-Current CBM's are focusing on product life extension
-Circular economy creates value for the company -Industry-related drivers and barriers affect the circulation of materials
5 CONCLUSION AND DISCUSSION 5.1 Summary of the results
Circular business models are gaining attraction among actors’ interest to move towards sustainable and competitive economy. Despite the benefits and attraction, the models have acknowledged to be difficult to implement to practice (García‐Quevedo, Jové‐Llopis &
Martínez‐Ros, 2020). Prior research has noted business experimentation’s important role when accelerating the transition towards CE (Aminoff & Pihlajamaa, 2020; Bocken, Schuit
& Kraaijenhagen, 2018c; Konietzko et al., 2020a). The aim of BME is to learn about business models with minor risks and low resources. Experimentation is shown to improve the action and decision-making process towards sustainability through connective learning with stakeholders (Bocken et al., 2018c; Konietzko et al., 2020a). To transition towards CBMs, companies need to reorganise their linear business models enabling systems. There is a need to redefine with who and how companies distribute value, and the changing role of network (Bocken & Antikainen, 2018).
In this research, I was examining how SMEs companies are experimenting CBMs in collaboration with interorganizational parties. The research was executed in order to gain information about the experiences and to connect already existing research literature.
Theoretical framework pointed out the importance of shared values and motives when planning collaboration. Prior research is noted to be lacking research on the CBME process itself to gain understanding about the content and types of participants. Research has as well been acknowledged lacking descriptions about the role of network and stakeholders in the experimentation process of CBM’s (Bocken & Antikainen, 2018; Bocken & Snihurc, 2019; Bocken et al., 2019; Konietzko et al., 2020a). As the value capturing from the stakeholder point of view has been pointed out, the collaborative experimentation has not been acknowledged in prior research. The purpose of this study was to deepen the current understanding how SMEs experiment circular business models together with their external network. The set research question for this work was ‘How are organizations experimenting circular business models with external partners?’. Sub-questions of ‘What factors have been seen supporting the collaboration in CBME?’ and ‘How CBME has been
experienced among SMEs?’ were used to emphasize the important features emerged from the literature and to present more in-depth understanding of the topic.
5.2 Key results
This study contributes to the prior research by creating a deeper understanding of the joint experimentation process and value delivery. The experimentations perceived to be focusing on the value proposition (desirability) and value creation and delivery (feasibility) of the CBMs whereas the CBMEs were noted to be focusing on cycling, extending, and intensifying strategies (Figure 6). The experimentations were focusing servitization, as the experimented models were offering product-as-service, maintenance, and recycling services. This finding is similar to Geissdoerfer et al.’s (2020) findings related to cycling, extending and intensifying CBM strategies. Collaboration was implemented together with schools and subcontractors. The first experimentation project was seen focusing on the intensifying of the product’s use phase by creating a product-service system. The second experimentation project with the extending strategy combined to intensifying strategy, aimed for resource loop extension with maintenance and repair services. The product lifecycle extending services were offered inside a concept, which was utilizing intensifying strategy with sharing model. As this particular model was perceived testing all three elements; desirability, feasibility and viability, the experimentation being pilot was questioned. However, since it was noted including iterative and fast-phased learning cycles, it can still be considered as an experimentation (Geissdoerfer et al., 2020). The third experimenting with cycling strategy was seen experimenting with business model, which advanced the material and energy recycling within the system through reuse and remanufacturing. Value proposition was created by take-back model, which was enabled by collaboration (Bocken et al., 2016; Geissdoerfer et al., 2020; Konietzko et al., 2020a).
Two of the interview companies noted not being part of CBME in collaboration. CBMs were perceived novel to the companies, thus experimentation was not seen topical at this point. Experimentation itself was familiar to the companies through product and brand development. Based on the interviews technical barriers related to the CBMs and CBME were acknowledged. In prior research this finding has been related to SMEs when transitioning to CE (García‐Quevedo, Jové‐Llopis & Martínez‐Ros, 2020; Rizos et al,
2016). As the collaborative experimentation has not been acknowledged in prior research, this study can be noted to be contributing to this specific research gap by conducting a delimitation to unite the literature beneficial for this specific research as well as providing empirical research results.
