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Strategic Management, Business Ethics.

This case is suitable to be used in advanced undergraduate and MBA/MSc level.

The case accentuates the challenges faced by Geetanjali Woollens in its mechanical recycling business which is proving detrimental to its African business expansion plans. The case is developed from the episodes of divergence in January 2018 when the buyers’ non-acceptance of mechanically recycled products initiated a managerial dilemma between “business sustenance” and “sustainable business” for Geetanjali Woollens. Being associated with the recycling business for more than 25 years, Madhukar Ghosh, the General Manager at Geetanjali Woollen recycling unit, was delving upon practical, supply-chain-wide solutions to generate standard acceptance norms for mechanically recycled textiles. For him, ethical purpose of business existence was equally important as the profit motive. Bringing operational clarity and standardized regulatory framework still seemed a big challenge for international policymakers and torchbearers of environmental responsibility, and Governments and NGOs popularizing green initiatives. Lack of policy guidelines for business behavior was exacerbating the business functioning. Madhukar knew that consistent buyer policies and standard regulatory framework could clear some mist and induce maturity in the concept of circular economy. Some formalizations were expected till the end of December 2018, if the deadlines did not get pushed further.

The objectives of this case are as follows:

• to highlight the limitations that recycled apparel and textile products have and the concerns that emerge for buyers, designers, and consumers, due to these limitations;

• to highlight the myopic business vision with which the recycling business is suffering due to the lack of a formalized regulatory framework, which in turn is creating various system barriers and making recycling business an unattractive proposition;

• to appreciate the contribution of mechanical recycling of post-consumer textile waste as a closed-loop manufacturing technique in recouping the eco-impacts of increased disposal of apparel and textile products; and

• to promote discussions for innovative solutions for limitations and concerns related to substances of concern in the recycling business and deliberations for a more effective tracking of such substances to facilitate buyer acceptance of mechanically recycled products.

to highlight the limitations that recycled apparel and textile products have and the concerns that emerge for buyers, designers, and consumers, due to these limitations;

to highlight the myopic business vision with which the recycling business is suffering due to the lack of a formalized regulatory framework, which in turn is creating various system barriers and making recycling business an unattractive proposition;

to appreciate the contribution of mechanical recycling of post-consumer textile waste as a closed-loop manufacturing technique in recouping the eco-impacts of increased disposal of apparel and textile products; and

to promote discussions for innovative solutions for limitations and concerns related to substances of concern in the recycling business and deliberations for a more effective tracking of such substances to facilitate buyer acceptance of mechanically recycled products.

This chapter highlights how implementing circular economy principles can help companies working with sustainability to move from a reductionist and waste management approach to marketing competitive circular value propositions that intentionally design out waste (e.g. emissions and pollution) by rethinking, reinventing and redesigning the value chain. Schijvens, a Dutch family-owned corporate fashion textile company, acts as a case for exemplifying successful implementation of circular economy principles as a marketing strategy in a sector that struggles with finding solutions to the ethical challenges of producing and marketing textile fashion. The textile industry has, for many years, been accused of production that is based on environmentally harmful processes and conditions that are not socially fair. Circular economy principles provide a range of suggestions to address the ethical challenges occurring from covering the human needs of having clothes to wear. Yet, implementing circular economy principles is not a panacea. It is not only a question of delivering a technological quick fix but also a question of managing the new processes and human mindset guiding the actions in the value chain. This chapter, therefore, outlines reasons for a different perspective on the traditional linear value chain and related implications managers face when undertaking a journey from sustainability based on a reductionist approach to a closed-loop approach. It is argued that implementing circular economy principles by pro-actively managing the value chain processes based on eco-centric dynamic capabilities can provide even more radical changes than the incremental reductionist approach often associated with being a green sustainable company.

Buying secondhand clothing is not only interesting for consumers wanting to save money but also for sustainable clothing enthusiasts. It is now among a number of consumption practices which slow down fast fashion production while saving 10 to 20 times the energy (Fletcher, 2008, p. 100). While most of the recent scholarly work focuses on secondhand consumers (Bianchi & Birtwistle, 2010; Franklin, 2011; Norum, 2015), this paper aims to examine business activities. This perspective from economic anthropology enhances understandings of secondhand clothing, as research to-date has tended to neglect the semiotic function of clothing while underlining exchanges. To gain insight into the dynamics of the sector in Germany today, two businesses from Hamburg have been ethnographically examined by the author since 2014. This study outlines their work practices and explains the development of this high-end segment of the market from the 1970s until the digital age. For businesses, the digitalization of the trade has had massive effects on their business practice because it seems to solve inherent problems connected to the selling of pre-owned clothing. I argue that the digitalization did not only promote acceptance of buying secondhand clothing in Germany but also the emergence of new businesses models.

