Interorganizational Sensemaking of the Transition Toward a Circular Value Chain

Abstract

The transition toward the circular economy requires stakeholders to collaborate along value chains. Yet, such collaborations are considerably challenging. Given the paradigmatic change, stakeholders face high levels of uncertainty and also need to align on a common way forward. We extend research on interorganizational sensemaking and the circular economy by exploring the process of interorganizational alignment in a European consortium of over 150 companies representing the value chain for flexible packaging with the objective to transform the value chain from linear to circular. We find that the interorganizational sensemaking process unfolds across three levels—organization, value chain, and ecosystem—which provide different reference frames for the process. We provide insights into how these frames, power dynamics, and identity considerations influence this process. Our findings highlight the importance of considering interdependencies between stakeholders and a collective reconceptualization of the established value chain to successfully transition toward a circular one.

The Past and Future of Corporate Sustainability Research

“…A thorough exploration of supply chains, which embraces a broader perspective on firm operations by integrating its network of suppliers into the analysis (Zhu et al, 2013), represents a significant advancement toward understanding the larger system. Likewise, delving into the intricacies of the circular economy—a framework wherein materials undergo continuous cycles and nature undergoes revitalization—holds promise in informing how to tackle systemic challenges from an engineering vantage point (Geissdoerfer et al, 2017; Kuhlmann et al, 2023). It is important to highlight that, despite its potential implications, the concept of the circular economy remains somewhat underserved within the current body of literature.…”

“…Indeed, theories of collective action and the tragedy of the commons, developed within political science (Hardin, 2015), can provide valuable insights into various innovative governance models. In addition, engineering approaches employing life cycle methodologies offer a promising perspective for envisioning sustainable impact that extends beyond corporate boundaries (Kuhlmann et al, 2023). Corporate sustainability journals could play a pivotal role in facilitating, fostering, and incentivizing cross-fertilization across disciplines.…”