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Article

Investigating the Interplay between Social Performance and Organisational Factors Supporting Circular Economy Practices

1
Institute of Business Management, GLA University, Mathura 281406, India
2
Department of Industrial Engineering, University of Naples Federico II, Piazzale Tecchio 80, 80125 Naples, Italy
*
Author to whom correspondence should be addressed.
Sustainability 2022, 14(24), 16781; https://doi.org/10.3390/su142416781
Submission received: 21 October 2022 / Revised: 29 November 2022 / Accepted: 12 December 2022 / Published: 14 December 2022
(This article belongs to the Section Sustainable Management)

Abstract

:
Sustainability is the prime concern for several organisations, regulatory bodies, and industrial professionals in the contemporary business environment. Therefore, a new consumption and production paradigm emerges as the circular economy (CE), which is considered an effective medium to achieve sustainability. However, the adoption or transformation of the circular economy depends on several factors including organisational factors. Therefore, the aim of this study is to explore the role of organisational factors in the adoption of CE practices for achieving social sustainability. Initially, the fifteen organisational factors and eight social sustainability performance outcomes are identified through the literature review and expert feedback. Further, the Best Worst Method (BWM) is applied for the prioritisation of these factors. Additionally, the impact of these factors is also evaluated on the social sustainability performance outcomes using the weighted aggregated sum product assessment (WASPAS) method. The findings show that “long term planning and strategy”, “top management participation” and “alignment of organisation’s vision with CE goals” facilitate CE practices’ adoption. With the implementation of these organisational factors, improvement could be seen in employee satisfaction, fair business operations, and working conditions. The findings are beneficial for managers, policymakers, and researchers to develop strategies for the adoption of CE practices to achieve social sustainability.

