Meta-synthesis of drivers of the circular business model

Khodaei, Atieh; Hosseinpour, Mahdi; Jamshidi, Mohammad Javad; Mohamadifar, Yoosof

doi:10.22034/jvcbm.2023.408968.1152

Meta-synthesis of drivers of the circular business model

Document Type : Original Article (Qualitative)

Authors

Atieh Khodaei ¹

Mahdi Hosseinpour ²

Mohammad javad Jamshidi ¹

Yoosof Mohamadifar ¹

¹ Department of Management and Entrepreneurship, Faculty of Social Sciences, Razi University, Kermanshah, Iran.

² Assistant Professor, Department of Management and Entrepreneurship, Faculty of Social Sciences, Razi University, Kermanshah, Iran.

https://doi.org/10.22034/jvcbm.2023.408968.1152

Abstract

Abstract
The present research was conducted through the combination of previous research with the aim of presenting a comprehensive picture of the components and concepts of the drivers of the circular business model. The research methodology is qualitative with a meta-synthesis approach. Accordingly, after searching in reliable domestic and foreign databases, in the time range of 2014 to 2023 for domestic research sand 2010 to 2023 for foreign researches, a number of 97 related studies were evaluated and finally, after multiple screenings, 42 articles were selected. The findings of 42 previous studies related to the research objectives were reviewed, aggregated, combined, and interpreted by means of the seven-step model of Sandelowski and Barroso. Using the coding method, the number of 27 codes, 8 concepts, and 3 components were identified and validated through Cohen's kappa test, and the model of the drivers of circular business model was presented and drawn. The results of this research showed that a wide range of drivers can be used for transition from linear and traditional business models to circular business models and by carefully considering and understanding these drivers, it is possible to strengthen them and finally facilitate the implementation of successful circular business models. Finally, in line with the results of the research, practical suggestions are presented that can provide valuable insight to individuals and business managers and policy makers who seek to improve circular entrepreneurship and increase the entrepreneurial behavior of the society and at operational levels by actors who accompany circular entrepreneurship.
Extended Abstract
Introduction
Our world is currently facing numerous environmental, social and economic challenges, and the consequences of these challenges can be seen in climate change, pollution, loss of biodiversity and resource destruction. Today, researchers have reached a turning point in what the earth can sustain and current living standards are not sustainable in the long term (Toth-Peter et al., 2023). Also, the rapid increase in population puts pressure on the consumption of biological resources, and as a result, governments, businesses and communities are directed to try to preserve the available resources. In contrast to the linear economy, the circular economy approach has attracted a lot of attention, and researchers have highlighted the urgent need to adopt a circular economy and thus conserve resources at all levels (Velenturf & Purnell, 2021). Circular economy is a concept that benefits the environment and mankind (Neves & Marques, 2022). This call has led commercial businesses to transform the existing linear business model into a circular business model (Palmié et al., 2021). In fact, it is very important to change the paradigm from a linear economy to a circular economy to reduce the pressure on the environment and improve the security of the supply of raw materials. Under this new paradigm, which is governed by the requirements of "reduce, reuse and recycle", the extraction of primary resources is minimized by increasing the useful life of existing resources and materials (Neves & Marques, 2022). The circular business model is also defined as an organizational ecosystem to create, absorb and provide value by extending the useful life of products through remanufacturing, repairing or designing long-life products (Bocken et al., 2016). Therefore, the increasing popularity and need of the circular business model at the global level creates the need for a better understanding of the various drivers of the circular business model. Despite examining the benefits and drivers of the circular business model, the implementation of the circular business model in the manufacturing industry and many businesses is still limited (Urbinati et al., 2017). Therefore, much more theoretical and empirical effort is needed to analyze the enabling and driving factors for designing circular business models (Hussain & Malik, 2020); that is, the factors that encourage the transition to a circular business model (De Jesus & Mendonça, 2018). However, previous studies have identified drivers for the change towards circular business models in a fragmented and separate manner, which encourages the implementation of circular business models; which, due to the great importance of circular business models in order to gain sustainable competitive advantage and create multiple values of economic development, social justice and environmental protection, requires a complete investigation, aggregation and interpretation. In fact, the existing articles in this field have addressed some of the indicators and drivers of circular business models separately; therefore, the current research aims to answer the following question by choosing a different perspective from previous researches and identifying, combining and deeply understanding the components, concepts and indicators with a systematic and comprehensive analysis in a meta-composite way: What is the pattern of drivers of the circular business model?
Theoretical framework
The concept of circular economy has received increasing attention due to the conditions of the global ecosystem, the need to reuse materials and economic justifications (Charef & Emmitt, 2021). This concept is defined as an economic system focused on the reuse of products and materials to conserve natural resources as a starting point where "environmental and social values are vital in every part of the system" (Reike et al., 2018). The main idea of the circular economy is to close material loops and thus avoid waste, reduce pollution and minimize the use of intact resources. This should maximize the useful life of products by recreating processes like those in nature (Sauvé et al., 2016). The concept has also sparked some inevitable deep debates at business and organizational levels globally, as the world claims to transition to a resource-efficient model, particularly in business areas that focus on rotational business models. (Diaz et al., 2021). A circular business model can be defined as “the logic of how to create, deliver and capture value with and within material closed loops” (Antikainen et al., 2018). The adaptation of circular business models enables businesses not only to operate sustainably, but also to create a competitive advantage (Ghisellini et al., 2016). Circular business models are networked in nature and therefore require different actors in the value network to work together towards common goals. There is a need to consider changes in value creation for a wide range of actors, as there are often game changes in business models.
Research methodology
This research is applicable in terms of purpose. In order to collect data, all the researches published in the field of circular economy in reliable domestic and foreign databases based on the keywords "business model", "circular business" and "circular business model", in relation to "circular economy" is defined for entrepreneurship and management journals. 97 related studies were evaluated and finally, after reviewing, 42 articles were selected. The basis of validity of the present research is theoretical validity. The meta-synthesis approach based on the guidelines of Sandelowski and Barroso was applied in this study. This approach is a systematic review of qualitative research findings to create a new interpretation through a logical and consistent seven-step process. The meta-synthesis process includes defining the research questions and goals, organized reviewing of the literature, searching and choosing related studies, extracting textual information, analyzing and synthesizing qualitative findings, controlling the quality, and, finally, providing the findings.
Research findings
Cohen's kappa test was used to measure the quality. The results of calculating the kappa statistic in this research show that the kappa coefficient is equal to 0.732, which indicates the reliability of this research. Using the coding method based on the analysis done with the help of content analysis, the content of 42 final articles has been selected and a total of 27 codes, 8 concepts and 3 components have been identified. Based on the findings of the research, the final model of the drivers of the circular business model has been complied according to the following figure.

