Proactive and reactive views in the transition towards circular business models. A grounded study in the plastic packaging industry

This article contributes to the studies on the transition towards circular business models in incumbent entrepreneurial firms. The focus of our research is the plastic packaging industry, a paradigmatic case of firms with a high environmental impact who are currently under pressure to change their business models. Following a grounded theory approach, we conducted an exploratory research on five case studies, longitudinally analyzed over two years. The results of our research suggest that the circularity challenge raises dilemmas about how to interpret the transition to sustainability. On one hand, the transition may be interpreted in a reactive way, based on compliance to the law and the highest possible levels of continuity. On the other hand, the transition may be interpreted in a proactive way, based on radical experimentation and openness to change. Our results highlight that the reactive-proactive dilemma unfolds at three interconnected levels: the firm’s network (including the customers), the entrepreneur, and the organization. Our study also suggests that the entrepreneur is in a position to play a pivotal role in the multi-level adoption of a proactive (or reactive) view. More specifically, our longitudinal analysis suggests that if the effectiveness and impact of transition to circularity is to be maximized, then a multi-level proactive view of the circularity transition is key to transforming the three interconnected levels (network, entrepreneur, organization) into a proper, sustainability-oriented innovation ecosystem.