Organizational Boundary Change in Industrial Symbiosis: Revisiting the Guitang Group in China

Abstract

This study revisits the Guitang Group, one of the best known industrial symbiosis cases in the sugar industry. Our goal is to offer an evolutionary understanding of industrial symbiosis at the Guitang Group. This article focuses on the organizational boundary change of the Guitang Group over time, and acknowledges this process as one of the seven industrial symbiosis dynamics proposed by Boons et al. We offer a historical view of the critical forces behind Guitang's industrial symbiosis evolution since the 1950s; particularly how these changes were influenced by broader economic and institutional contexts of importance in China. These insights include the role of institutionalized research and development (R&D) as well as technology-oriented leadership as driving forces for Guitang's innovation, particularly since the 1990s, when greater efficiency and productivity were emphasized, leading to the establishment of further symbiotic relationships in the company's evolutionary process. As a result, the Guitang Group grew from 2 internal to 11 internal and external symbiotic exchanges and is now a conglomeration with more than 3000 employees generating more than 1 billion RMB (150 million USD) in revenue annually.

Business models for industrial symbiosis: A taxonomy focused on the form of governance

“…The IS practice allows firms to encompass the borders of traditional supply chains because symbiotic relationships are usually implemented among companies belonging to different industries that might not cooperate in traditional business models (Bansal and McNight, 2009;Geng and Côté, 2007;Herczeg et al, 2018;Jensen, 2016). In addition to waste producers and waste receivers, also companies carrying out waste treatment processes can take part in ISNs, when a waste treatment process is required to make the waste able to be used as input (e.g., Aviso, 2014;Hein et al, 2017b;Lèbre et al, 2017;Liwarska-Bizukojc et al, 2009;Shi and Chertow, 2017).…”

“…Accordingly, when inter-firm relationships require greater coordination, transaction costs increase, ceteris paribus (e.g., Gereffi et al, 2005). Rather than to exchange waste with another company, waste producers might use wastes within their boundaries (e.g., by using a waste produced by a given production process as input for other production processes or simply selling wastes on the market, when a waste market exists) (e.g., Shi and Chertow, 2017;Zhu et al, 2008). In such a case, there is no interdependence between firms within the system and the need for coordination is thus low, thus resulting in low transaction costs for the company.…”

“…A real case of a company implementing such a model is offered by the Guitang Group, one of the biggest Chinese sugar producers, established by the Chinese government in 1956 (Shi and Chertow, 2017;Yang and Feng, 2008;Zhu et al, 2008). At the time of establishment, the Guitang Group produced sugar and molasses as main products and exploited waste molasses to produce alcohol.…”

Industrial Symbiosis: Context and Relevance to the Sustainable Development Goals (SDGs)

“…The other wellknown industrial symbiosis case in China is the Guigang eco-industrial park, which started as one of the first group of state-owned enterprises in China. The best known occupant in the park is the Guitang Group, a conglomerate that facilitated by-product exchanges between sugar, pulp and paper, chemicals, and utilities facilities through multiple organizational restructurings starting from the 1950s (Shi et al 2010;Zhu and Cote 2004;Zhu et al 2007;Shi and Chertow 2017).…”

“…More recent research has highlighted the importance of time in the social formation of industrial symbiosis. The emergence, evolution, and dissolution of symbiotic relationships are studied through process-tracking in specific institutional background (Boons et al 2011;Spekkink 2014;Shi and Chertow 2017).…”