Managing Linear and Circular Business Models in Parallel

The transition from an established linear to a new circular business model is complex and full of financial and reputational uncertainties and risks. This study explores the circular business model transition as a continuous learning process in which organizations run linear and circular initiatives in parallel to complete the gradual implementation of the new circular business model. The parallel management of two business models creates contradictions and tensions between exploring and exploiting new circular initiatives and established linear practices. Based on the organizations' approach, the contradictions can present opportunities for synergies, such as shared infrastructure and collaborative opportunities, or lead to more conflicts. This study proposes a conceptual model that frames the circular business model transition as a dynamic, iterative, and experimental process of turning tensions into synergies through continuous learning and adaptation. The findings suggest that managing linear and circular business models in parallel involves addressing employees’ cognitive, organizational resources, and network legitimization tensions. We offer insights for organizations seeking to effectively navigate the tensions by enhancing learning mechanisms for stakeholder engagement, fostering a culture of adaptability, and refining processes and routines. This study sets its foundations based on the intra- and inter-disciplinary nature of the circular business model transition across, but not limited to, management science, psychology, and philosophy. Thus, our study provides the researchers with possible multidisciplinary research questions to further investigate the circular business model and circular economy domain.