A Conceptualisation of Circular Business Models and Explanation of Their Adoption: Evidence from Four In-Depth Case Studies

Total Page:16

File Type:pdf, Size:1020Kb

A Conceptualisation of Circular Business Models and Explanation of Their Adoption: Evidence from Four In-Depth Case Studies A Conceptualisation of Circular Business Models and Explanation of Their Adoption: Evidence From Four In-Depth Case Studies Submitted by Roberta De Angelis to the University of Exeter as a thesis for the degree of Doctor of Philosophy in Management Studies in January 2016 This thesis is available for Library use on the understanding that it is copyright material and that no quotation from the thesis may be published without proper acknowledgement. I certify that all material in this thesis which is not my own work has been identified and that no material has previously been submitted and approved for the award of a degree by this or any other University. Signature: .................................................................... Abstract The scale of the ecological crisis and a combination of socio-economic and regulatory trends (rising global demand for goods, increasing resource price volatility and legislative efforts to reduce waste), are severely undermining the viability of linear operating business models which rest on a take-make-dispose logic. It is within this context that the circular economy gains relevance by proposing more resource efficient industrial processes that mirror the cyclical functioning of the eco-system where waste does not occur. A crucial constituent in the achievement of a circular economy is business model innovation. However, the academic literature on sustainable business models is still in its early days and pays very little attention to the circular economy and to circular business models. Hence, this research contributes to the sustainable business models literature by proposing a conceptualisation of circular business models and by illustrating the processes leading to their emergence and development. Organisational (resources and capabilities) and institutional (regulatory, normative and cognitive) perspectives have been applied mostly separately in the management literature examining why companies pursue ecological and social sustainability goals. This research attempts to reconcile the above agency versus structure dichotomy in explaining the adoption of circular business models. To accomplish this task, a qualitative, hermeneutical study has been conducted. Four holistic British case studies, considered as a form of contextualised explanation and chosen via purposive selection, delineate this research strategy. Participant observations, shadowing and semi-structured interviews (n=33) are the methods used for collecting primary data. Using narrative and comparative analyses, this thesis conceptualises circular business models as characterised by enhanced customers’ value, diffused and interconnected value creation, boundary spanning relational structures and idiosyncratic value capture mechanisms. It finds that their emergence and development is dependent on a combination of organisational and institutional influences. II List of Contents Abstract II List of Contents III List of Tables VII List of Figures VIII List of Appendices IX List of Abbreviations X Acknowledgements XIV Chapter 1 Introduction 1 1.1 Research overview, aims, questions and objectives 1 1.2 Thesis structure 6 Chapter 2 Literature Review 9 2.1.1 Introduction 9 Part one Corporate Environmental Sustainability: Past, Present 12 and Future 2.1.2 Research context 12 2.1.3 Business as ‘unusual’ and capitalism: an oxymoron? 15 2.1.4 Natural capitalism 19 2.1.5 Part one summary 25 Part two The Circular Economy, Business Models, Sustainable 28 Business Models and Circular Business Models 2.2.1 Introduction 28 2.2.2 The circular economy 28 2.2.3 Business models and business model innovation 38 2.2.4 Sustainable business models and circular business models 42 2.2.5 Part two summary 58 Part three Organisational and Institutional Theories in the Study of 62 Corporate Environmental Sustainability 2.3.1 Introduction 62 III 2.3.2 The organisational level 63 2.3.3 The meso level: an institutional perspective 71 2.3.3.1 Institutions and institutional theories 72 2.3.3.2 Institutional influences on corporate sustainability 78 2.3.3.3 Combined approaches to explain corporate 83 environmentalism 2.3.4 Circular business models: appropriateness of an institutional 89 lens 2.3.5 The UK’s circular economy field: a conceptual and graphical 93 representation 