Circular business model drivers

Drivers with micro approach

Supply chain

Social

Economic

Macro policymaking

Drivers with meso approach

Drivers with macro approach

Technological

Organizationa

Product

Consumer

Figure 1 The role model drivers of circular business model
Conclusion
In general, circular business models reduce negative environmental effects, improve competitive advantage through cost reduction, or increase income and create new businesses and employment, which will ultimately improve economic efficiency and social status. In particular, in this research, the basic drivers of the circular business model have been identified. The concepts identified in this research were introduced and expressed under three components, including drivers with a micro approach, drivers with a meso approach, and drivers with a macro approach. The components of drivers with a micro approach include economic, organizational and technological concepts. In this way, the component of drivers with a meso approach includes the concepts of supply chain, product and consumer, and the component of drivers with a macro approach includes macro policymaking and social concepts. The findings of this research show that it used a wide range of drivers to transition from linear and traditional business models to circular business models. By carefully considering and understanding these drivers, it is possible to strengthen them and finally facilitate the implementation of successful circular business models. The flow of materials and energy in the current conditions of the country, on the one hand, due to the environmental restrictions, and on the other hand, due to the sanctions, is of special importance for the economy, especially the circular economy. The movement and transition towards circular business models in businesses makes it possible to move towards more dynamic and integrated business models, with a high degree of interaction of all actors (i.e. public partners, businesses, research institutions and other stakeholders such as local communities, customers or consumers). This requires a collaborative approach between the business community, policy-makers and institutions in order to accept sustainability as a business requirement and adopt models that create shared value and direct systemic changes towards circular economy goals. The results of this research show that a business can lead to a transition from a traditional business model to a circular business model through its production and management capabilities and the innovations it develops. Also, governments can be considered as a serious and very effective driver in the transition of traditional business models to circular business models with the right and facilitating policies and legislation.

Keywords

Circular economy

Business model

Circular business model

Circular business model drivers

Meta-synthesis

20.1001.1.00000000.1403.4.4.1.6

Subjects

Entrepreneurship

Adams, K. T., Osmani, M., Thorpe, T., & Thornback, J. (2017). Circular economy in construction: current awareness, challenges and enablers. Proceedings of the Institution of Civil Engineers-Waste and Resource Management, 170(1), 15–24.

