Managerial and Organizational Antecedents of Business Model Innovation for a Circular Economy

Today’s economic system and the companies operating within it are strongly oriented toward a linear pattern of value creation in which raw materials are extracted from the earth, products are manufactured, sold to customers, and end up as waste. This economic linearity causes material waste, global warming, and other environmental degradation. There is increasing pressure being put on companies to implement sustainable, material-conserving business models. An economical alternative is a circular economy (CE) in which companies focus on closed material loops implemented with so-called circular business models (CMBs). Although some research has been done in this field, there is still a significant research gap regarding the company-internal driving factors that facilitate the implementation of CBMs. This current study involved conducting interviews with 59 Swiss managers of small- and medium-sized enterprises from three industries: food and beverage, textile, and logistics. Helped by an inductive grounded theory approach, five managerial and five organizational drivers were identified and analyzed first. In the second step, the concept of dynamic capabilities (DCs) was used to explain the possible influence of drivers on the creation of CBMs conceptually and with reference to data. This study shows which company-internal drivers can act as antecedents of CBM innovation in the entrepreneurial context and how they can affect the higher-order DCs of sensing, seizing, and transforming, according to Teece (2007). This current study contributes to the analysis of factors that stimulate economic transformation toward a CE from a company perspective.