Circularity as a Game Changer

Abstract

Economies, society, and organizations are operating on borrowed time (Lacy & Rutqvist, 2015).

As a response to urgent planetary and societal needs, a critical shift is required on every aspect of how organizations in the construction sector, one of the most resource intensive and pollutant industries, propose, create, and capture value (Bocken & Antikainen, 2019). The circular economy (CE) has been embraced in the architectural discourse as one of the most powerful, innovative, and viable business strategies to achieve sustainability in the built environment. However, architectural firms are still struggling to translate the concept into their business models (BMs) (Urbinati et al., 2017; Accenture, 2014; Khan et al., 2020).

Scholars argue that in order for firms to reorganize their strategies, resources, and structures to those that are free from linear constraints, new dynamic organizational capabilities (particular kills, processes, and organizational activities) are required (Lacy & Rutqvist, 2015; Khan et al., 2020; Bauwens et al., 2020). However, most research on the subject has been developed from a practice-oriented perspective and/or has been primarily focused on large profit-driven organizations, rather than smaller creative firms driven by strategic goals beyond financial revenues (Lu & Sexton, 2006; Bos-de Vos et al., 2017).

Through semi-structured interviews and qualitative data collection with stakeholders in four architectural firms operating in the Netherlands; the research addresses the limited academical research on this field by exploring the Dynamic Capability Approach of the firm as a BM transformation know-how strategy in favor of CE.

The findings indicate that the dynamic capabilities approach is undeniably beneficial for CE implementation among architectural firms. In this regard, the research identifies 15 microfoundations of sense, seize, and reconfigure dynamic capabilities that architects and entrepreneurs can implement to transform the way they create, deliver and capture value. Furthermore, this thesis concludes that architectural firms operate on the basis of a BM portfolio with CE embedded at the project-based level. Finally, the findings suggest that CE has had limited impact in the value proposition of architects but has increased the complexity of their value creations and delivery components, ultimately leading to trade-offs and creative strategies to capture value and ensure the firms survival in still transitionary markets.