Agyemang, M., Kusi-Sarpong, S., Khan, S. A., Mani, V., Rehman, S. T., & Kusi-Sarpong, H. (2019). Drivers and barriers to circular economy implementation: An explorative study in Pakistan’s automobile industry. Management Decision, 57(4), 971–994.

Antikainen, M., Uusitalo, T., & Kivikytö-Reponen, P. (2018). Digitalisation as an enabler of circular economy. Procedia Cirp, 73, 45–49.

Asgari, A., & Asgari, R. (2021). How circular economy transforms business models in a transition towards circular ecosystem: the barriers and incentives. Journal of Sustainable Production and Consumption, 28, 566–579.

Awan, U., & Sroufe, R. (2022). Sustainability in the circular economy: Insights and dynamics of designing circular business models. Applied Sciences, 12(3), 1521.

Bai, C., Sarkis, J., & Dou, Y. (2015). Corporate sustainability development in China: review and analysis. Industrial Management & Data Systems, 115(1), 5–40.

Bakker, C., Wang, F., Huisman, J., & Den Hollander, M. (2014). Products that go round: exploring product life extension through design. Journal of Cleaner Production, 69, 10–16.

Barquet, A. P. B., de Oliveira, M. G., Amigo, C. R., Cunha, V. P., & Rozenfeld, H. (2013). Employing the business model concept to support the adoption of product–service systems (PSS). Industrial Marketing Management, 42(5), 693–704.

Bocken, N. M. P., 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(5), 308–320.

Boons, F., & Lüdeke-Freund, F. (2013). Business models for sustainable innovation: state-of-the-art and steps towards a research agenda. Journal of Cleaner Production, 45, 9–19.

Briguglio, M., Llorente-González, L. J., Meilak, C., Pereira, Á., Spiteri, J., & Vence, X. (2021). Born or grown: Enablers and barriers to circular business in europe. Sustainability, 13(24), 13670.

Charef, R., & Emmitt, S. (2021). Uses of building information modelling for overcoming barriers to a circular economy. Journal of Cleaner Production, 285, 124854.

Chkanikova, O., & Mont, O. (2015). Corporate supply chain responsibility: drivers and barriers for sustainable food retailing. Corporate Social Responsibility and Environmental Management, 22(2), 65–82.

Cooper, D. R., & Gutowski, T. G. (2017). The environmental impacts of reuse: a review. Journal of Industrial Ecology, 21(1), 38–56.

Corral-Marfil, J.-A., Arimany-Serrat, N., Hitchen, E. L., & Viladecans-Riera, C. (2021). Recycling technology innovation as a source of competitive advantage: The sustainable and circular business model of a bicentennial company. Sustainability, 13(14), 7723.

De Jesus, A., & Mendonça, S. (2018). Lost in transition? Drivers and barriers in the eco-innovation road to the circular economy. Ecological Economics, 145, 75–89.

Del Vecchio, P., Urbinati, A., & Kirchherr, J. (2022). Enablers of managerial practices for circular business model design: an empirical investigation of an agro-energy company in a rural area. IEEE Transactions on Engineering Management.

Diaz, A., Schöggl, J.-P., Reyes, T., & Baumgartner, R. J. (2021). Sustainable product development in a circular economy: Implications for products, actors, decision-making support and lifecycle information management. Sustainable Production and Consumption, 26, 1031–1045.

Esposito, M., Tse, T., & Soufani, K. (2017). Is the circular economy a new fast‐expanding market? Thunderbird International Business Review, 59(1), 9–14.

Geissdoerfer, M., Savaget, P., Bocken, N. M. P., & Hultink, E. J. (2017). The Circular Economy–A new sustainability paradigm? Journal of Cleaner Production, 143, 757–768.

Geng, Y., Fu, J., Sarkis, J., & Xue, B. (2012). Towards a national circular economy indicator system in China: an evaluation and critical analysis. Journal of Cleaner Production, 23(1), 216–224.

Ghadge, A., Kaklamanou, M., Choudhary, S., & Bourlakis, M. (2017). Implementing environmental practices within the Greek dairy supply chain: Drivers and barriers for SMEs. Industrial Management & Data Systems.

Ghisellini, P., Cialani, C., & Ulgiati, S. (2016). A review on circular economy: the expected transition to a balanced interplay of environmental and economic systems. Journal of Cleaner Production, 114, 11–32.

Govindan, K., & Hasanagic, M. (2018). A systematic review on drivers, barriers, and practices towards circular economy: a supply chain perspective. International Journal of Production Research, 56(1–2), 278–311.

Hagejärd, S., Ollár, A., Femenías, P., & Rahe, U. (2020). Designing for circularity—Addressing product design, consumption practices and resource flows in domestic kitchens. Sustainability, 12(3), 1006.

