A systemic logic for circular business models

While social and circular business models (CBMs) are viewed as important devices to improve humanity's wellbeing, their adoption rates have been somewhat disappointing. The CBM literature often contributes these low adoption rates to innovation failures of firms and redirects social and circular business models toward a stronger profit-orientation. Much of this work is grounded in a Porterian value chain logic that, arguably, overemphasizes economic goals at the expense of social and sustainability goals. In contrast, this study promotes an institutional perspective that shows that all business practices are part of larger societal and ecological systems, so that a real transition toward sustainability demands joint institutional alignment processes which balance the adaptive tensions between social mission, environmental stewardship and economic growth. We systematically develop five fundamental propositions for a new, institutional CBM framework and, based on these fundamental propositions, discuss an agenda for future research.

Automated summary

The study highlights the importance of institutional alignment processes in balancing social mission, environmental stewardship, and economic growth for a real transition towards sustainability. The development of a new institutional CBM framework is proposed to address these challenges and guide future research agendas.