Figure 6. Key findings of the research were emphasizing iterative nature of CBME and value-based drivers.
This study is also seen contributing to the descriptions of the role of network and stakeholders in the experimentation process of CBMs (Bocken & Antikainen, 2018;
Bocken & Snihurc, 2019; Bocken et al., 2019; Konietzko et al., 2020a) as social and cultural dimensions were identified as drivers for the CBME in interorganizational collaboration. These drivers are acknowledged to be in alinement with prior research in many aspects. Shared values have noted to be supporting factors for the success of CBME in collaboration. Setting goals and a willingness to take risks emphasize the creation of a shared vision for the project. This, in turn, is perceived as a positive factor in advancing the project from the planning stage to the start of the project. The main challenge with the collaboration was identified to be the lack of communication between the participants,
which is known also based on the prior research to be a common challenge among collaboration organizations (Brown et al., 2019; Konietzko et al, 2020b). Based on this research, BME was acknowledged to require adequate resources such as time and authority to further the project when needed. From the resources available research pointed out the human resources to be crucial for collaboration between SMEs. SMEs were noted to have few employees, which means employee participation in several projects at the same time.
The time available was also considered to have an effect on the start or cancellation of projects among SMEs. These findings are in alignment with prior research (Brown et al., 2019; Chesbrough, 2010) as the use of resources and managerial rights have been noted to keep an eye on when planning collaboration among network or stakeholders. Prior research has perceived the multiple simultaneous projects to be large company related issue in experimentation and time consuming (Bocken et al., 2017) whereas based on this research, multiple simultaneous projects are noted causing issues among SMEs as well.
This study has contributed to prior research by identifying with who and how companies distribute value, and the changing role of network (Bocken & Antikainen, 2018) as the schools and subcontractors were identified as main collaborators among interviewed SMEs. Also, the participation to the projects were noted to be important in order to expand the network and resources. The results brought up the importance of a written contract when experimenting in collaboration. The contracts were noted to simplify the roles, decision-making process and reducing the changes for possible conflicts during the project as the obligations and expectations were verbalised as part of the conclusion of the contract.
The advantages of contracts are acknowledged also in prior research as well (Brown et al., 2019; Konietzko et al, 2020b). Whereas the written contract was found important, the findings did not emphasize challenges related to creating collaborative contracts, contrary to prior research (Brown et al., 2019). Prior research has perceived the collaboration having an intensifying effect to the engagement with external and internal stakeholders (Bocken et al., 2018c). Due the amount of collaboration implemented with subcontractors; this finding made by Bocken et al. (2018c) can be questioned in this research. Due the role of subcontractors, the approach of ecosystem can be excluded as the connection between subcontractors and interviewed organization could be seen more to reassemble networking
relationship. The change of the subcontractor would not be affecting the experimentation processes’ other actors and their roles (Brown & Keast, 2003; Geissdoerfer et al., 2020).
Findings highlight the conflict of the expected flexibility during the experimentation process in collaboration in relation to the significance of contract, which has not been noted in prior research to my best knowledge. The expected flexibility in the process was able to be related to the iterative nature of CBME. Based on my research, as the concept of CBM is considered novel, the goal setting for the experimentation can be perceived challenging.
The reported changes in the experimented concepts were seen related to the expected flexibility in the process and the novelty of the experimented CBMs. The changes in the experimented concepts were also reported common. Fischer and Pascucci (2017) are known to have obtained similar results in their studies as they have reported goal setting in CE related interorganizational collaboration to be more about process improvements than results themselves.
