Strategic Management and the Circular Economy PDF
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Strategic Management and the Circular Economy In recent years, the Circular Economy (CE) has gained worldwide attention as an effective alternative economic system to the current take- make-waste model of production and consumption. As more and more firms begin to recognize the potential of this novel approach, the CE quickly moves from theory to practice and the demand for a coherent and structured strategic approach – one that companies can rely upon when commencing their circular journey – grows accordingly. Strate- gic Management and the Circular Economy aims to bridge the theory- practice gap by putting forward a detailed step-by-step process for analysis, formulation, and planning of CE strategies. Starting from a solid framework of easy-to-grasp constructs (key prin- ciples, business objectives and areas of intervention), the authors guide the reader through an understanding of how conventional tools for stra- tegic management can be re-programed under a CE perspective. To as- sist learning and encourage circular thinking, the reader is constantly prompted with examples of how forward-looking companies across industries and geographies are already applying circular strategies to future- proof their operations, boost innovation, penetrate new markets and secure customer loyalty. Dr Marcello Tonelli is the founder and Managing Director of Worl- Dynamics Pty Ltd, an organization that promotes sustainable develop- ment and green innovation. After obtaining his PhD degree in Business Strategy in 2009, Dr Tonelli worked with the Australian Centre of En- trepreneurship Research (ACE) in the fields of Social Innovation, Terri- torial Strategies, and Poverty Alleviation generating growing academic interest. He also practiced as a Certified Management Consultant and a Fellow of the Australian Institute of Management. Nicoló Cristoni is a sustainability professional operating at the inter- section of Environmental Stewardship, Sustainable Innovation and the protection of Human and Workers’ Rights. He is specialized in planning and executing responsible sourcing programs for multinational brands that are increasingly Circular Economy-inspired. Nicolò also provides technical support to international human rights organizations. Routledge Research in Strategic Management This series explores, develops and critiques the numerous models and frameworks designed to assist in strategic decision making in internal and external environments. It publishes scholarly research in all meth- odologies and perspectives that comprise the discipline, and welcomes diverse multi-disciplinary research methods, including qualitative and quantitative studies, and conceptual and computational models. It also welcomes the practical application of the strategic management process to a business world inspired by new economic paradigms. 1 Strategic Analysis Processes and Tools Andrea Beretta Zanoni 2 Strategic Management and the Circular Economy Marcello Tonelli and Nicoló Cristoni Strategic Management and the Circular Economy Marcello Tonelli and Nicoló Cristoni First published 2019 by Routledge 52 Vanderbilt Avenue, New York, NY 10017 and by Routledge 2 Park Square, Milton Park, Abingdon, Oxon, OX14 4RN Routledge is an imprint of the Taylor & Francis Group, an informa business © 2019 Taylor & Francis The right of Marcello Tonelli and Nicoló Cristoni to be identified as authors of this work has been asserted by them in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. Library of Congress Cataloging-in-Publication Data Names: Tonelli, Marcello (Economist), author. | Cristoni, Nicoláo Fabrizio, author. Title: Strategic management and the circular economy / Marcello Tonelli and Nicolâo Cristoni. Description: New York : Routledge, 2019. | Series: Routledge research in strategic management Identifiers: LCCN 2018035273| ISBN 9781138103634 (hardback) | ISBN 9781315102641 (ebook) Subjects: LCSH: Sustainable development. | Strategic planning. Classification: LCC HC79.E5 T66326 2019 | DDC 658.4/012—dc23 LC record available at https://lccn.loc.gov/2018035273 ISBN: 978-1-138-10363-4 (hbk) ISBN: 978-1-315-10264-1 (ebk) Typeset in Sabon by codeMantra This book is dedicated to our awareness of interconnectedness and the hope for a better future. Special thanks to WorlDynamics Pty. Ltd. for providing the necessary resources [www.worldynamics.org] “As mankind is overusing many natural ecosystems, new and rebalanced ways of doing business are needed. Moving towards a circular economy could offer a solution. Tonelli and Cristoni present a comprehensive framework to work on this solution from a strategic management perspective. This book is a must read for scholars and practitioners interested in actionable frameworks, business models, and strategic approaches to developing circular businesses”. Florian Lüdeke-Freund, Chair for Corporate Sustainability, ESCP Europe Business School – Berlin, GERMANY “Over the last decades our awareness of the limits of the use of natural resources has become more and more embedded in evidence. However, only awareness cannot solve this. What we need is a course of action to turn this around. That´s what is offered in this book. The idea of the Circular Economy is both timely and rather straightforward, but its application comes together with many challenges and imperfections. The beauty of this book is that it embraces these difficulties in order to separate the rhetoric from substance. This proves to be very helpful in creating practical guidance for the application of the principles of the Circular Economy”. Andre Nijhof, Professor Sustainable Business and Stewardship at Nyenrode Business Universiteit – Enschede Area, THE NETHERLANDS “Strategic Management and the Circular Economy opens with Victor Hugo’s eponymous quote ‘you can resist an invading army; you cannot resist an idea whose time has come’. With the increasing focus of neo- liberal governments on downsizing, the role of sustainability stewardship is increasingly