How to renew business strategy to achieve sustainability and circularity? A process model of strategic development in incumbent technology companies

Abstract

Strategic development to promote sustainability and circularity challenges incumbents to fundamentally renew their way of doing business. However, the management of this type of strategic development process, that is, strategic renewal aiming at achieving sustainability, remains largely unknown. Therefore, we investigated what constitutes incumbents' strategic renewal aimed at achieving sustainability and how to manage each stage of this process. We conducted a single-case study of the incumbent tech company, Neste Oyj, which is renewing from a fossil-based business to a sustainable and circular business. We analyzed multisourced interview-and document-based data collected from a 25-year longitudinal case study by applying a processual approach and the critical incident technique. We proposed an empirically based process model of business strategy renewal comprising five stages, each of which follows the subprocesses of strategic formulation, implementation, and evaluation. The findings and the process model extend the theoretical understanding of incumbents' business strategy development to achieve sustainability and circularity. The proposed model will enable managers to understand what management issues to focus on and what actions are needed at each stage of the strategic renewal process.

Hard dimensions evaluation in sustainable supply chain management for environmentally adaptive and mitigated adverse eco‐effect environmental policies

“…To do this, a questionnaire was distributed among the experts in two oil companies with EA and MAE policies. These hard dimensions were ranked using the Bayesian BWM and OPA; cause-and-effect relation- business policy development (Kaipainen & Aarikka-Stenroos, 2022). If the managers do not apply technologies for cleaner production, their financial performance will not be improved (Brahmana & Kontesa, 2021).…”

Refuse derived fuels as an immediate strategy for the energy transition, circular economy, and sustainability

“…Managerial decisions must be focused on the immediate needs while remaining coherent with the strategy for sustainable transition. To that end, Kaipainen and Aarikka‐Stenroos (2022) discuss a study case of the Neste Oyj tech company and propose an empirically based process of business strategy renewal focused on strategic formulation, implementation and evaluation of five steps. Critically, the authors conclude that players aiming to supporting sustainable business transformation should actively collaborate with incumbent tech companies to support them, thus advancing their sustainable development goals.…”

“…In reality, linear economies are material and energy intensive, and their consumption pattern has huge environmental, economic, and social disadvantages. Indeed, for example, according to the report on the Circular Economy Action Plan of EU, half of the total greenhouse gas emissions and more than 90% of biodiversity loss and water stress come from resource extraction and processing (Kaipainen & Aarikka‐Stenroos, 2022).…”

“…Managerial decisions must be focused on the immediate needs while remaining coherent with the strategy for sustainable transition. To that end, Kaipainen and Aarikka-Stenroos (2022) This work aims to discuss the contribution of RDF to the promotion of a circular economy, to present the main production technologies and properties of RDF and relevant global market data regarding the imports and exports of RDF.…”

Incumbents’ Capabilities for Sustainability-Oriented Innovation in the Norwegian Food Sector—an Integrated Framework

“…A change at the micro level triggered by established food firms is needed to make a visible impact at a systemic level. Therefore, incumbents must modify their organization or processes and remodel their long-term strategy including periodical finetuning of goals to adjust them to sustainability transition’s challenges [ 20 , 24 , 55 ]. However, innovations with a significant positive impact on sustainability are often radical and disruptive [ 31 ], shaking the stability of incumbents’ strategies and conflicting with their interests.…”