Strategic management of sustainability in the circular economy

Abstract

Today, the global economic system demonstrates rapid con sumption, the degradation of the environment and the insufficient use of natural resources, which are accepted as mainstream econo mies in all countries under the title of the “linear economic model” (Barbosa et al., 2020; Elkington,1998). Traditional production sys tems aimed to gain significant power and dominance and maximize their profits at the expense of their impact on the environment and society. To this end, These systems put forth regulations and policies enabling their production at global level. This is while, both deve loped and developing countries has started to articulate the risks such an approach can bring about including increasing consumer pressures, public dissatisfaction and climate change. Therefore, in the last decades, there has been a shift towards alternative solutions to sustain global resources for the sake of next generations and planet safety (Elliott, 2012). Circular Economy (CE) has emerged as a crucial alternative to preserve ecosystems and humanity. As such, firms are supposed to apply more responsible, ethical stra tegic management actions in order to legitimate their existence. Integrating the mindset of sustainability in strategic management requires more awareness, concerns, and leadership skills from de- cision-makers. Consequently, businesses might deploy the Triple Bottom Line (TBL) approach to achieve superior performance in economic, environmental, and social aspects (Barbosa et al., 2020; Elkington,1998). As an illustration, the study by Barbara et al. (2019) revealed that adapting sustainable management in the context of the TBL approach could lead to better business performance, where the alignment of firm values to sustainable commitment had a catalytic effect on the firms’ long-term survival. In light of the mentioned concepts and approaches, this chapter aims to add to the knowledge of how strategic management of sustainability is contextualized under the circular economy phenomenon.