Hart, J., Adams, K., Giesekam, J., Tingley, D. D., & Pomponi, F. (2019). Barriers and drivers in a circular economy: the case of the built environment. Procedia Cirp, 80, 619–624.

Hazen, B. T., Mollenkopf, D. A., & Wang, Y. (2017). Remanufacturing for the circular economy: An examination of consumer switching behavior. Business Strategy and the Environment, 26(4), 451–464.

Hina, M., Chauhan, C., Kaur, P., Kraus, S., & Dhir, A. (2022). Drivers and barriers of circular economy business models: Where we are now, and where we are heading. Journal of Cleaner Production, 333, 130049.

Hofmann, F., & Jaeger‐Erben, M. (2020). Organizational transition management of circular business model innovations. Business Strategy and the Environment, 29(6), 2770–2788.

Hussain, M., & Malik, M. (2020). Organizational enablers for circular economy in the context of sustainable supply chain management. Journal of Cleaner Production, 256, 120375.

Ilić, M., & Nikolić, M. (2016). Drivers for development of circular economy–A case study of Serbia. Habitat International, 56, 191–200.

Jakhar, S. K., Mangla, S. K., Luthra, S., & Kusi-Sarpong, S. (2019). When stakeholder pressure drives the circular economy: Measuring the mediating role of innovation capabilities. Management Decision, 57(4), 904–920.

Jones, P. T., Geysen, D., Tielemans, Y., Van Passel, S., Pontikes, Y., Blanpain, B., Quaghebeur, M., & Hoekstra, N. (2013). Enhanced Landfill Mining in view of multiple resource recovery: a critical review. Journal of Cleaner Production, 55, 45–55.

Khodaei, A., Hosseinpour, M., Jamshidi, M., & Mohammadifar, Y. (2023). Meta-synthesis the benefits of using circular business models in the agri-food sector. Journal of Studies in Entrepreneurship and Sustainable Agricultural Development, (In Persian). https://doi.org/10.22069/jead.2023.21484.1737

Konietzko, J., Bocken, N., & Hultink, E. J. (2020). A tool to analyze, ideate and develop circular innovation ecosystems. Sustainability, 12(1), 417.

Korsunova, A., Horn, S., & Vainio, A. (2021). Understanding circular economy in everyday life: Perceptions of young adults in the Finnish context. Sustainable Production and Consumption, 26, 759–769.

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

Linder, M., & Williander, M. (2017). Circular business model innovation: inherent uncertainties. Business Strategy and the Environment, 26(2), 182–196.

Mathews, J. A., & Tan, H. (2011). Progress toward a circular economy in China: The drivers (and inhibitors) of eco‐industrial initiative. Journal of Industrial Ecology, 15(3), 435–457.

Merli, R., Preziosi, M., & Acampora, A. (2018). How do scholars approach the circular economy? A systematic literature review. Journal of Cleaner Production, 178, 703–722.

Mohammadian, A., Vares, S. H., & Nabizade, N. (2022). Circular business model canvas: Proposing the business model design options in a circular economy. Iranian Journal of Management Sciences, 17(65), 123-147 (In Persian). http://journal.iams.ir/article_374.html

Moktadir, M. A., Kumar, A., Ali, S. M., Paul, S. K., Sultana, R., & Rezaei, J. (2020). Critical success factors for a circular economy: Implications for business strategy and the environment. Business Strategy and the Environment, 29(8), 3611–3635.

Murray, A., Skene, K., & Haynes, K. (2017). The circular economy: an interdisciplinary exploration of the concept and application in a global context. Journal of Business Ethics, 140(3), 369–380.

Neves, S. A., & Marques, A. C. (2022). Drivers and barriers in the transition from a linear economy to a circular economy. Journal of Cleaner Production, 341, 130865.

Nobre, G. C., & Rodrigues, E. M. T. (2020). Assessing the Role of Big Data and the Internet of Things on the Transition to Circular Economy: Part II: An extension of the ReSOLVE framework proposal through a literature review. Johnson Matthey Technology Review.

Nogueira, A., Ashton, W., Teixeira, C., Lyon, E., & Pereira, J. (2020). Infrastructuring the circular economy. Energies, 13(7), 1805.

Ongondo, F. O., Williams, I. D., Dietrich, J., & Carroll, C. (2013). ICT reuse in socio-economic enterprises. Waste Management, 33(12), 2600–2606.

Palmié, M., Boehm, J., Lekkas, C.-K., Parida, V., Wincent, J., & Gassmann, O. (2021). Circular business model implementation: Design choices, orchestration strategies, and transition pathways for resource-sharing solutions. Journal of Cleaner Production, 280, 124399.

