Skip to main content

Advertisement

SpringerLink
Log in

Stakeholder Influence on Adoption of Circular Economy Principles: Measuring Implications for Satisfaction and Green Legitimacy

  • Original Paper
  • Published:
Circular Economy and Sustainability Aims and scope Submit manuscript

Abstract

Stakeholder roles in the adoption of circular economy concepts and corresponding impacts on firms have been crucial for academics and practitioners. However, substantial research gaps exist in relation to the specific influence of organizational, regulatory and community stakeholder groups on the adoption of circular economy principles and how these affect internal and external stakeholder satisfactions and green legitimacy in the context of an emerging economy. Drawing on the stakeholder and institutional theories, stakeholder pressures, adoption of circular economy principles, stakeholder satisfaction and green legitimacy were explored. Using a quantitative approach, the findings showed that regulatory stakeholders have the most influence on adoption of circular economy principles, followed by organizational and community stakeholders. In particular, adoption of circular economy principles robustly influenced external stakeholder satisfaction and green legitimacy while moderately influencing internal stakeholder satisfaction. These findings serve as a guide for policy making, management decision making and future research.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Figure 1
Figure 2.

Similar content being viewed by others

Data availability

Data used for this study will be made available upon reasonable request

Abbreviations

PLS-SEM:

partial least square structural equation modelling

CMB:

common method bias

SMEs:

small and medium-sized enterprises

KMO:

Kaiser-Meyer-Olkin Measure of Sampling Adequacy

CEP:

circular economy principles

EXTSS:

external stakeholder satisfaction

GL:

green legitimacy

INTSS:

internal stakeholder satisfaction

ORG:

organizational stakeholders

REG:

regulatory stakeholders

COM:

community stakeholders

FS:

firm size

ISO:

ISO certification

CA:

Cronbach’s alpha

CR:

composite reliability

AVE:

average variance extracted

VIF:

variance inflation factor

HTMT:

heterotrait-monotrait ratio

References

  1. Afum E, Agyabeng-Mensah Y, Acquah ISK, Baah C, Dacosta E, Owusu CS, Owusu JA (2021) Examining the links between logistics outsourcing, company competitiveness and selected performances: the evidence from an emerging country. Int J Logist Manag. https://doi.org/10.1108/IJLM-05-2020-0205

  2. Agyabeng-Mensah Y, Tang L, Afum E, Baah C, Dacosta E (2021) Organisational identity and circular economy: Are inter and intra organisational learning, lean management and zero waste practices worth pursuing?. Sustain Prod Consump. https://doi.org/10.1016/j.spc.2021.06.018

  3. Baah C, Jin Z (2019) Sustainable supply chain management and organizational performance: the intermediary role of competitive advantage. J Mgmt Sustain 9:119

    Article  Google Scholar 

  4. Baah C, Jin Z, Tang L (2020a) Organizational and regulatory stakeholder pressures friends or foes to green logistics practices and financial performance: investigating corporate reputation as a missing link. J Clean Prod 247:119125

    Article  Google Scholar 

  5. Baah C, Opoku-Agyeman D, Acquah ISK, Agyabeng-Mensah Y, Afum E, Faibil D, Abdoulaye FAM (2020b) Examining the correlations between stakeholder pressures, green production practices, firm reputation, environmental and financial performance: evidence from manufacturing SMEs. Sustain Product Consump 27:100–114

    Article  Google Scholar 

  6. Baah C, Opoku-Agyeman D, Acquah ISK, Issau K, Abdoulaye FAM (2020c) Understanding the influence of environmental production practices on firm performance: a proactive versus reactive approach. J Manuf Technol Manag 32:266–289

    Article  Google Scholar 

  7. Backer L (2007) Engaging stakeholders in corporate environmental governance. Bus Soc Rev 112(1):29–54

    Article  Google Scholar 

  8. Bag S, Gupta S, Foropon C (2019) Examining the role of dynamic remanufacturing capability on supply chain resilience in circular economy. Manag Decis 57:863–885

    Article  Google Scholar 

  9. Clarkson M, Starik M, Cochran P, Jones TM (1994) The Toronto conference: reflections on stakeholder theory. Bus Soc 33(1):82

    Article  Google Scholar 

  10. de Römph TJ, Cramer JM (2020) How to improve the EU legal framework in view of the circular economy. J Energy Nat Resour Law 38(3):245–260

    Article  Google Scholar 

  11. de Sousa Jabbour ABL, Luiz JVR, Luiz OR, Jabbour CJC, Ndubisi NO, de Oliveira JHC, Junior FH (2019) Circular economy business models and operations management. J Clean Prod 235:1525–1539

    Article  Google Scholar 

  12. Deephouse DL (1996) Does isomorphism legitimate? Acad Manag J 39(4):1024–1039

    Article  Google Scholar 

  13. Deephouse DL, Newburry W, Soleimani A (2016) The effects of institutional development and national culture on cross-national differences in corporate reputation. J World Bus 51(3):463–473

