Circular Value Creation Architectures: The Case of the Smartphone Industry

Description

Closing material loops in a circular economy (CE) calls for additional activities of various market (and sometimes non-market) actors in the value chain, which leads to additional intra-organisational coordination efforts. In this paper, we analyse emerging coordination patterns for circular practices using transaction cost theory (TCT) based on which we propose the concept of value creation architectures (VCAs). We conducted a multiple case study in the smartphone industry covering producers, network providers, and other service providers in the domains of repair and recycling. Our contribution is threefold: First, we identified four different patterns of circular VCAs: : 1) vertically integrated loop operations, 2) network based loop operations, 3) outsourced loop operations, and 4) autonomous loop operations. Thus, focal firms in the value chain are not necessarily the managing authority for CE practices. Second, we developed a comprehensive typology of circular VCAs with regard to their loop activities, their coordination mechanism, and their business case drivers. Third, we find that vertical integration efforts increase for smaller CE-loops and similarly increases the recognition of circular business cases. Therefore, we propose hybrid coordination forms between focal actors and loop operators to reach a sophisticated CE. Additionally we suggest that circular product and service design can act as a lever for decreased coordination efforts and thus overall costs of a CE.

Period	14 Sept 2017
Event title	Corporate Responsibility Research (CRR) Conference
Event type	Conference
Location	SpainShow on map