2.3.6 Part three summary 100 Chapter 3 Research Method 103 3.1 Introduction 103 3.2 Paradigms for the social enquiry 103 3.3 Selected research paradigm 108 3.4 Research strategy 111 3.5 Data collection and analysis techniques 118 3.6 Quality in qualitative and hermeneutical studies 128 3.7 Research ethics 132 3.8 Chapter three summary 134 Chapter 4 ‘FurnitureCo’ and ‘PlanksCo’ 136 4.1 Introduction 136 4.2 FurnitureCo 136 4.3 FurnitureCo and the circular economy: value proposition and 137 operating model 4.4 PlanksCo 146 4.5 PlanksCo and the circular economy: value proposition and 147 operating model 4.6 Chapter four summary 157 Chapter 5 ‘RailCo’ and ‘UniCo’ 159 5.1 Introduction 159 5.2 RailCo 159 IV 5.3 The UK’s railway and franchising systems 160 5.4 RailCo and the circular economy: value proposition and 161 operating model 5.5 UniCo 172 5.6 UniCo and the circular economy: value proposition and 172 operating model 5.7 Chapter five summary 182 Chapter 6 Results and Discussion 184 6.1 Introduction 184 6.2 Conceptualising FurnitureCo’s and PlanksCo’s business 184 models 6.2.1 FurnitureCo’s value capture 185 6.2.2 FurnitureCo’s value creation 186 6.2.3 FurnitureCo’s value delivery 188 6.2.4 PlanksCo’s value capture 189 6.2.5 PlanksCo’s value creation 191 6.2.6 PlanksCo’s value delivery 192 6.3 FurnitureCo’s and PlanksCo’s business models: emergence 194 and development 6.3.1 FurnitureCo and PlanksCo: organisational level 196 6.3.2 FurnitureCo and PlanksCo: institutional level 200 6.4 Conceptualising RailCo’s and UniCo’s business models 207 6.4.1 RailCo’s value capture 207 6.4.2 RailCo’s value creation 209 6.4.3 RailCo’s value delivery 213 6.4.4 UniCo’s value capture 214 6.4.5 UniCo’s value creation 216 6.4.6 UniCo’s value delivery 220 6.5 RailCo’s and UniCo’s business models: emergence and 222 development 6.5.1 RailCo and UniCo: organisational level 223 6.5.2 RailCo and UniCo: institutional level 228 6.6 Chapter six summary 233 V Chapter 7 Conclusion 235 7.1 Introduction 235 7.2 Originality and contribution 235 7.2.1 Conceptualising circular business models 239 7.2.2 Contextual influences on circular business models 246 7.2.3 Organisations investigated 251 7.2.4 Research method 252 7.3 Limitations, recommendations for future research and key 257 lessons References 268 Appendix I: An example of questions asked to interviewees 315 and of an interview transcript Appendix II: Summary of data collection activities 320 VI List of Tables Table 2A The ReSOLVE framework 30 Table 2B Originators of the CE thinking 36 Table 2C Key points in the BM literature 42 Table 2D Overview of the SBMs studies 52 Table 2E Categories and elements of circular BMs 54 Table 2F Review of case studies applying CE principles 55 Table 3A Methodological features of hermeneutics 123 Table 3B Summary of the research methodological features 127 Table 3C Trustworthiness and authenticity criteria 130 Table 3D Criteria for evaluating quality in hermeneutical studies 132 Table 4A FurnitureCo’s practices in relation to the ReSOLVE 146 framework Table 4B Benefits of PlanksCo’s boards 153 Table 4C PlanksCo’s practices in relation to the ReSOLVE framework 157 Table 5A RailCo’s practices in relation to the ReSOLVE framework 169 Table 5B UniCo’s practices in relation to the ReSOLVE framework 182 Table 6A A comparison and a conceptualisation of FurnitureCo’s and 194 PlanksCo’s BMs Table 6B Synthesis of FurnitureCo’s resource, capabilities and 197 organisational characteristics Table 6C Synthesis of PlanksCo’s resources, capabilities and 200 organisational characteristics Table 6D A comparison and a conceptualisation of RailCo’s and 222 UniCo’s BMs Table 6E Synthesis of RailCo’s resources, capabilities and 225 organisational characteristics Table 6F Synthesis of UniCo’s resources, capabilities and 228 organisational characteristics Table 7A Summary of the thesis contribution 256 VII List of Figures 2.1 A stakeholders map 50 2.2 Frameworks used for the conceptualisation of circular BMs 61 2.3 The UK’s circular economy field 100 3.1 Hermeneutic circles 111 3.2 Phases of the research 128 5.1 ACEs’ personal development pyramid 171 6.1 FurnitureCo’s value creation for a broader set of 187 stakeholders 6.2 FurnitureCo’s BM characteristics 189 6.3 PlanksCo’s value creation for a broader set of stakeholders 192 6.4 PlanksCo’s BM characteristics 193 6.5 Relevance of the sources of influences on the evolution of 206 FurnitureCo’s BM 6.6 Relevance of the sources of influences on the evolution of 206 PlanksCo’s BM 6.7 RailCo’s value creation for a broader set of stakeholders 211 6.8 RailCo’s BM characteristics 214 6.9 UniCo’s value creation for a broader set of stakeholders 218 6.10 UniCo’s BM characteristics 221 7.1 Overview of the research findings 255 VIII List of Appendices Appendix I An example of questions asked to interviewees 315 and of an interview transcript Appendix II Summary of data collection activities 320 IX List of abbreviations Abbreviation Definition ABR Action Based Research ACEs Area Champions for the Environment APMG All-Party Parliamentary Manufacturing Group APSRG All-Party Parliamentary Sustainable Resource Group ATOC Association of Train Operating Companies BEMS Building Energy Management System BEMSE Building Energy