    Article  Google Scholar 

  14. Dyer JH, Singh H (1998) The relational view: cooperative strategy and sources of interorganizational competitive advantage. Acad Manag Rev 23(4):660–679

    Article  Google Scholar 

  15. Ellen MacArthur Foundation, (2015). Growth within: a circular economy vision for a competitive Europe, vol. 100.

  16. Esposito M, Tse T, Soufani K (2018) Introducing a circular economy: new thinking with new managerial and policy implications. Calif Manag Rev 60(3):5–19

    Article  Google Scholar 

  17. Esposito B, Sessa MR, Sica D, Malandrino O (2020) Towards circular economy in the agri-food sector. A systematic literature review. Sustainability 12(18):7401

    Article  Google Scholar 

  18. European Commission, (2015). Closing the loop—an EU action plan for the circular economy. In European Commission, n/a.

  19. Freeman RE (1999) Divergent stakeholder theory. Acad Manag Rev 24(2):233–236

    Google Scholar 

  20. Friedman AL, Miles S (2006) Stakeholders: Theory and practice. Oxford University Press on Demand

    Google Scholar 

  21. Garcés-Ayerbe C, Rivera-Torres P, Suárez-Perales I, Leyva-de la Hiz DI (2019) Is it possible to change from a linear to a circular economy? An overview of opportunities and barriers for European small and medium-sized enterprise companies. Int J Environ Res Public Health 16(5):851

    Article  Google Scholar 

  22. Geissdoerfer M, Morioka SN, de Carvalho MM, Evans S (2018) Business models and supply chains for the circular economy. J Clean Prod 190:712–721

    Article  Google Scholar 

  23. Genovese A, Acquaye AA, Figueroa A, Koh SL (2017) Sustainable supply chain management and the transition towards a circular economy: evidence and some applications. Omega 66:344–357

    Article  Google Scholar 

  24. González-Benito J, González-Benito Ó (2006) The role of stakeholder pressure and managerial values in the implementation of environmental logistics practices. Int J Prod Res 44(7):1353–1373

    Article  Google Scholar 

  25. González-Rodríguez MR, Díaz-Fernández MC, Biagio S (2019) The perception of socially and environmentally responsible practices based on values and cultural environment from a customer perspective. J Clean Prod 216:88–98

    Article  Google Scholar 

  26. Govindan K, Hasanagic M (2018) A systematic review on drivers, barriers, and practices towards circular economy: a supply chain perspective. Int J Prod Res 56(1-2):278–311

    Article  Google Scholar 

  27. Hair JF, Ringle CM, Sarstedt M (2013) Partial least squares structural equation modeling: Rigorous applications, better results and higher acceptance. Long Range Plan 46(1-2):1–12

    Article  Google Scholar 

  28. Henseler J, Ringle CM, Sarstedt M (2015) A new criterion for assessing discriminant validity in variance-based structural equation modeling. J Acad Mark Sci 43(1):115–135

    Article  Google Scholar 

  29. Jabbour CJC, Seuring S, de Sousa Jabbour ABL, Jugend D, Fiorini PDC, Latan H, Izeppi WC (2020) Stakeholders, innovative business models for the circular economy and sustainable performance of firms in an emerging economy facing institutional voids. J Environ Manag 264:110416

    Article  Google Scholar 

  30. Kassinis G, Vafeas N (2006) Stakeholder pressures and environmental performance. Acad Manag J 49(1):145–159

    Article  Google Scholar 

  31. Li D, Huang M, Ren S, Chen X, Ning L (2018) Environmental legitimacy, green innovation, and corporate carbon disclosure: evidence from CDP China 100. J Bus Ethics 150(4):1089–1104

    Article  Google Scholar 

  32. Martín-de Castro G, Amores-Salvadó J, Navas-López JE, Balarezo-Núñez RM (2020) Corporate environmental reputation: exploring its definitional landscape. Business Ethics: Eur Rev 29(1):130–142

    Article  Google Scholar 

  33. Miles S (2017) Stakeholder theory classification: a theoretical and empirical evaluation of definitions. J Bus Ethics 142(3):437–459

    Article  Google Scholar 

  34. Murray A, Skene K, Haynes K (2017) The circular economy: an interdisciplinary exploration of the concept and application in a global context. J Bus Ethics 140(3):369–380

    Article  Google Scholar 

  35. Orlitzky M (2011) Institutional logics in the study of organizations: the social construction of the relationship between corporate social and financial performance. Bus Ethics Q 21:409–444

    Article  Google Scholar 

  36. Orlitzky, M. (2015). The politics of corporate social responsibility or: why Milton Friedman has been right all along. Annals in Social Responsibility.