1. Introduction

Humans have perceived nature as unlimited, causing environmental and social pollution through irresponsible use without considering its limited availability. To address such issues, sustainable development has become increasingly important and necessary for society because of the destruction that is resulting from several industries and businesses. Therefore, the circular economy (CE) is getting attention to address sustainability-related challenges in the current business [1,2]. A sustainability approach incorporates environmental, economic, and social aspects [3,4]. The CE is being used to address resource shortages and improve environmental performance along with social performance [5,6]. Due to this, organisations are starting to realise the importance of the CE and its potential advantages for their stakeholders [7]. The CE can serve as a model for achieving sustainability for businesses and supply networks. The CE adoption/transformations depend on several practices such as product recovery and quality assurance [8]. The benefits of CE practices include improving supply chains, customer interactions, creating jobs, decreasing resource consumption, and low environmental impact and volatility [9,10].
The CE is becoming increasingly popular due to its close relationship with sustainable development [11]. The CE describes the process of reusing items, components, and materials for some time within the economy to reduce virgin resource consumption and waste generation [12]. In the context of the CE, the process of reusing items, components, and materials within the economy for a long time is aimed at decreasing waste generation and reducing virgin material usage [12]. It is important to note that the CE is different from the linear economy in that it separates economic development from resource extraction, environmental impact, and resource reuse [13,14]. Consequently, companies that decide to reorganise their supply chains for CE may be able to reap the rewards financially, socially, and environmentally [15].
A major obstacle to implementing the CE in developing countries is their inadequate understanding of the CE, unreceptive consumers, and technical limitations [16]. The current commercial strategy of these nations must be evaluated to comply with CE regulations. To achieve a reduction in the social and environmental impacts of the supply chain, the CE may embrace the cradle-to-cradle concept [5,15]. As a result of the circular economy, businesses are encouraged to reuse their resources to maximise their value [17]. When a product or component reaches the end of its useful life, it is recovered, regenerated, and reused to maximise its resource efficiency [12]. Elia et al. [18] advocate that there is a relationship between the degree to which supply chain (SC) integration is carried out and the level to which CE methods are approved and how the supply chain adopts CE practices. However, CE practices are not present in the industrial supply chain, which makes it difficult for a circular economy to be effectively implemented. As part of its long-term development plan, the CE is proposing a comprehensive restructure of human activities.
The adoption of the CE practices and organisational factors or soft dimensions have a close relationship. For instance, Hopkinson et al. [19], after examining more than 30 years of history in an illustrative case of CE adoption, found that human factors, such as management competences and capacities, may be considered crucial components of any CE initiative. In addition to this, Chiappetta Jabbour et al. [20] also emphasise the importance of human resources for the adoption of CE practices to improve the firm performance. In the absence of a human-centric approach to the CE, organisations remain uncertain about adopting CE practices [20]. Although the human side or organisational factor is quite important for the adoption of CE practices, CE studies have thus far concentrated on operations management [21,22,23], risk management [24], supplier selection [6,15], resource management [25,26], innovation [27,28], and CE indicators [29] and underrepresented soft dimensions. This infers that, issues pertaining to the “soft side” and the human aspect of the CE have been substantially ignored in the literature. The significance of addressing the “soft side” of businesses is apparent in [10], for instance, lean implementation [30], data-driven decision making [31], innovation [32], eco-design [33] and green supply chains [34], which are all organisational practices in which the importance of the organisational factors of business has been recognised. Therefore, along with the technical side of the circular economy, the soft dimensions/organisational factors necessitate further investigation.
In addition to this, the CE is considered an instrument to achieve economic, environmental, and social sustainability. It is interesting to note that most of the CE-related studies focus on the environmental [35,36] and economic aspect [37,38] and ignore social sustainability [39,40]. Further, Sudusinghe et al. [41] emphasise environmental and economic improvement rather than social performance. Some studies address the social sustainability aspect, such as Chowdhury et al. [26], by proposing a theoretical model to explore the relationship between organisational factors and the adoption of CE practices for sustainable performance. They have focused on the sustainability performance in general rather than explicitly social sustainability. To achieve sustainability, the social sustainability aspect of the CE needs further exploration. Therefore, the aim of this study is to explore the role of organisational factors in the adoption of CE practices for achieving social sustainability. Specifically, this study has the following research objectives:
  • To identify the major organisational factors for CE practice adoption;
  • To prioritise the identified organisational factors for better adoption of the CE;
  • To rank the social performance outcomes through the adoption of organisational factors in the context of the CE.
To accomplish the aforementioned research objectives, a systematic literature review is conducted to identify the organisational factors and social sustainability performance outcomes. Further, an expert’s input is also taken for the validation of these factors. The identification of these organisational factors is not going to resolve the CE adoption issues on its own. In addition to this, the prioritisation of these factors is also required to better utilise their resources by focusing on the high-priority factors. For this purpose, the Best Worst Method (BWM) is employed. As these origination factors have an impact on social sustainability, WASPAS is used for this assessment. The performance evaluation helps the managers to adopt the CE practices through organisational factors.
The remaining paper is structured as follows. Section 2 reviews the literature of related studies; Section 3 develops the research framework for this study; Section 4 provides the data analysis and reports the result; Section 5 discusses the research findings along with literature validation; Section 6 provides managerial and academic implications; and Section 7 concludes the study and highlight the limitations and future scope.