Arguably waste management, in its various guises, has been subjected to more analysis at the community level than any other environmental sector to date. This attention spans geographical boundaries with community-based waste organisations, particularly those focused on recycling, minimisation and reuse, subjected to critical analysis across Africa (Myers, 2005) and Asia (Forsyth, 2005), as well as in North America (Adhikari, Trémier, Martinez & Barrington, 2010; Weinberg, Pellow & Schnaiberg, 2000), New Zealand (White & du Preez, 2005) and the UK (Luckin & Sharp, 2003). While all focused broadly on matters of sustainability and governance, the first explicit analysis of community-based waste initiatives as grassroots sustainability enterprises was undertaken in Ireland in the mid-2000s (Davies, 2009).

Social enterprises (SEs), part of the third sector, are hybrid organizations combining the pursuit of social scopes with commercial business solutions. In seeking for social value, they pair for-profit and non-profit features, thereby compensating for shortcomings of both the public sector and the commercial market. Therefore, the performance management of such organizations assumes a crucial relevance. Among the available tools, the balanced scorecard (BSC) aims to capture performance multidimensionality, at the same time fostering legitimacy towards stakeholders.

In general terms, the BSC has the limit to follow a linear and static logic of construction and functioning. For this reason, scholars combine it with system dynamics (SD) to create dynamic balanced scorecards (DBSCs). However, literature seems to devote scarce attention to the adoption of such analytic tools in the third sector, particularly in SEs. This chapter wants to contribute to bridging this gap by proposing a tailored application in the context of a social cooperative, active in the clothing recycle and in the re-integration of disadvantaged social categories. By referring to previous literature about DBSC, two modelling strategies are identified: the BSC-driven and the SD-driven. The latter, based on inductive reasoning, is the one privileged for the study because of its wider flexibility. The modelling outputs consider different perspectives than the ones within traditional BSCs, contain elements of circular causality and show how financial and non-financial performances interplay and co-determine each other. Insights from the proposed model can be useful to support both decision-making and stakeholder engagement.

This chapter shows how different recycling locations influence closed-loop supply chain (CLSC) cost and carbon dioxide equivalents (CO₂e), as well as reveal competitive recycling and manufacturing locations, including relevant distance- and location-related factors, for achieving very low cost and CO₂e CLSCs supporting circular economy. Exploratory data analysis is used to analyze results from simulations based on empirical data and market rates relating to textile and clothing CLSCs. The results show that most very low-cost and CO₂e CLSCs consist of fabric and garment manufacturing located at the same or nearby locations, and whose labor costs and electricity CO₂e are low, whether fiber recycling facilities are located in proximity to used garment sorting facilities or not. Scenario and sensitivity analyses of important cost and CO₂e factors for recycling location competitiveness reveal that increasing used garment prices makes locations with high import duties lose competitiveness, and that varying water freight CO₂e changes comparative location competitiveness.

Fashion/textile small- to medium-sized enterprises (SMEs) are currently adding value to previously discarded textile waste by applying practical skills, knowledge and expertise to rework and reuse this material. As a result, sustainable design strategies such as zero-waste pattern-cutting, design for disassembly and upcycling are beginning to emerge. However, the scope for redesign will always be limited and the complete lifecycle of the material used needs to be considered at the front-end of the innovation process, to optimise material lifespans and reduce consumer waste. Further work is also required to inspire and educate the next generation of designers to the creative potential of reuse, and help the industry to understand its viability, scalability and role in the future. This chapter explores how the principals of the circular economy might support business model innovation within fashion and textiles. To this end, an exploratory canvas tool for SMEs, ‘Circular by Design’, was devised to aid SMEs to embrace closed-loop systems and to identify the most appropriate sustainable design strategies for their business.

Linear supply chain models often overlook the impact that end-users (i.e. people who “consume” or otherwise realize the intended value of the product or service) can have on core supply chain processes. As the global trade environment rapidly evolves, business and government leaders are seeking more regionalized, sustainable circular models that position “consumers” at the center of dynamic value creation and consumption networks. This chapter outlines some ways to leverage end-users of the value chain to inform development and sustainment of circular supply chain strategies and processes. First, we describe the economic, social, and ecological trends that motivate organizational leaders and managers to implement more circular supply chain models. We then provide specific ideas on how managers can leverage end-users to close, slow, narrow, intensify, and dematerialize core supply chain processes.

New mindsets and innovative thinking (ABIS, 2017; Moon, 2013, 2014, 2015; Moon, Walmsley, & Apostolopoulos, 2018) are needed to deliver on everything from good health and well-being to affordable and clean energy. This chapter reviews the latest trends globally to tackling pressing social and environmental problems (2016–2018), focuses on a sample of 100 projects, mapped against the UN SDGs and evaluated on their ‘innovation’ and scalability and selects 25 projects related to ‘circular economy’ solutions for a more in-depth consideration. The projects cover a range of applications including Buildings, Food, Energy, Transportation, Resources and Education. The key research question is: what strategic policy support is needed for enterprise & entrepreneurship education to develop the necessary multi collaborative and cross disciplinary mindsets and skills that such projects require? Reference is made to global risks and sustainability solutions, skills needed for the green economy and implications for enterprise development and entrepreneurship education. Findings reveal the need for new measures of eco and social mindset that will support the development of the creative and innovative solutions necessary for tackling the UN SDGs.