How sustainable entrepreneurs balance business and saving the world. A multiple case study of tensions and management strategies of circular business ventures in Finland.

Abstract

The world is facing numerous environmental and social challenges, including climate change and the depletion of natural resources. In order to create a more sustainable future, the concept of circular economy has been raised as an alternative to the current linear ‘take, make, waste’ economy. In the creation of such an economic system, sustainable entrepreneurs and their ventures that aim to slow, close, or narrow resource loops act as key drivers. Despite the potential, circular economy has been slow to gain traction and impact the wider economic sphere.

This study aims to shed light on this problem by looking at the implementation of circular business models, and the tensions that emerge in the case companies’ quest to create so-called triple bottom line value, in other words, as they strive to meet their social, environmental, and economic goals. Such tensions are continuously present in an organization with hybrid goals, which leads companies having to face and manage these tensions regularly. Understanding the tensions and how they can be managed, can accelerate our transition to a circular economy.

This thesis focuses on identifying tensions emerging in circular business ventures through a business model lens and then seeking to understand what are the key strategies the leaders of these circular ventures use to manage the tensions. The thesis aims to provide structure to these tensions and the management strategies and business model innovations, by connecting these to the three key elements of a business model: value proposition, value creation and delivery system as well as value capture. It provides an understanding of tensions occurring and recurring in building a circular venture of any circular core mechanism: closing, narrowing, or slowing resource circles. Finally, the thesis gives an overview of opportunities and gaps as well as future research areas.