2. Literature Review

The concept of circularity has driven corporations to adopt technology and business models that emphasise longevity, renewability, reuse, repair, upgrade, refurbishing, servitisation, capacity sharing, and dematerialisation at the organisational level [42,43]. The adoption of CE practices may result in significant savings on resources, new jobs creation, innovations, higher levels of output, and greater resource efficiency in both developed and developing nations (e.g., Yuan et al. [44]; Friends of Europe [45]; Ellen MacArthur Foundation [46], Gower and Schroeder [47]). The CE model is becoming increasingly popular as businesses begin to evaluate their options and educate themselves on its potential benefits [48]. To implement this model, many CE practices must be implemented throughout the supply chain [49]. The CE practice includes creating a circular culture, reverse logistics, redesigning, reducing, reusing, and many more [50]. The CE practices aim to incorporate environmental considerations into its operations, minimising the negative effects of industrial operations and maximising the efficiency with which energy and raw materials are utilised [15]. However, awareness and understanding of CE ideas are still relatively low throughout society despite the need for capacity building and CE skill development [51]. It has become uncertain for businesses to implement CE practices because the human component of the CE has been overlooked [19].
The adoption of the circular economy has been studied in several ways, and many of them provide a basic picture of the challenges, drivers, and facilitators that remain to be overcome [52,53]. However, the organisational aspect of CE adoption is essential for the successful adoption of CE practices and for achieving sustainability [20]. For example, training [54], creating green teams [55], and empowering employees [56] assist organisations in maintaining sustainability through the adoption of CE practices. In addition to this, managing human resources facilitates the achievement of organisational-level green sustainability goals [57]. Similarly, Dubey et al. [58], evaluate the influence of external constraints and top management engagement and supplier relationship management strategies to help in achieving the CE goals. The CE incorporates green environment practices and elements into the business model of an organisation, which includes cooperation, culture, recruitment and selection, training, performance assessment, and incentives. In addition to supporting the development of a more sustainable society, these CE-based models provide enterprises with the opportunity to enhance their sustainability performance by implementing CE practices. Sudusinghe et al. [40] claim that CE principles are applied to improve sustainability performance. However, they emphasise environmental and economic improvement rather than social performance. Chowdhury, et al. [26] proposed a theoretical model to explore the relationship between organisational factors (leadership, innovation, culture, and skills) and the adoption of CE practices for achieving sustainable performance. Jaeger-Erben et al. [41] implicitly focuses on social sustainability and argued that to build the circular futures we need to address social injustice, equity, and inclusion. Further, Walker et al. [59] conceptualises social sustainability in the context of SC and highlights that social sustainability is integral to the CE’s sustainable development path.
Since key components of the CE literature also share significant features with sustainability, it is important to consider the human component in the CE to achieve sustainability [60]. The promotion of eco-design, environmental management systems, and low-carbon management initiatives, among other organisational sustainability components, may be accomplished by focusing on the organisation factors of the CE [61,62,63]. As part of efforts to support CE goals, green training and the hiring of green teams is significantly important [64,65]. In addition to employee empowerment for environmental causes, eco-focused recruitment and selection, environmental training, environmental performance assessment and rewards, the development of eco-friendly corporate cultures, and green teams help to achieve sustainability [34,66]. The CE incorporates green environment practices and elements into the business model of an organisation, which includes cooperation, culture, recruitment and selection, training, performance assessment, and incentives.
The adoption of CE practices is facilitated by emphasising the human-centred components of an organisation, such as organisational culture, empowerment, and cooperation. These elements influence the use of CE practices in a distinct and significant way. The CE practices are influenced by the top management commitment, managerial leadership, and employee motivation [67]. There is evidence that CE practices will significantly improve the sustainable performance of firms [2]. In addition to environmental and economic sustainability, social sustainability is also achieved through the adoption of CE practices but faces some challenges from the soft side. For instance, there is a great deal of skill exchange between “core” CE jobs (such as waste management, maintenance, and rental services) and “enabling” CE jobs (such as design and digitalisation roles) in the USA, but more education and training is required for them, providing a sufficient supply of workers for both “core” manual occupations and skilled occupations that enable them to be productive. Providing these types of skill-development programs is certainly challenging, especially in developing countries. According to the European Commission’s Action Plan for the CE, the transition will positively influence employment development if people are equipped to acquire the skills necessary to handle the transition [68]. The CE has the potential to impact employment outcomes in terms of working conditions, skill requirements, and job availability in the future [69].

3. Methodology

This study uses a three-phase solution methodology to analyse the organisational factors to adopt the CE practices and their impact on social sustainability. In order to accomplish this, the first phase starts with the identification of the organisational factors that are significant for CE practice adoption and the social sustainability performance outcome. These factors and social performance outcomes are identified through the literature review and finalised with a focused group discussion. The focused group discussion is performed with the help of an expert panel that has adequate experience and knowledge about CE practices and their impact on sustainability. This expert panel consists of eight members including academia and industry experts to capture a balanced view [70]. The academic experts are universities professors working in the fields of the CE and sustainable supply chain. The industrial experts were selected based on their managerial experience of at least eight years in respectable organisations. Appendix A provides details of the experts. After the definition of the expert group, three rounds of focus group discussion are conducted with three objectives: to finalise the organisational factor of CE practice adoption (Session 1); to categorise the organisational factors into appropriate dimensions as per their similarity (Session 2); to identify the social sustainability outcomes through the adoption of CE practices (Session 3). A sequential approach to focus group discussion is taken, such that the outcome of each session forms the basis for the next session and reaches a meaningful conclusion. In the second phase, the organisational factors are prioritised using the BWM. Several methods could be used for the ranking of organisational factors [11,71]. The BWM is considered suitable due to a smaller number of comparisons and consequently high expert time utilisation [11,72,73]. Further, the reliability of the BWM ranking is high [74]. Through the application of the BWM, the organisational factors are ranked in this phase. In the third phase, the social sustainability performance is ranked using the WASPAS method by considering the organisational factors as criteria. The proposed framework is provided in Figure 1.

