Managing the Transition Toward a Circular Economy: The Role of Firms in Realizing the Transformation

In the light of the continuously worsening climate crisis and society’s increasing awareness of the severe negative effects of our current economic system on the planet’s natural ecosystem, calls for a transition to a sustainable economic system have been becoming louder. Among the different approaches to realize such a transition, the concept of a circular economy has gained significant attention over the last years among practitioners, policy makers, and academics alike. A circular economy represents a fundamental departure from the prevailing linear ‘take-make-waste’ economic mode, as it aims to eliminate waste generation and minimize resource consumption by continuously looping materials back into the system. Realizing a circular economy requires a paradigmatic change in the way we structure and conduct economic activity. Consequently, firms play a central role in achieving this transition. Not only do firms need to adapt their own business activities and find ways to decouple value creation from resource consumption in an economically viable manner, but they also need to collaborate with each other to jointly transform value chains and industries. Given the magnitude of change, this transformation is considerably challenging to realize. On the firm level, pursuing circular economy-oriented innovations can be cumbersome for firms as they create tensions with established organizational structures. Beyond the organization, firms need to define new ways of working together to collaboratively reconceptualize established value chains. Yet, the dynamics and challenges associated with this transformation remain poorly understood. This dissertation aims to contribute to a better understanding of these dynamics, guided by the following research question: “How do firms engage to transform their own organizations and to collaboratively reshape economic activity within and across industries to realize the transition from a linear to a circular economy?” In four academic papers, this dissertation adopts different ...