Circular Knowledge Creation : A case study of knowledge creation processes within denim companies striving towards circularity

University essay from Högskolan i Borås/Akademin för textil, teknik och ekonomi

Abstract: Background – Circular business models, CBMs, are an emerging topic of interest within the textile and clothing, T&C, sector. They provide a new framework to tackle current environmental and social issues by redesigning a linear model previously base on the assumption of endless availability of fossil fuels and other natural resources. CBMs change these underlying assumptions in order to be regenerative and waste-less. A company´s knowledge has to be aligned with the overarching paradigm and assumptions that guide the business model, hence, the process of creating new knowledge to sustain this shift, appears to be essential. Knowledge creation enables businesses to continuously adapt to new contexts and prevent them from becoming obsolete. As such, it constitutes an enabler to develop the internal capabilities of companies to innovate. Purpose - This study is focused on understanding how knowledge is created within T&C companies in the shift from a linear business model to a circular one. It is of interest for the study to uncover the ways in which knowledge about circularity is created and translated into business practices. Further, it also expects to explore the companies’ main internal barriers identified in this process. Methodology – The research was conducted through a single case study with an abductive approach, building on the theoretical perspective of Nonaka and Takeuchi’s knowledge creation theory and the SECI model for knowledge conversion. Semi-structured interviews with Dutch denim company employees were the basis for collecting primary data, supplemented by secondary data gathered through archival review. The data was analysed qualitatively through thematic content analysis. Findings – Results show that knowledge creation is enabled by personal motivation, company focus on circularity and long-lasting business relationships. Several knowledge creation practices related to the dimensions of socialisation, externalisation, combination and internalisation are identified, while different levels of process and knowledge complexity can be observed within each dimension. Internal barriers hindering circular knowledge creation relate to the complexity of circular concepts, individuals´ time, personal interest and previous knowledge on the topic. System-oriented internal barriers relate to finance, scale and company focus. Further, the role of regulations, as an external system-oriented barrier, is considered of relevance for this research. Practical implications & Research limitations – This thesis creates new insights into a relatively unexplored area, knowledge creation processes in the context of CBMs. Further the specific delimitation to the denim segment within the T&C sector, shares experience and guidance with practical implications for knowledge management, from companies within a segment which has a high degree of product and process innovation compared to other T&C segments.

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