Recommended publications
  • Prosperity Without Growth?Transition the Prosperity to a Sustainable Economy 2009
    Prosperity without growth? The transition to a sustainable economy to a sustainable The transition www.sd-commission.org.uk Prosperity England 2009 (Main office) 55 Whitehall London SW1A 2HH without 020 7270 8498 [email protected] Scotland growth? Osborne House 1 Osbourne Terrace, Haymarket Edinburgh EH12 5HG 0131 625 1880 [email protected] www.sd-commission.org.uk/scotland Wales Room 1, University of Wales, University Registry, King Edward VII Avenue, Cardiff, CF10 3NS Commission Development Sustainable 029 2037 6956 [email protected] www.sd-commission.org.uk/wales Northern Ireland Room E5 11, OFMDFM The transition to a Castle Buildings, Stormont Estate, Belfast BT4 3SR sustainable economy 028 9052 0196 [email protected] www.sd-commission.org.uk/northern_ireland Prosperity without growth? The transition to a sustainable economy Professor Tim Jackson Economics Commissioner Sustainable Development Commission Acknowledgements This report was written in my capacity as Economics Commissioner for the Sustainable Development Commission at the invitation of the Chair, Jonathon Porritt, who provided the initial inspiration, contributed extensively throughout the study and has been unreservedly supportive of my own work in this area for many years. For all these things, my profound thanks. The work has also inevitably drawn on my role as Director of the Research group on Lifestyles, Values and Environment (RESOLVE) at the University of Surrey, where I am lucky enough to work with a committed, enthusiastic and talented team of people carrying out research in areas relevant to this report. Their research is evident in the evidence base on which this report draws and I’m as grateful for their continuing intellectual support as I am for the financial support of the Economic and Social Research Council (Grant No: RES-152-25-1004) which keeps RESOLVE going.
    [Show full text]
  • Prosperity Without Growth? Prosperity the Transitionthe to a Sustainable Economy
    Prosperity without growth? The transition to a sustainable economy to a sustainable The transition www.sd-commission.org.uk Prosperity England 2009 0DLQRIßFH 55 Whitehall London SW1A 2HH without 020 7270 8498 [email protected] Scotland growth? Osborne House 1 Osbourne Terrace, Haymarket Edinburgh EH12 5HG 0131 625 1880 [email protected] www.sd-commission.org.uk/scotland Wales Room 1, University of Wales, University Registry, King Edward VII Avenue, Cardiff, CF10 3NS Commission Development Sustainable 029 2037 6956 [email protected] www.sd-commission.org.uk/wales Northern Ireland Room E5 11, OFMDFM The transition to a Castle Buildings, Stormont Estate, Belfast BT4 3SR sustainable economy 028 9052 0196 [email protected] www.sd-commission.org.uk/northern_ireland Prosperity without growth? The transition to a sustainable economy Professor Tim Jackson Economics Commissioner Sustainable Development Commission Acknowledgements This report was written in my capacity as Economics Commissioner for the Sustainable Development Commission at the invitation of the Chair, Jonathon Porritt, who provided the initial inspiration, contributed extensively throughout the study and has been unreservedly supportive of my own work in this area for many years. For all these things, my profound thanks. The work has also inevitably drawn on my role as Director of the Research group on Lifestyles, Values and Environment (RESOLVE) at the University of Surrey, where I am lucky enough to work with a committed, enthusiastic and talented team of people carrying out research in areas relevant to this report. Their research is evident in the evidence base on which this report draws and I’m as grateful for their continuing intellectual VXSSRUWDV,DPIRUWKHßQDQFLDOVXSSRUWRIWKH(FRQRPLFDQG6RFLDO5HVHDUFK&RXQFLO *UDQW1R5(6 which keeps RESOLVE going.
