A Boundary Work approach to develop Circular Business Model Networks

This paper introduces a boundary work tool to develop multi-actor networks for circular business model innovation. A boundary work lens helps to improve the understanding of the required organizational boundary changes that lie at the very heart of circular business model innovation (Brehmer et al., 2018; Velter et al., 2017). The boundary work approach understands business model innovation as a dynamic process of change, innovation and implementation of internal business model components and the external environment (Amit & Zott, 2012; Chesbrough, 2010; Teece, 2018). Circular business model innovation in particular involves boundary changes as firms must orchestrate and coordinate resources and activities across multiple actors to narrow, slow and close material streams in pursue of sustainable value (Bocken & Antikainen, 2019; Lüdeke-Freund et al., 2018). Boundary work for circular business model innovation therefore implies an iterative process of exploring, brokering and changing organizational boundaries on different organizational levels and across multiple actors. These boundary changes are not self-evident, and boundary dissonances can be difficult to align due to conflicting normative, strategic and/or instrumental foundations, such as value creation logics or prevailing business models (Snihur & Tarzijan, 2018; Solaimani & Bouwman, 2012; Zott & Amit, 2010). Simultaneously, boundary alignment from particular actors can be critical for establishing circular networks. Here, circular business model networks are defined as networks of independent but interdependent stakeholders who can affect or are affected by the network’s practices (Antikainen & Valkokari, 2016; Freeman, 1984; Lockett et al., 2011).

Few tools illuminate and address the interdependence between actor boundaries involved in cross-sectoral, circular business model innovation. Hence, we pose the research question of this paper as follows: How can businesses apply a boundary work perspective to develop circular business model networks?

The tool developed in this paper intends to support businesses to explore, negotiate and develop multi-actor networks for circular business model innovation. Exploring and negotiating actor boundaries on normative, strategic and instrumental levels helps to understand the required organizational boundary changes, (drivers of) boundary dissonance and informs boundary brokering. A previously developed boundary work framework for sustainable business model innovation informs the literature review on circular business model innovation and circular business model experimentation. In collaboration with practitioners, the circular business model network tool (abbreviated as ‘the circular network tool’) is being co-developed and applied in a workshop. The improved tool will be further applied in a number of cases, which leads to the final tool presented in this paper. The application of the circular network tool in practice aims to support: (1) the systematic consideration of boundary changes in the multi-actor network, (2) exploration of strategic choices for internalizing externalities and (3) the generation of business models that create an improvement perspective for all critical actors. The circular network tool helps developing dynamic capabilities and facilitates learning and experimentation (McGrath, 2010; Rindova & Kotha, 2001; Teece, 2018). The tool is relevant for businesses engaging in circular economy, but holds relevance for NGOs and policy makers which aspire a more sustainable and circular industry as well.