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Achieving circularity is a distant dream: entrepreneurial barriers to circular business models in SMEs of emerging economies

Akash Saharan (Jindal Global Business School, OP Jindal Global University, Sonipat, India)
Ashutosh Samadhiya (Jindal Global Business School, OP Jindal Global University, Sonipat, India)
Anil Kumar (Guildhall School of Business and Law, London Metropolitan University, London, UK)
Krishan Kumar Pandey (Jindal Global Business School, OP Jindal Global University, Sonipat, India)
Sunil Luthra (Department of Mechanical Engineering, Government Engineering College, Nilokheri, Nilokheri, India)
Jose Arturo Garza-Reyes (Centre for Supply Chain Improvement, University of Derby, Derby, UK)

Management Decision

ISSN: 0025-1747

Article publication date: 12 September 2023

269

Abstract

Purpose

Circularity has acted as an essential phenomenon for small and medium enterprises (SMEs) in emerging economies, pressuring entrepreneurs to its adoption in their businesses. During the adoption and implementation of circularity, entrepreneurs or circular entrepreneurs (to be precise) are facing various challenges to its effective functioning. However, the scholarly literature has offered limited research into this phenomenon. Thus, the purpose of this research is to identify the various barriers and sub-barriers for circular entrepreneurs to adopt circularity in SMEs of emerging economies.

Design/methodology/approach

A combined qualitative and quantitative approach was employed to achieve the objectives of the study. In the first stage, through an extensive literature review, a list of barriers was identified and in the second stage, a deductive approach was employed to finalize the barriers. Finally, Best-Worst Method (BWM), a multi-criteria decision-making (MCDM) method, was used to analyse the significant importance of the barriers.

Findings

The findings of the study suggested the “financial barrier” as the first-ranked barrier in the adoption of Circular Business Models (CBMs), followed by the “regulatory and operational barrier” as the top second and third barriers. In terms of sub-barriers, “lack of access to funding and capital” has been identified as the top sub-barrier in the adoption of CBM, followed by “excessive regulations and red tape” and “challenges due to ambiguity of the concept”.

Practical implications

To transition from a circular to a linear business approach considerably quicker and smoother, entrepreneurs may utilize the findings of this study as a blueprint for the steps to overcome the barriers in a linear to a circular transition.

Originality/value

This research differentiates from other studies due to solicited input directly from the people who are most familiar with the challenges of making the transition from linear to CBM, i.e. the entrepreneurs themselves.

Keywords

Acknowledgements

The authors would like to thank the anonymous reviewers and the editor for their constructive feedback on the initial drafts of the manuscript. Also, the authors would pay their gratitude to Prof. (Dr.) Mayank Dhaundiyal for providing valuable suggestions to during the revision stage.

Since acceptance of this article, the following author(s) have updated the affiliation(s): Sunil Luthra is at the All India Council for Technical Education, New Delhi, India.

Citation

Saharan, A., Samadhiya, A., Kumar, A., Pandey, K.K., Luthra, S. and Garza-Reyes, J.A. (2023), "Achieving circularity is a distant dream: entrepreneurial barriers to circular business models in SMEs of emerging economies", Management Decision, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/MD-02-2023-0269

Publisher

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Emerald Publishing Limited

Copyright © 2023, Emerald Publishing Limited

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