3.1. Best Worst Method (BWM)

Rezaei [73] developed the BWM, one of the most recent methods of the MCDM family. Due to fewer pairwise comparisons, the BWM is preferred over other MCDM techniques such as AHP and ANP. In addition to this, inconsistency resulting from pairwise comparisons is also efficiently handled by this technique. Because there are fewer pairwise comparisons to make, the experts can save a lot of time using it. In the BWM, only reference comparison is used, which implies that all criteria are only evaluated on a linear scale concerning the best and worst criteria. Typically, a 9-point (1–9) scale is used to compare criteria, with a comparison to the best criteria used to determine the preference of the best criteria over the others and a comparison to the worst criteria used to determine the preference of the other criteria over the worst.
The steps of the BWM method are used to derive the weights of the criteria as described below (Rezaei, 2015):
  • Step 1: Identification of organisational factors
In this step, the organisational factors (C1, C2, C3, …, Cn) for CE implementation are identified through a literature review and expert inputs.
  • Step 2: Define the best (most important) factor and worst (least important) factor
The expert panel/decision maker identifies the best and the worst factor among all identified factors. The best factor is represented as cB, and the worst factor is represented by cW.
  • Step 3: Pairwise comparisons with the best factor
The experts determine the preference of the best factor over all the other factors using a 9-point scale (1–9) through expert input and the Best-to-Others vector (AB) is developed and shown as follows:
AB = (aB1, aB2, ……, aBn)
  • Step 4: Pairwise comparisons with the worst factor
The experts determine the preference of the factor over the worst factor using a 9-point scale (1–9) and the Others-to-Worst vector (AW) is developed and shown as follows:
AW = (a1W, a2W, ……, anW)T
  • Step 5: Determine the optimal weights
The optimal weight for each factor is one where, for each pair wB/wj and wj/wW, it should have wB/wj = aBj and wj/wW = ajW. To satisfy these conditions for all j, the maximum absolute differences of the set are minimised {|wB − aBjwj|, |wj − ajWwW|}. This problem is expressed through the following model:
Min max {|wB − aBjwj|, |wj − ajWwW|}.
Subject to the following:
j w j = 1
w j 0   ;   j
Model (1) is converted into the following linear problem:
Min ξ L
s.t.
w B w j a B j ξ L   for   all   j
w j w W a j W ξ L   for   all   j
j w j = 1
w j 0     for   all   j
The optimal weights of each factor ( w 1 * , w 2 * ,   w 3 *   w n * )   and the optimal value of ξ L are attained through solving the linear problem (2). Further, we check the consistency level of the comparisons. The consistency of the comparison depends on the value of   ξ L , and a value closer to 0 indicates higher consistency [74].

3.2. WASPAS Method

Chakraborty and Zavadskas proposed the weighted aggregated sum/product assessment [75]. The Weighted Sum Model (WSM) and the Weighted Product Model (WPM) are combined in this approach, which belongs to the MCDM technique. This approach employs both additive and multiplicative utility functions. The following steps make up the WASPAS procedure [76]:
  • Step 1: Develop a decision matrix
The decision maker using a linguistic scale creates the decision matrix through the assessment of alternatives (in this study social sustainability performance outcome) concerning the evaluation criteria (in this study organisational factors). The decision matrix is expressed as follows:
X = [ x 11 x 12 x 1 j x 1 n x 21 x 22 x 2 j x 2 n x i 1 x i 2 x i j x i n x m 1 x m 2 x m j x m n ]
The decision matrix [ X ] m × n contains the m—number of alternatives and n—assessment criteria. The “ x i j ” characterise the performance of the ith alternative with respect to the jth criterion. In this study, the alternative is the “social sustainability performance outcome” and the criteria are the “organisational factors”. Therefore, in the context of this study, “ x i j ” shows the importance of the ith social sustainability performance outcome on jth organisational factors.
  • Step 2: Normalisation of decision matrix
By applying the linear normalising of the decision matrix element, the normalised decision matrix is created, and it is represented in Equations (4) and (5).
For the benefit criterion:
x i j   * =   x i j m a x i   x i j
For the cost criterion:
x i j * = m i n i   x i j x i j
where, x i j * is the normalised value of the x i j
  • Step 3: Calculate the measures of WSM and WSP
For each alternative, the measures of WSM ( S i ) and WPM ( P i ) are determined using Equations (6) and (7), respectively:
S i = j = 1 n w j x i j
P i = j = 1 n ( x i j * ) w j
where w j   is the weight of the jth criterion and j w j = 1
  • Step 4: Calculate the aggregated measure for alternatives
The aggregated measure ( Q i ) is determined for each alternative using Equation (8):
Q i = λ S i + ( 1 λ ) P i
where λ is the parameter of the WASPAS method, which can take the value of 0–1. Without sacrificing generality, the parameter λ is set to 0.5, indicating that both measures WAS and WPS are equally important.
  • Step 5: Prioritisation of the alternatives
The alternatives are ordered in descending order of their Q i values, starting with the one with the greatest Q i value.

