Abstract
Circular entrepreneurship is becoming a new, promising reality, in the manner of needed radical paradigmatic change in the era of Anthropocene. Circular entrepreneurs intend to create social and environmental value while they build financially viable businesses. They are embedded in multiple institutionalised value systems that they are expected to adhere to. Those institutionalised systems provide circular entrepreneurs with different, in many cases, contradictory norms, values and guiding principles. Substantial amount of research has been done to date to examine the impact of institutions on entrepreneurial endeavours. And yet, research lacks sufficient insights into how circular entrepreneurs engage with the institutional structures in designing business models on a financially feasible ground while creating social and environmental value. To address this, this paper investigates how circular entrepreneurs respond to the value systems of surrounding institutions in business modelling and how two fundamental aspects of embeddedness, namely resource integration and value cocreation, are achieved within a circular business model that is coherent in itself and with the entrepreneur's ambitions. Both the institutional context and the institutional logics surrounding entrepreneurs are examined to comprehend the surrounding institutional systems more in-depth and extensively. By analysing a longitudinal in-depth case study, this article aims to develop better insights into circular business modelling and underlying mechanisms of embeddedness. The case is a born-circular small cidermaker in Cornwall (UK), namely Wasted Apple. The findings show that the circular entrepreneur is surrounded by dominant normative institutions forming the principles of business model design. circular entrepreneurs mark fidelity to the institutional norms to obtain a range of microcompetencies and to manage integrated hybrid tensions within the value creation system. And therefore, a circular business model is a more holistic and inclusive structure as compared to a typical conventional linear business model. And yet, paradoxically embeddedness facilitates business survival but hinders strategic business planning as well as business profitability and growth.
Highlights
Entrepreneurship has been in the spotlight as a solution to ecological and social problems (Gregori et al, 2019; Urban 2019)
This paper investigates how circular entrepreneurs (CENs) respond to the value systems of surrounding institutions in the business modelling process and how two fundamental aspects of embeddedness, namely resource integration and value cocreation, are achieved within a circular BM that is coherent in itself and with the entrepreneur’s ambitions
The case study shows that understanding a BM innovation in the circular economy (CE) context requires a broader perspective to be adopted to include the institutions that the circular entrepreneur is embedded within
Summary
Entrepreneurship has been in the spotlight as a solution to ecological and social problems (Gregori et al, 2019; Urban 2019). Circular entrepreneurship literature asserts that multiple value creation could be achieved through business model (BM) innovation (Cullen and De Angelis, 2021). The innovative BM design is dynamic in its nature with the ability of value cocreation in different institutional settings. Research on how circular entrepreneurs (CENs) develop their ventures, and respectively their BMs, that is coherent in itself and with the entrepreneur’s aspirations, Gregori et al, 2019; Teece, 2010; Vaskelainen and Münzel, 2018; Zott et al, 2011), how CENs design BMs to manage hybrid tensions (Cherrier et al, 2018; George and Bock, 2011; Stubbs, 2017) and to cocreate value with Research on how circular entrepreneurs (CENs) develop their ventures, and respectively their BMs, that is coherent in itself and with the entrepreneur’s aspirations, (e.g. Gregori et al, 2019; Teece, 2010; Vaskelainen and Münzel, 2018; Zott et al, 2011), how CENs design BMs to manage hybrid tensions (Cherrier et al, 2018; George and Bock, 2011; Stubbs, 2017) and to cocreate value with
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