Abstract
The circular economy is promoted as a contributor to sustainable development; however, the process of circular business model innovation remains under-explored to date, hindering its implementation. Dynamic capabilities research provides a theoretical perspective to explore how incumbent firms can innovate in rapidly changing environments. An abductive qualitative research is done through an exploratory multiple case study on 10 incumbents that implemented a circular business model innovation. We identify 26 practices, aggregated in 12 micro-foundations of the dynamic capabilities of sensing, seizing, and reconfiguring. By integrating the few empirical studies characterizing dynamic capabilities for sustainability-oriented business model innovation, we offer a comprehensive framework of 33 practices. This study proposes that the most relevant practices for circular business model innovation processes are adopting a lifecycle perspective, employing sustainability-oriented instruments, ideating sustainable value propositions, developing a sustainability strategy and culture, and engaging and coordinating stakeholders in the business ecosystem. We also suggest seven particularly relevant practices for long-term business model transformations (e.g., top management commitment), four for innovations focused on short and medium loops of the circular economy (e.g., early customer engagement), and four for long loops (e.g., business ecosystem coordination). This study corroborates and expands recent research on dynamic capabilities for sustainability-oriented innovation and provides practitioners with a set of 33 skills, processes, procedures, and activities to be prioritized to successfully innovate their business models for the circular economy.
| Original language | English |
|---|---|
| Pages (from-to) | 1308-1333 |
| Number of pages | 26 |
| Journal | Business Strategy and the Environment |
| Volume | 31 |
| Issue number | 4 |
| Early online date | 5 Dec 2021 |
| DOIs | |
| Publication status | Published - May 2022 |
Bibliographical note
Funding Information:The authors would like to thank Anna Diaz and Lukas Stumpf (Institute of System Sciences, Innovation and Sustainability Research, University of Graz) for being the second and third evaluators of the case study data. We would also like to thank the availability and valuable insights of the 16 interviewees. This project has received funding from the European Union's Horizon 2020 research and innovation program under the H2020 Marie Skłodowska‐Curie Actions Grant 765198. The financial support of the Austrian Federal Ministry for Digital and Economic Affairs, the National Foundation for Research, Technology and Development, and the Christian Doppler Research Association are gratefully acknowledged. The funding sources were not involved in study design, data collection or analysis, report writing, or decision to submit the article.
Publisher Copyright:
© 2021 The Authors. Business Strategy and The Environment published by ERP Environment and John Wiley & Sons Ltd.
Keywords
- best practices
- business model innovation
- case study
- circular economy
- dynamic capabilities
- micro-foundations
- sustainable business model
- sustainable development