4. Result

To fulfil the above objectives, the proposed three-phase framework is applied. Initially, the organisational factors and social sustainability performance outcomes are identified through the literature review and experts’ input. Further, the organisational factors are prioritised using the BWM method and impact on the social sustainability is assessed using the CoCoSo method. A detailed description of these phases is provided in the subsequent sections.

4.1. Identification of Organisational Factors for CE Adoption

The organisational factors for the adoption of CE are identified through the germane literature review. To conduct the literature review, the Scopus and Web of Science (WoS) databases are preferred. These two databases are the major citation databases that contain the highest peer-review journals from the science and management field [77,78]. To conduct the query in these databases, relevant keywords are identified such as “organisational factors”, “organisational enablers”, “determinants”, “critical success factors”, “circular economy”, “circular supply chain”, “close loop supply chain”, “adoption”, and “CE”. The combination of these keywords using the Boolean operators is searched in the Scopus and WoS databases. The resulting articles are screened through an initial review of the title and abstract. To maintain the quality of the articles, we have taken journal articles and reviews and discarded the book chapter and conference paper. Further, the duplicate items are removed, and unique documents remain for further review. The focus group discussion is performed for the finalisation of the organisational factors and social sustainability outcomes. Three sessions are conducted as mentioned in the methodology section. In the first session, the organisational factors for the CE practice adoption are finalised. To do this, the eighteen organisational factors identified with the literature review are discussed with the panel of experts for their feedback through focus group discussion. They suggested that two factors are not relevant to the current CE environment and dropped them. Further, two factors were merged into one as per the recommendation of the panel. In this manner, fifteen organisational factors were finalised for the adoption of CE practices. Based on the similarity, these organisational factors were categorised into four major dimensions and shown in Table 1.

4.2. Identification of Social Sustainability Performance Indicators

Similar to the identification of organisational factors, the social sustainability performance outcomes are identified with the help of a literature review and expert input. The Scopus database is used for the literature identifications. The relevant keywords are identified, such as “social”, “sustainability”, “sustainable”, and “performance”. Using the Boolean operators, these keywords are combined and searched in Scopus. Only journal articles and review articles are kept for further review analysis. Eight social sustainability performance outcomes are identified through a literature review and the same is validated with an expert panel. In this manner, eight social sustainability performance outcomes are finalised and shown in Table 2.