  37. Podsakoff PM, MacKenzie SB, Lee JY, Podsakoff NP (2003) Common method biases in behavioral research: a critical review of the literature and recommended remedies. J Appl Psychol 88(5):879–903

    Article  Google Scholar 

  38. Porter ME, Kramer MR (2006) The link between competitive advantage and corporate social responsibility. Harv Bus Rev 84(12):78–92

    Google Scholar 

  39. Rincón-Moreno J, Ormazábal M, Álvarez MJ, Jaca C (2020) Advancing circular economy performance indicators and their application in Spanish companies. J Clean Prod 279:123605

    Article  Google Scholar 

  40. Ringle C, Da Silva D, Bido D (2015) Structural equation modeling with the SmartPLS. Bido, D., da Silva, D., & Ringle, C.(2014), Structural Equation Modeling with the Smartpls. Brazilian J Market 13(2)

  41. Ruf BM, Muralidhar K, Brown RM, Janney JJ, Paul K (2001) An empirical investigation of the relationship between change in corporate social performance and financial performance: a stakeholder theory perspective. J Bus Ethics 32(2):143–156

    Article  Google Scholar 

  42. Russell E, Kosny A (2019) Communication and collaboration among return-to-work stakeholders. Disabil Rehabil 41(22):2630–2639

    Article  Google Scholar 

  43. Sachdev SB, Verma HV (2004) Relative importance of service quality dimensions: a multisectoral study. J Serv Res 4(1)

  44. Sarkis J, Gonzalez-Torre P, Adenso-Diaz B (2010) Stakeholder pressure and the adoption of environmental practices: the mediating effect of training. J Oper Manag 28(2):163–176

    Article  Google Scholar 

  45. Sarkis J, Zhu Q, Lai KH (2011) An organizational theoretic review of green supply chain management literature. Int J Prod Econ 130(1):1–15

    Article  Google Scholar 

  46. Shashi, Centobelli P, Cerchione R, Singh R (2019) The impact of leanness and innovativeness on environmental and financial performance: insights from Indian SMEs. Int J Prod Econ 212:111–124

    Article  Google Scholar 

  47. Shubham, Charan P, Murty LS (2018) Organizational adoption of sustainable manufacturing practices in India: integrating institutional theory and corporate environmental responsibility. Int J SustainDev World Ecol 25(1):23–34

    Article  Google Scholar 

  48. Siegel DS, Vitaliano DF (2007) An empirical analysis of the strategic use of corporate social responsibility. J Econ Manag Strateg 16(3):773–792

    Article  Google Scholar 

  49. Tsinopoulos C, Sousa CM, Yan J (2018) Process innovation: open innovation and the moderating role of the motivation to achieve legitimacy. J Prod Innov Manag 35(1):27–48

    Article  Google Scholar 

  50. World Economic Forum. (2014). Towards the circular economy: accelerating the scale-up across global supply chains. Retrieved August 2, 2015, from http://www3.weforum.org/docs/WEF_ENV_TowardsCircularEconomy_Report_2014.pdf

  51. Yang YK, Wu SL (2016) In search of the right fusion recipe: the role of legitimacy in building a social enterprise model. Business Ethics: Eur Rev 25(3):327–343

    Article  Google Scholar 

  52. Zhu J, Fan C, Shi H, Shi L (2019) Efforts for a circular economy in China: a comprehensive review of policies. J Ind Ecol 23(1):110–118

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Transportation Engineering College, Dalian Maritime University, Dalian, China

    Charles Baah, Ebenezer Afum & Yaw Agyabeng-Mensah

  2. Department of Marketing and Entrepreneurship, University of Ghana, Accra, Ghana

    Douglas Opoku Agyeman

Authors
  1. Charles Baah
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Ebenezer Afum
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Yaw Agyabeng-Mensah
    View author publications

    You can also search for this author in PubMed Google Scholar

  4. Douglas Opoku Agyeman
    View author publications

    You can also search for this author in PubMed Google Scholar

Contributions

All authors (BC, YA, EA and DOA) engaged in the discussion of the concept and research plan. EA and DOA engaged in the data collection and BC and YA conducted data entry, data cleaning and data analysis and came up with the article draft. All authors (BC, YA, EA and DOA) were significant contributors in discussions that led up to the drafting of the article.

Corresponding author

Correspondence to Charles Baah.

Ethics declarations

Ethics Approval and Consent to Participate

Not applicable.

Consent for Publication

Not applicable.

Competing Interests

The authors declare that they have no competing interests.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Baah, C., Afum, E., Agyabeng-Mensah, Y. et al. Stakeholder Influence on Adoption of Circular Economy Principles: Measuring Implications for Satisfaction and Green Legitimacy. Circ.Econ.Sust. 2, 91–111 (2022). https://doi.org/10.1007/s43615-021-00093-2

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s43615-021-00093-2

Keywords

Search

Navigation