement, 13, 214–225.

    Google Scholar 

  • Lewandowski, M. (2016). Designing the business models for circular economy. Towards the conceptual framework. Sustainability, 8, 1–28.

    Article  Google Scholar 

  • Lifset, R., & Boons, F. (2012). Industrial ecology: Business management in a material world. In P. Bansal & A. Hoffman (Eds.), The Oxford handbook of business and natural environment (pp. 311–326). Oxford: Oxford University Press.

    Google Scholar 

  • Linder, M., & Williander, M. (2015). Circular business model innovation: Inherent uncertainties. Business Strategy and the Environment. https://doi.org/10.1002/bse.1906.

    Article  Google Scholar 

  • Linnenluecke, M., & Griffiths, A. (2013). Firms and sustainability: Mapping the intellectual origins and structure of the corporate sustainability field. Global Environmental Change, 23, 382–391.

    Article  Google Scholar 

  • Lounsbury, M., Fairclough, S., & Lee, M. (2012). Institutional approaches to organizations and the natural environment. In A. Hoffman & P. Bansal (Eds.), The Oxford handbook of business and natural environment (pp. 211–228). Oxford: Oxford University Press.

    Google Scholar 

  • Lovins, A., Lovins, L., & Hawken, P. (1999). A road map for natural capitalism. Harvard Business Review, 77(May–June), 145–158.

    Google Scholar 

  • Maguire, S., Hardy, C., & Lawrence, T. (2004). Institutional entrepreneurship in emerging fields: HIV/AIDS treatment advocacy in Canada. Academy of Management Journal, 47, 657–679.

    Article  Google Scholar 

  • Mantzavinos, C., North, D., & Shariq, S. (2004). Learning, institutions and economic performance. Perspective on Politics, 12, 75–84.

    Article  Google Scholar 

  • Meyer, J., & Rowan, B. (1977). Institutionalized organizations: Formal structures as myth and ceremony. American Journal of Sociology, 83, 340–363.

    Article  Google Scholar 

  • Montiel, I., & Delgado-Ceballos, J. (2014). Defining and measuring corporate sustainability: Are we there yet? Organization & Environment, 27, 113–139.

    Article  Google Scholar 

  • Moreau, V., Sahakian, M., van Griethuysen, P., & Vuille, F. (2017). Coming full circle. Why social and institutional dimensions matter for the circular economy. Journal of Industrial Ecology. https://doi.org/10.1111/jiec.12598.

  • Moreno, M., De los Rios, C., Rowe, Z., & Charnley, F. (2016). A conceptual framework for circular design. Sustainability, 8, 1–15.

    Google Scholar 

  • Murray, A., Skene, K., & Haynes, K. (2015). The circular economy: An interdisciplinary exploration of the concept and application in a global context. Journal of Business Ethics, 1–12. https://doi.org/10.1007/s10551-015-2693-2.

  • Norden. (2015). Moving towards a circular economy. Successful Nordic business models. Retrieved August 2017, from http://norden.diva-portal.org/smash/get/diva2:852029/FULLTEXT01.pdf.

  • North, D. (1990). Institutions, institutional change and economic performance. Cambridge: Cambridge University Press.

    Google Scholar 

  • Oliver, C. (1991). Strategic responses to institutional processes. Academy of Management Review, 16, 145–179.

    Article  Google Scholar 

  • Oliver, C. (1997). The influence of institutional and task environment relationships on organizational performance: The Canadian construction industry. Journal of Management Studies, 34, 99–124.

    Article  Google Scholar 

  • Osterwalder, A., & Pigneur, Y. (2010). Business model generation. A handbook for visionaries, game changers and challengers. Hoboken, NJ: Wiley.

    Google Scholar 

  • Randles, S., & Laasch, O. (2016). Theorising the normative business model. Organization & Environment, 29, 53–73.

    Article  Google Scholar 

  • Resource. (2015). What is resource. Retrieved July 2015, from http://www.resource-event.com/about-us.

  • RSA (Royal Society for the Encouragement of Arts, Manufactures and Commerce). (2013). Investigating the role of design in the circular economy. Executive summary. Retrieved June 2015, from http://www.greatrecovery.org.uk/resources/.

  • Ruggieri, A., Braccini, A., Poponi, S., & Mosconi, E. (2016). A meta-model of inter-organisational cooperation for the transition to a circular economy. Sustainability, 8, 1153. https://doi.org/10.3390/su8111153.

  • Schneider, S., & Spieth, P. (2013). Business model innovation: Towards an integrated future research agenda. International Journal of Innovation Management, 17, 1–34.

    Article  Google Scholar 

  • Scott, W. (1987). The adolescence of institutional theory. Administrative Science Quarterly, 32, 493–511.

    Article  Google Scholar 

  • Scott, W. (1995). Institutions and organizations. Thousands Oaks; CA: Sage.

    Google Scholar 

  • Scott, W. (2008). Institutions and organizations: Ideas and interests (3rd ed.). Thousand Oaks, CA: Sage.

    Google Scholar 

  • Seely, A. (2009). Landfill tax: Introduction and early history. Retrieved December 2015, from http://www.parliament.uk/commons-library.