    [Show full text]
  • Circular Economy
    Circular Economy - Sustainable Materials Management A compendium by the International Institute for Industrial Environmental Economics (IIIEE) at Lund University Peck, Philip; Richter, Jessika Luth; Delaney, Kelly; Peck, Philip; Richter, Jessika Luth; Dalhammar, Carl; Peck, David; Orlov, Dmytro; Machacek, Erika; Gillabel, Jeroen; Nußholz, Julia L.K.; Wrancken, Karl; Whalen, Katherine; Modis, Konstantinos; Milios, Leonidas; Messing, Maria; Bocken, Nancy; Tojo, Naoko; Davris, Panos; Manshoven, Saskia; Sfez, Saskia; Lindhqvist, Thomas; Voytenko Palgan, Yuliya 2020 Document Version: Publisher's PDF, also known as Version of record Link to publication Citation for published version (APA): Peck, P. (Ed.), Richter, J. L. (Ed.), Delaney, K. (Ed.), Peck, P., Richter, J. L., Dalhammar, C., Peck, D., Orlov, D., Machacek, E., Gillabel, J., Nußholz, J. L. K., Wrancken, K., Whalen, K., Modis, K., Milios, L., Messing, M., Bocken, N., Tojo, N., Davris, P., ... Voytenko Palgan, Y. (2020). Circular Economy - Sustainable Materials Management: A compendium by the International Institute for Industrial Environmental Economics (IIIEE) at Lund University. (2021 ed.) The International Institute for Industrial Environmental Economics. Total number of authors: 23 Creative Commons License: CC BY-NC-SA General rights Unless other specific re-use rights are stated the following general rights apply: Copyright and moral rights for the publications made accessible in the public portal are retained by the authors and/or other copyright owners and it is a condition of accessing publications that users recognise and abide by the legal requirements associated with these rights. • Users may download and print one copy of any publication from the public portal for the purpose of private study or research.
    [Show full text]
  • Circular Economy Sustainability Scope
    Yr. 9 reading homework 1 https://en.wikipedia.org/wiki/Circular_economy Circular Economy A circular economy (often referred to simply as "circularity") is an economic system aimed at minimizing waste and making the most of resources. In a circular system resource input and waste, emission, and energy leakage are minimized by slowing, closing, and narrowing energy and material loops; this can be achieved through long-lasting design, maintenance, repair, reuse, remanufacturing, refurbishing, and recycling. This regenerative approach is in contrast to the traditional linear economy, which has a 'take, make, dispose' model of production Proponents of the circular economy suggest that a sustainable world does not mean a drop in the quality of life for consumers, and can be achieved without loss of revenue or extra costs for manufacturers. The argument is that circular business models can be as profitable as linear models, allowing us to keep enjoying similar products and services Sustainability Intuitively, the circular economy would appear to be more sustainable than the current linear economic system. Reducing the resources used, and the waste and leakage created, conserves resources and helps to reduce environmental pollution. However, it is argued by some that these assumptions are simplistic; that they disregard the complexity of existing systems and their potential trade-offs. For example, the social dimension of sustainability seems to be only marginally addressed in many publications on the circular economy. There are cases that might require different or additional strategies, like purchasing new, more energy efficient equipment. By reviewing the literature, a team of researchers from Cambridge and TU Delft could show that there are at least eight different relationship types between sustainability and the circular economy.
    [Show full text]
  • Prosperity Without Growth – Economics for a Finite Planet - Prof Tim Jackson
    Summary by Frank O’Kelly Prosperity without Growth – Economics for a Finite Planet - Prof Tim Jackson The question at the heart of this book is one of social justice. We need to challenge the assumption that the continued consumption growth without greater attention to equity and sustainability can really deliver prosperity for all. What does prosperity mean in a world of 9 billion people, within decades, living under the threat of climate change and resource scarcity? Our global ecological footprint is now 30% higher than the earth’s biological capacity to produce for our needs. Mankind seems to have disconnected itself from the natural world, economically, spiritually and mentally. Human society needs to change - its economics, its accounts, its implicit biases against natural capital (versus man made capital), against public wealth (versus private wealth) and against logic and less consumption (versus manic and more). Above all human society needs to change its relationship with nature to one of harmony and co-existence. What is growing? GDP = the annual marketed flow of final goods and services. More simply it is the measure of “economic activity” in a nation or region. Continued growth in GDP is not sustainable because; Prosperity without Growth Throughput = the metabolic flow of useful matter and energy from environmental, through the economic system and back to environmental sinks as waste. This is outgrowing the ecosystems that sustain it so past its peak Chapter 1 – Prosperity Lost A basic human concern is that we want things to go well. This includes a notion of continuity and the fact that my “prosperity” is intertwined with those around me.
