Circular business models in Japan: Analysis of circular business transformation through an institutional approach

The circular economy is becoming a globalised phenomenon, but the regional emergence of circular business models differs significantly. By adopting a circular business institutionalisation perspective which bridges theory on institutional work and “ecologies of business models” we study the emergence of circular business models in Japan, a region with recent circular policy and business commitment, through a study of 13 companies who implemented circular business models. The research finds that slow- and close-the-loop circular strategies dominate. Innovations focus on circular design, value chains, rental, lease & sharing, paying per use/performance, buy & take back, remanufacturing and recycling. Interviewed organisations modify existing business models, create entirely new ones, and disrupt existing business models. We coin “collective institutional work”: an approach that reflects stakeholder engaged strategies in Japan. The circular business institutionalisation perspective can inspire comparative research to better understand the emergence of circular business models in various regional contexts.