The challenge of early adopter was perceived familiar to CBM actors as proven, experimented models were often seen set aside to wait for demand to appear. This founding can be related to the previous studies, which have identified a need for multiple simultaneously used CBMs to create value for business, in the absence of a viable model (Pederson et al., 2019). The challenge of early adapter is related based on this research to arisen motivation to raise awareness among other actors and consumers, as an influencer to create more desirability for the proven models.
This study noted the interviewees questioning the stakeholder and consumer motives during the process as the expressed desirability of the models was not seen correlating with the viability of the model. The consumer perspective has been noted is prior research to be needing further research to help the CE strategy implementation (Kirchherr et al., 2017) which could increase the understanding of the factors related to this correlation better.
Based on the findings, questioning stakeholder motives and interest towards the sustainability and CBMs, can be associated with the partner selection and goal setting of the experimentation process as shared values are known based on the prior reseaxh to be crucial for the success of the project (Brown et al., 2019; Konietzko et al, 2020a; Konietzko et al, 2020b). This research contributes to the research field by offering new knowledge
about the CBME process, types of participants and the meaning of the collaboration contracting. The findings are offering a description how SMEs are experiencing the CBME in collaboration in the context of textile industry.
5.3 Managerial implications, limitations, and future research
Managerial implication can be given on the organizational level. Firstly, SME organizations should be considering the resources available when planning collaboration between two or more actors. As employees can be working on multiple projects simultaneously, it can cause problems with project scheduling which can be causing cancellations due to project overlaps. Secondly, collaborating actors should have an open conversation about their goals and vision for the collaboration to get a mutual acknowledgement what has been wanted from the project. The shared vision and goal are detected to support the project’s probability to success. Thirdly, the set goals for the project should be considered more as guidelines than the target for the project. When talking about CBME, the process is considered to be iterative. The purpose of the experimentation is to experiment the company’s or stakeholders’ expectations in relations to the existing environment.
The research limitations are mostly related to the quality of the collected data. Thirty-three companies were sent a request for the interview, which five companies accepted the invitation and three replied that they did not have experience about CBME in collaboration, thus they did not want to use their resources for the interview. Six companies declined the interview due the lack of resources to use for the interview. As the number of participants can be considered to be rather low, the results cannot be generalized but can be seen as a glance to the industry’s experiences (Eriksson & Kovalainen, 2016). Other limitation is related to the used concept during the interviews. Interviewees could have asked to define the concept of experimentation and how they perceive it in order to simplify the analysis process of the collected data. For further studies, it could be beneficial to the research field to focus on the conflict of the collaborative contracting in relations to the flexibility needed in the iterative CBME. In addition, the CBME in interorganizational collaboration could be research on other industries to gain more in-depth understanding of the experimentation process among SMEs.
5.4 Trustworthiness of the research
To ensure the quality of the research, the researcher must evaluate the research through the whole research process. The evaluation criteria are often dependent on the used methodology. The qualitative and quantitative research evaluation are known to be using same concepts and terminology, but it should be acknowledged that the concepts are having different meaning depending on the method (Eriksson & Kovalainen, 2016).
Classic criteria for a good-quality research are including reliability, validity, and generalizability. Reliability is describing the consistency of the research in a way that other researchers can remake the research. It is used more often to evaluate quantitative methods since qualitative research data, interviews, and observations, is often difficult to replicate.
In this work, I have aspired to describe my processes as detailed as possible to gain reliability of the work. In qualitative research the validity of the research, also known as internal validity, is referring to the trustworthiness of the report and descriptions which can be proven by using induction, triangulation, or member check (Holloway, Wheeler &
Holloway; Eriksson & Kovalainen, 2016). Induction is combining the analysis after coding and the process of the data integration to the theory. Triangulation is a process of using multiple perspectives, such as methods, data sources or theories, to clarify the findings.
Member check lets the interviewees to see the interpreted data and to give comments on the interpretation. (Holloway, Wheeler & Holloway; Eriksson & Kovalainen, 2016). For this master’s thesis I conducted induction in the chapter 5.2 Key results.
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