    [Show full text]
  • Prosperity Without Growth: Economics for a Finite Planet / Tim Jackson
    Prosperity Without Growth — Tim Jackson 210x146mm trim format — Jacketed hardback — Spine width: 24.6mm ISBN 978-1-84407-894-3 PROSPERITY WITHOUT GROWTH WITHOUT PROSPERITY Is it time to re-think economic growth? ‘Business as usual is not an option.’ ‘The crisis doesn’t only make us free to imagine other models, another future, The debate has started. Read Prosperity without Growth and join the most Oliver James, author of Affluenza important conversation of our times. another world. It obliges us to do so.’ President Nicolas Sarkozy, Paris, ‘Prosperity without Growth’s hugely ‘Jackson goes after the complacency September 2009 encouraging and thrilling theme is that and dishonesty at the heart of contem- humanity can prosper without growth. porary politics, and provides a brilliant Is more economic growth the solution? Will it In fact there is no other way left to us.’ and compelling account of the crucial deliver prosperity and well-being for a global Robert Goodland, winner of IUCN importance of the growth debate.’ population projected to reach nine billion? Coolidge Medal of Honor 2008 Jonathon Porritt, CBE In this explosive book, Tim Jackson – a top sustainability adviser to the UK government – ‘Jackson’s book simply resets the ‘In the teeth of the economic crisis, makes a compelling case against continued agenda for Western society.’ Jackson has written the most important economic growth in developed nations. Bernie Bulkin, former Chief Scientist of BP book that could possibly be written now.’ Tim Jackson is Economics Commissioner on James Gustave Speth, Yale University PROSPERITY No one denies that development is essential for the Sustainable Development Commission, ‘This might well become as important poorer nations.
    [Show full text]
  • Remanufacturing: Key Strategy for Sustainable Development-A Review
    International Conference on Sustainable Growth through Universal Practices in Science, Technology and Management (ICSGUPSTM-2018), Goa, June 8-10, 2018 Remanufacturing: Key Strategy for Sustainable Development-A Review Dr Martand T.Telsang Professor Mechanical Engineering & Dean Academics, Sanjay Ghodawat University Kolhapur Abstract Remanufacturing enables a significant part of the value added to a product during its initial production to be retained. We cannot afford to dispose continually of strategically important materials in landfill sites or waste the energy associated with their processing. Remanufacturing is the process by which used products and assemblies are returned to their new and advanced state with minimum waste and expenditure on materials and energy. Parts that do not wear out are reused in a rebuilt product that incorporates the technological advances deemed necessary to ensure that repairs can be carried out in a timely manner and the item returned to functionality in an efficient manner. This review paper reports an overview of process of remanufacturing. Its need, contribution towards sustainability and lists the challenges in remanufacturing of products. Scope and benefits of remanufacturing has increased where industries have embraced new technologies for the restitution of components and enabled greater material recovery and even the retention in-house of capabilities that may have previously been outsourced. Remanufacturing has a high chance of failure when used to compete in markets where price is the only basis for competition, unless a low-cost source of labor is available. Key words: Remanufacturing, Reconditioning, Recycling, Circular economy, Sustainability. 1. Introduction Remanufacturing describes the process of disassembling products, cleaning, repairing or replacing parts, and then reassembling them to a good working condition.
    [Show full text]
  • TJ-CV-W-Recent-Publications-Sept
    Tim Jackson – Curriculum Vitae Tim Jackson MA, PhD, FRSA, AcSS E: [email protected] W: www.timjackson.org.uk Address: CUSP, University of Surrey, Guildford GU2 7XH, UK Short biography Tim Jackson is Professor of Sustainable Development at the University of Surrey. He has been at the forefront of international debates on sustainability for three decades and has worked closely with the UK Government, the United Nations, the European Commission, numerous NGOs, private companies and foundations to bring economic and social science research into sustainability. In addition to his academic work, he is an award-winning dramatist with numerous radio-writing credits for the BBC. Extended Resumé Tim’s current role at Surrey is Director of the ESRC Centre for the Understanding of Sustainable Prosperity (CUSP). CUSP is a multi-disciplinary research centre which aims to understand the economic, social and political dimensions of sustainable prosperity. It’s guiding vision for prosperity is one in which people everywhere have the capability to flourish as human beings – within the ecological and resource constraints of a finite planet. The work addresses the implications of sustainable prosperity at the level of households and firms; and eXplores sector-level and macro-economic implications of different pathways to prosperity. It pays particular attention to the pragmatic steps that need to be taken by enterprise, government and civil society in order to achieve a sustainable prosperity. Previous academic research From 2013 to January 2017, Tim held a Professorial Research Fellowship on Prosperity and Sustainability in the Green Economy (PASSAGE). From 2010 to 2014 he was Director of the Sustainable Lifestyles Research Group (SLRG), which aimed to develop evidence- based advice to policy makers about realistic strategies to encourage more sustainable lifestyles.
    [Show full text]