Authors: Agneta Sundstrom; Akmal S. Hyder
Popularity, and demand on the circular economy has increased due to environmental, social and economic reasons. Circular economy is often carried out as projects to integrate new ideas and thoughts into the developing process. Flexible nature of the projects encourage innovation but also entail difficulty with internal and external coordination. A circular economy aims to minimize waste and make maximum use of resources. The firms usually see the circular economy projects as any other organizational activities and therefore cannot comprehend what hinders and resource constraints projects might encounter. The situation is further complex when SMEs engage in circular economy and try to minimize resource input, waste, emission and energy leakages by slowing, closing and narrowing energy and material loops through long-lasting design, maintenance, repair, reuse, remanufacturing, refurbishing, recycling and upcycling (Geissdoerfer et al., 2017 Spring and Araujo, 2017). Studies on circular economy are gradually coming up but no study, to our knowledge, has yet tackled how SMEs deal with institutional and organizational difficulties in realizing circular economy ideas. We assume that a functioning coordination is necessary with internal and external actors to communicate the ideas and gain legitimacy and access to the required resources. Nyuur et al (2018) observe that SMEs heavily rely on business and political networks as an important competitive strategy to overcome their limitations and succeed in the intensively competitive and increasingly turbulent environment. Approach to circular economy is demanding in the sense that it deals with innovativeness, exposes to both internal and external challenges and needs to solve several unresolved issues and persuade different institutions, organizations and policy makers. Institutional theory is concerned with how firms and groups secure their positions and legitimacy, by confirming the rules and norms of the institutional environments in which they operate (Scott, 2007 Bell and Cooper, 2018). This study applies institutional theory as the starting point and analyzes how SMEs interact with the partners to achieve the goal of circular economy.
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