  • Sempels, C. (2013). Implementing a circular and performance economy through business model innovation. In EMF (Ed.), A new dynamic. Effective business in a circular economy (pp. 143–156). Cowes: Ellen MacArthur Foundation.

    Google Scholar 

  • Shrivastava, P., & Hart, S. (1995). Creating sustainable corporations. Business Strategy and the Environment, 4, 154–165.

    Article  Google Scholar 

  • Sommer, A. (2012). Managing green business models transformations. Berlin and Heidelberg: Springer.

    Book  Google Scholar 

  • Stahel, W. (2006). The performance economy (2nd ed.). Basingstoke: Palgrave Macmillan.

    Google Scholar 

  • Starik, M. (1995). Should trees have managerial standing? Toward stakeholder status for non-human nature. Journal of Business Ethics, 14, 207–217.

    Article  Google Scholar 

  • Starik, M., & Kanashiro, P. (2013). Toward a theory of sustainable management: Uncovering and integrating the nearly obvious. Organization & Environment, 26, 7–30.

    Article  Google Scholar 

  • Starik, M., & Rands, G. (1995). Weaving an integrated web: Multilevel and multisystem perspectives of ecologically sustainable organizations. Academy of Management Review, 20, 908–935.

    Google Scholar 

  • Teece, D. J. (2010). Business models, business strategy and innovation. Long Range Planning, 43, 172–194.

    Article  Google Scholar 

  • Van Renswoude, K., Ten Wolde, A., & Jan Joustra, D. (2015). Circular business models—Part 1: An introduction to IMSA’s circular business model scan. IMSA Amsterdam, April 2015. Retrieved August 2017, from https://groenomstilling.erhvervsstyrelsen.dk/sites/default/files/media/imsa_circular_business_models_-_april_2015_-_part_1.pdf.

  • Vatn, A. (2005). Institutions and the environment. Cheltenham: Edward Elgar.

    Google Scholar 

  • Waddock, S. (2011). We are all stakeholders of Gaia: A normative perspective on stakeholder thinking. Organization & Environment, 24, 192–212.

    Article  Google Scholar 

  • Webster, K. (2013). A concise guide to the circular economy. In EMF (Ed.), A new dynamic. Effective business in a circular economy (pp. 19–28).

    Google Scholar 

  • Weetman, C. (2017). A circular economy handbook for business and supply chains: Repair, remake, redesign, rethink. London: KoganPage.

    Google Scholar 

  • Wells, P. (2013). Business models for sustainability. Cheltenham: Edward Elgar.

    Google Scholar 

  • Wirtz, B., Pistoia, A., Ulrich, S., & Göttel, V. (2016). Business models: Origin, development and future research. Long Range Planning, 49, 36–54.

    Google Scholar 

  • WRAP. (2017a). Innovative business models map. Retrieved August 2017, from http://www.wrap.org.uk/content/innovative-business-model-map.

  • WRAP. (2017b). Product sustainability forum. Retrieved April 2017, from http://www.wrap.org.uk/content/product-sustainability-forum-psf.

  • WRAP. (2017c). Food waste reduction. Retrieved April 2017, from http://wrap.org.uk/food-waste-reduction.

  • WRAP. (2017d). ESAP. Generating value for business through sustainability. Retrieved March 2017, from http://www.wrap.org.uk/sites/files/wrap/esap-summary-2014.pdf.

  • WRAP. (2017e). Sustainable clothing action plan. Retrieved April 2017, from http://www.wrap.org.uk/content/sustainable-clothing-action-plan-1.

  • WRAP. (2017f). PIRAP background and UK targets. Retrieved June 2017, from http://www.wrap.org.uk/content/pirap-background-and-uk-targets.

  • WWF (World Wildlife Fund). (2016). Living planet report. Retrieved November 2016, from http://assets.wwf.org.uk/custom/lpr2016/.

  • Zollo, M., Cennamo, C., & Neumann, K. (2013). Beyond what and why: Understanding organizational evolution towards sustainable enterprise models. Organization & Environment, 26, 241–259.

    Article  Google Scholar 

  • Zott, C., & Amit, R. (2013). The business model: A theoretically anchored robust construct for strategic analysis. Strategic Organization, 11, 403–411.

    Article  Google Scholar 

  • Zott, C., Amit, R., & Massa, L. (2011). The business model: Recent development and future research. Journal of Management, 37, 1019–1042.

    Article  Google Scholar 

  • ZWS (Zero Waste Scotland). (2015). The carbon impacts of the circular economy. Retrieved September 2015, from http://www.zerowastescotland.org.uk/CarbonImpactsOfTheCircularEconomy.

Download references

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Roberta De Angelis .

Rights and permissions

Reprints and permissions

Copyright information

© 2018 The Author(s)

About this chapter

Check for updates. Verify currency and authenticity via CrossMark

Cite this chapter

De Angelis, R. (2018). Circular Business Models: Some Theoretical Insights. In: Business Models in the Circular Economy. Palgrave Pivot, Cham. https://doi.org/10.1007/978-3-319-75127-6_4

Download citation

Publish with us

Policies and ethics