moving towards the private sector. This book powerfully makes the case for enhanced sustainability management through the circular economy model in shaping the actions we need to take to preserve our own future. It presents easy to understand business models and strategies that will help to achieve the circular economy key principles of improved waste and resource sustainability in a world of finite resources and an ever-growing population”. Michele John, Associate Professor, Director Sustainable Engineering Group, Curtin – Perth, AUSTRALIA “The Circular Economy is a potential key driver for sustainable development. The concept has recently gained widespread uptake in business, academia and policy. Strategic Management and the Circular Economy provides an engaging overview for academics and practitioners wanting to understand the concept of the Circular Economy, as well as potential strategic approaches to start the transition from a linear take- make-waste to a Circular Economy paradigm” Nancy Bocken, Professor in Sustainable Business Management & Practice, Lund University (IIIEE) – Lund, SWEDEN “Nowadays circular economy has become a top priority in the political agenda of most developed countries. Many initiatives have been put forward by governments to switch to a circular model, but there is still a poor understanding on how to support companies in adapting to the new economic system. This book provides a thorough analysis of how companies can effectively combine CE principles with business objectives and an exhaustive list of concrete examples from different countries and sectors is shared. All the information is presented from the realistic perspective that we cannot demand companies to radically change their business models and processes from one day to the next, and this aspect represents one of the most important added values of the book. The authors have succeeded in producing a helpful and clear guide for companies and policy makers, while keeping scientific rigour and solidity in their approach”. Michelle Perello, CEO Consulta Europa Projects and Innovation – Las Palmas de G.C., SPAIN “Strategic Management and the Circular Economy (CE) has an implication for the academia, practitioners and policymakers alike as it offers theoretical approaches as well as practical examples. It starts by arguing why enterprises can no longer rely on the linear economic paradigm, before explaining how circular economy as a strategic concept works. Through a series of in-depth and original discussions the book offers a rich contribution to companies, highlighting their interactions with stakeholders at various levels of society for the creation of a better future for us all”. Lara Johannsdottir, Professor, Environment and Natural Resources, School of Business, University of Iceland – Reykjavík, ICELAND “This is an inclusive, informative and appealing book on the complicated subject of the circular economy and strategic management. The way the circular economy is explained to replace the produce- use-dispose approach and to bring this concept into reality through strategic processes, policies, business models, and technologies is amazing. The book has not only highlighted the fruits of the circular economy, as repeatedly done in earlier books but rather practically demonstrated how one nation or society can implement the concept of circularity in its day-to-day activities and so boost its socio-economic and cultural development. Undoubtedly, this book is a must-read for all professions including academics, managers, engineers, scientists, researchers, policy and decision makers. I am very confident this book will have a positive and constructive impact in our understanding and learning of how to move ahead with this sustainable economic approach, in which waste becomes a valuable resource”. Abdul-Sattar Nizami, Head of Solid Waste Management Unit, Center of Excellence in Environmental Studies at King Abdulaziz University – Jeddah, SAUDI ARABIA “The book is an engaging and stimulating reading on the circular economy paradigm, which has gained momentum in recent years. On the one hand, it clearly and thoroughly explains how the adoption of a circular economy framework can have positive implications not only on the environment (e.g. saving scarce resources), which is what most people would expect, but also on society (e.g. meeting the growing needs of the middle-class) and on the economy (e.g. making industrial processes more cost-effective). On the other hand, the authors, while emphasizing the appeal and elegance of what could be described as a win-win approach, do not shy away from the complexities that the implementation of a circular economy model would entail. Indeed, after defining a circular economy theoretical framework, they set out a new and innovative methodology to allow practitioners to integrate such framework with more traditional strategic tools”. Matteo di Castelnuovo, Director of Master in Green Management, Energy and CSR, Universita` Bocconi – Milan, ITALY Contents List of Figures and Tables xv Preface xvii Acknowledgements xix PART I An Overview 1 1 The Challenges of the Produce-Use-Dispose Model 2 1.1 Introduction 2 1.2 Exceeding Planetary Natural Thresholds 4 1.2.1 Boundary: Climate Change 6 1.2.2 Boundary: Loss of Biosphere Integrity 7 1.2.3 Boundary: Changes to Biogeochemical Flows –Nitrogen and Phosphorus 8 1.2.4 Boundary: Freshwater Use 8 1.2.5 Boundary: Land Use Change 8 1.2.6 Boundary: Release of Novel Entities 9 1.2.7 Boundary: Atmospheric Aerosol Loading 9 1.2.8 Boundary: Ocean Acidification due to Fossil Fuel CO 9 2 1.2.9 Boundary: Loss of Stratospheric Ozone due to Chlorofluorocarbons (CFCs) 10 1.3 Scarcity of Raw Materials and Price Volatility 10 1.4 Rising Middle-Class Population 13 1.5 Structural Inefficiencies of the Current Economic Model 15 1.6 Conclusions 19 2 An Introduction to the Circular Economy 27 2.1 Introduction 27 2.2 Biosphere and Technosphere Products 33 2.3 Technological, Regulatory, and Social Factors 36 2.4 Conclusions 38
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