Evaluation of compatibility of design methods for circular business models: : A study of Swedish companies

Abstract: Industrialization and globalization of companies has promoted fast, easy and profitable business solutions. A linear business model (LBM) is seen as the most common way to do business. However, recent studies have enlightened how LBMs are detrimental to the health and biological cycles of the earth and its inhabitants. To prevent this, circular business models (CBM) are being introduced as a feasible while still profitable solution. CBMs are defined by Oghaze & Mostaghel, (2018), as the “…rationale of how an organisation creates, delivers, and captures value with slowing, closing, or narrowing flows of the resource loops”, as they base their business on products and services designed to close or slowing the resource loops, decreasing the overall need of virgin resources.  However, to make these major changes in the current way of designing products and services has to be made, taking into consideration the change in design objectives from a linear to a circular model. Today, there are many circular design methods (DM) developed by academia to aid designers in designing sustainable products and services, however, the uptake of such DMs in the industry is quite low. Such a low level of uptake is often due to a poor fit between the DM and the context it is adopted in, which does not aid its seamless integration in existing processes.  Therefore, this research aims to identify DM characteristics that will aid industries to be adopted or adapted by companies transitioning towards CBMs. To do so, three research questions were developed: i) What are the most critical internal and external drivers in a company that enable the successful adoption of a circular design method?  ii) What are the contextual barriers that companies encounter when adopting or adapting circular design methods? iii) How can the design method adopted or adapted be evaluated to improve their implementation in a company? To answer these research questions, a survey was initially carried out, and subsequent interviews were conducted amongst participants of five different companies from various sectors and expertise. The survey and interviews were grounded in previous research concerning types of CBM and different types of barriers and drivers influencing the adoption of circular DMs.  The result from the survey indicates that the ability to make trade-offs when confronted with sustainability aspects, management commitment to a CBM, good communication and sharing of environmental knowledge, both through different departments and with external actors like suppliers, as well as allocating resources such as time, personnel, funds, and having clear business incentives are needed to promote the use of circular DMs. From the interviews, it was also found that barriers to the effective use of DMs are lack of environmental knowledge throughout the supply chain and wrong identification of actors in the supply chain as well as limited communication with external actors. Furthermore, the research revealed several characteristics of the DMs such as simplicity, flexibility and informativity need to be adapted to leverage and overcome the identified contextual drivers and barriers respectively, for their successful deployment within the companies.