Park, J. Y., & Chertow, M. R. (2014). Establishing and testing the “reuse potential” indicator for managing wastes as resources. Journal of Environmental Management, 137, 45–53.

Pringle, T., Barwood, M., & Rahimifard, S. (2016). The challenges in achieving a circular economy within leather recycling. Procedia CIRP, 48, 544–549.

Rauer, J., & Kaufmann, L. (2015). Mitigating external barriers to implementing green supply chain management: A grounded theory investigation of green‐tech companies’ rare earth metals supply chains. Journal of Supply Chain Management, 51(2), 65–88.

Reike, D., Vermeulen, W. J. V, & Witjes, S. (2018). The circular economy: new or refurbished as CE 3.0?—exploring controversies in the conceptualization of the circular economy through a focus on history and resource value retention options. Resources, Conservation and Recycling, 135, 246–264.

Rizos, V., Behrens, A., Van der Gaast, W., Hofman, E., Ioannou, A., Kafyeke, T., Flamos, A., Rinaldi, R., Papadelis, S., & Hirschnitz-Garbers, M. (2016). Implementation of circular economy business models by small and medium-sized enterprises (SMEs): Barriers and enablers. Sustainability, 8(11), 1212.

Sandelowski, M., & Barroso, J. (2003). Toward a metasynthesis of qualitative findings on motherhood in HIV‐positive women. Research in Nursing & Health, 26(2), 153–170.

Sauvé, S., Bernard, S., & Sloan, P. (2016). Environmental sciences, sustainable development and circular economy: Alternative concepts for trans-disciplinary research. Environmental Development, 17, 48–56.

Schiller, G., Müller, F., & Ortlepp, R. (2017). Mapping the anthropogenic stock in Germany: Metabolic evidence for a circular economy. Resources, Conservation and Recycling, 123, 93–107.

Shahdkar, F., Torabi, T., & Rahnama Roudposhti, F. (2023). The Circular Business Model is a Development Tool in the Process of Transitionto a Circular Economy: Presenting a Model at the Level of Knowledge-based Companies. Quarterly Journal of Applied Theories of Economics, 9(4), 133–160, (In Persian). https://doi.org/10.22034/ecoj.2023.53431.3102

Su, B., Heshmati, A., Geng, Y., & Yu, X. (2013). A review of the circular economy in China: moving from rhetoric to implementation. Journal of Cleaner Production, 42, 215–227.

Toth-Peter, A., de Oliveira, R. T., Mathews, S., Barner, L., & Figueira, S. (2023). Industry 4.0 as an enabler in transitioning to circular business models: A systematic literature review. Journal of Cleaner Production, 136284.

Tura, N., Hanski, J., Ahola, T., Ståhle, M., Piiparinen, S., & Valkokari, P. (2019). Unlocking circular business: A framework of barriers and drivers. Journal of Cleaner Production, 212, 90–98.

Urbinati, A., Chiaroni, D., & Chiesa, V. (2017). Towards a new taxonomy of circular economy business models. Journal of Cleaner Production, 168, 487–498.

Urbinati, A., Franzò, S., & Chiaroni, D. (2021). Enablers and Barriers for Circular Business Models: an empirical analysis in the Italian automotive industry. Sustainable Production and Consumption, 27, 551–566.

Vares, S. H., Mohammadian, A., Heidary Dahooie, J., Khajeheian, D., & Nabizade, N. (2022). A Taxonomy Framework for Circular Business Model Patterns from the Perspective of Circular Economy Strategies. Journal of Business Management, 14(1), 65-93 (In Persian). https://doi.org/10.22059/jibm.2021.319777.4072

Velenturf, A. P. M., & Purnell, P. (2021). Principles for a sustainable circular economy. Sustainable Production and Consumption, 27, 1437–1457.

Xiong, Y., Zhao, Q., & Zhou, Y. (2016). Manufacturer-remanufacturing vs supplier-remanufacturing in a closed-loop supply chain. International Journal of Production Economics, 176, 21–28.

Zhu, Q., & Geng, Y. (2013). Drivers and barriers of extended supply chain practices for energy saving and emission reduction among Chinese manufacturers. Journal of Cleaner Production, 40, 6–12.

Zott, C., Amit, R., & Massa, L. (2011). The business model: recent developments and future research. Journal of Management, 37(4), 1019–1042.

Zucchella, A., Urban, S., & Urban, S. (2019). From circular principles to circular entrepreneurship. Circular Entrepreneurship: Creating Responsible Enterprise, 1–30.