Performance of small firms in a circular economy: configuring challenges and entrepreneurial orientation

Abstract

Purpose

Society's concerns about environmental degradation have tightened competitive pressure and brought new challenges to small firms. Against this backdrop, this study develops a decision model to determine a suitable configuration for entrepreneurial orientation to help small firms manage circular economy challenges and improve their performance.

Design/methodology/approach

This study used a multi-study and multi-method approach. Study 1, through qualitative in-depth interviews, identified a portfolio of circular economy challenges and entrepreneurial-orientation components. Study 2 applied the quality function deployment technique to determine the most important components of entrepreneurial orientation. Study 3 adopted a fuzzy set qualitative comparative analysis to determine the best configuration for challenges and components.

Findings

The findings reveal a set of challenges and identify the salient need to combine the negation of these challenges with the components of entrepreneurial orientation; this combination will improve the performance of small firms. The research extends the current knowledge of managing circular economy challenges and offers decision-makers insights into improving their resilience.

Originality/value

The use of the dynamic capability view, together with the multi-study and multi-method approach, may lead to an appropriate reconfiguration of entrepreneurial orientation, which, to date, has received limited empirical attention in the small-business-management discipline.

Citation

Khan, E.A., Chowdhury, M.M.H., Hossain, M.A., Mahmud, A.K.M.S., Baabdullah, A.M. and Dwivedi, Y.K. (2024), "Performance of small firms in a circular economy: configuring challenges and entrepreneurial orientation", Management Decision, Vol. 62 No. 8, pp. 2428-2450. https://doi.org/10.1108/MD-05-2022-0731