4.3. Prioritisation of Organisational Factors

In this stage, the identified factors are prioritised with the BWM method. Initially, a structured questionnaire of BWM for data collection from the experts is developed. The questionnaire has two sections, the first section deals with the basic demographic information of the experts. The second section consists of the reference comparison matrix for the main dimensions as well as organisational factors. This questionnaire is distributed to the panel and they are asked to provide their responses. The experts that participated in the focused group discussion (refer Table A1) are chosen for the prioritisation of the factors. Before collecting the response, an author provides a brief overview to the experts panel about the BWM and their steps so that the expert group fill the questionnaire in accurately. After that, the expert group provide the inputs in terms of the identification of the best and worst factors after the discussion. This discussion is moderated by the authors, which helps them to reach a consensus. The best and worst factors/sub-factors are identified by the expert group. Afterward, they provide the reference comparison with the best and worst factors separately using the nine-point linear scale. The pairwise comparison matrix of the factors and sub-factors is developed. Table 3 shows the best and worst of the factors and their caparison with other factors.
After the pairwise comparison of dimensions, the experts provide the reference comparison for each dimension factor. For the management dimension, four factors are identified as discussed in the previous section. The pairwise comparison of management-related factors is conducted and shown in Table 4.
After obtaining the pairwise comparison matrix for dimensions and factors, the weight of each dimension and factor is calculated by devolving and solving Model 2. The consistency ratio is also determined while solving Model 2. The value of the consistency ratio could vary between 0 to 1 (i.e., ξ L ϵ [ 0 , 1 ] ) .   Consistency ratio values close to 0 show more consistency, while values close to 1 show less consistency. It is recommended that the value of the consistency ratio should be less than 0.1 to maintain high consistency. Table 5 shows that the value of the consistency ratio for dimensions and organisational factors that are less than 0.1. Therefore, an inference could be made on this that the ranking and weight are highly consistent. In addition to this, the importance weights of each dimension and factor are determined and considered as a local weight. Based on this weight, the local rank of each factor is determined and shown in Table 5. Additionally, the global importance weight of each factor is computed using the local weight of the factor and the corresponding dimension weight. This global weight is utilised to determine the global rank of all factors and the same is provided in Table 5.

4.4. Prioritisation of Social Sustainability Performance Indicator in CE Environment

WASPAS analysis has been applied to prioritise social sustainability performances based on organisational factors. The organisational factors are considered as criteria to rank the social sustainability performances. To apply the WASPAS method, the data are collected from the same expert panel (refer to Table A1) that participated in the focus group discussion through a WASPAS structured questionnaire. Through the meeting, the experts are asked to provide the achievement of social sustainability through the adoption of particular organisational factors using a five-point scale (1–5). Each expert provides their responses in the form of a decision matrix by evaluating the impact of each organisational factor on the social sustainability outcomes. In this manner, eight decision matrices are obtained and then converted into the initial decision matrix using aggregation as shown in Table 6. Further, this initial decision matrix is transformed into a normalised decision matrix developed using Equation (4) and the normalised decision matrix is shown in Table A2.
In order to calculate the weighted normalised matrix for WSM, Equation (6) is applied. The resulting Weighted Normalised Matrix for WSM is calculated and shown in Table A3. Further, the Weighted Normalised Matrix for WPM is calculated using Equation 3 and the resultant matrix is shown in Table A4.
After that, the measures of WSM (Si) and WPM (Pi)are calculated using Equations (6) and (7) and shown in Table 7 The Aggregated Measure (Qi) is determined using Equation (8) by taking the value of λ = 0.5. The value of λ = 0.5 signifies equal importance to the WSM (Si) and WSP (Pi). The resulted Aggregated Measure (Qi) is shown in Table 7. Based on the Aggregated Measure (Qi), the social sustainability performance measures are ranked, and their rank is presented in Table 7.

5. Discussion

The implementation of the CE is beneficial for achieving sustainability. To adopt the CE, several organisational factors play a crucial role. These organisational factors are identified and analysed in this study to strategise the CE adoption process for achieving social sustainability. The identified organisational factors are prioritised as per their importance to adopting CE practices. The ranking of the organisational factors is as follows:
  • “long term planning and strategy”;
  • “top management participation”;
  • “alignment of organisation’s vison with CE goals”;
  • “increase employee participation”;
  • “collaboration with other SC partners”;
  • “top management awareness about green environment”;
  • “training and skill development program”;
  • “adoption of advanced eco-friendly technologies”;
  • “eco-friendly organizational culture”;
  • “financial resources allocation”;
  • “CE oriented R&D”;
  • “resistance to change”;
  • “consideration of human factors”;
  • “reward and appreciation policies”;
  • “effective workplace communication channel”.
The most significant organisational factor is “long term planning and strategy” for the adoption of the CE. The CE adoption is not a one-day affair, and it provides a significant result in the long run; therefore, the organisation is required to have a long-term vision and plan accordingly. The finding of de Klerk, Ghaffariyan, and Miles [110] also supports the long-term planning for the adoption of the CE. Further, the adoption of the CE demands some long-term strategic planning such as persistent relationships with supply chain partners and other stakeholders [111]. This factor needs to be addressed on a priority basis to achieve sustainability [112]. The second important factor is the “top management participation” that is required for the structural changes in any organisation. CE demands a new set of vision, strategy, planning, and resources at several levels and these demands are only fulfilled through the active participation of top management and their support. Several studies also emphasise the importance of top management support to implement the CE [111,113,114]. Alignment of the organisation’s vision with CE goals is also an important factor that needs to be addressed at the initial level. The CE-based vision of the organisation helps all the associated people to understand the importance of the CE and align their efforts to achieve the common sustainability goal. Khan and Haleem [15] also claim that a CE-based organisation vision supports CE adoption, especially in developing countries. The next important factor is the “increase in employee participation” in CE-related activities. Without employee participation, any type of adoption or modification is very challenging. In the case of CE adoption, it requires different skill sets and innovative mind-sets; therefore, the participation of the employee is valuable for the successful adoption of the CE. A similar claim is also found in the study conducted by Sawe, Kumar, Garza-Reyes, and Agrawal [115]. In this row, the “collaboration with other SC partners” is the next important factor that is required for the adoption of CE. The principle of the CE advocates to keep the resources in the system for a long time. Further, it also advocates for the flow of the product/components/materials in both directions, forward and reverse [2]. With these conditions, collaboration with supply chain partners plays a crucial role. Therefore, organisations need to develop a strong relationship with the SC partners such as suppliers and logistics partners to adopt the CE efficiently.
As environmental consciousness is the prime motivator to adopt the CE and top management is the decision-making body, the awareness of top management about green is a significant ingredient for CE adoption. This awareness pushes the top management to develop strategies and allocate resources to adopt the CE for achieving sustainability [53]. The importance of top management awareness is also highlighted in some studies such as Kazancoglu, Ozkan-Ozen, Sagnak, Kazancoglu, and Dora [24]. The next important factor is the “training and skill development program”. The CE requires new skill and knowledge about the CE process and these skill sets could be developed through training and development programs. As mentioned in Luthra et al. [116], training and skill development are required for the adoption of CE practices; thus, the organisation must focus on this aspect. The organisation needs to organise the training and skill development program at regular intervals so that the employee can upgrade their skill in the CE domain. The next important factor is the “adoption of advanced eco-friendly technologies” that might assist the organisation to achieve the CE goals. The eco-friendly technologies could help to reduce environmental costs and create a green image for the organisation. The importance of advanced eco-friendly technologies in achieving sustainability is highlighted in several studies [117,118]. In this row, the next factor is the “eco-friendly organizational culture” that helps in the assimilation of CE principles in their operations. The importance of eco-friendly products and processes helps the organisation to understand the importance of the CE, and this motivates the employee and employer to adopt the CE for achieving sustainability. The “financial resources allocation” is a significant factor for the success/failure of any program and CE adoption is on the same page. The CE requires several modifications in design, manufacturing, utilisation, collection, and distribution [15]. This modification is only possible if sufficient financial resources are allocated to CE adoption [119].
The “CE-oriented R&D” is another significant factor that is responsible for the successful adoption of CE. Innovation in product design, process design, and planning is an elementary requirement for CE adoption; therefore, CE-oriented R&D is quite beneficial for CE adoption. Singh, Khan, and Dsilva [2] also highlighted the importance of CE-based R&D for the realisation of CE. The next factor is the “resistance to change” that is present in every transformation and new adoption. Usually, the employee is reluctant to change the existing system and process, such that they create a similar resistance when an organisation is trying to adopt the CE. The finding of [120] and Dissanayake and Weerasinghe [121] also shows that employees resist the adoption of CE practices. The “consideration of human factors” is essential for the adoption of the CE. CE products pass through several closed-loop cycles including reduce, reuse, repair, remanufacture, refurbish, and recycle [12,120]. The role of human psychology about product quality plays an important role in reusing a product or purchasing a refurbished product. The next important factor is the “reward and appreciation policies” for the employee to motivate them to CE adoption. Further, the last important factor among all identified factors is the “effective workplace communication channel” that needs to be addressed by the top management to prevent chaos and miscommunication. Effective communication also helps in defining the goal and planning the activities in a better manner.
Through the adoption of the organisational factor for CE implementation, social sustainability could be achieved. The social sustainability performance outcomes are ranked based on organisational factors. The obtained ranks of the social sustainability performance outcomes are as follows: “employee satisfaction and welfare” “fair business operations” “better working conditions” “ethics in business” “health and safety of employees” “skill development” “freedom of collective bargaining” “job creation”.
The most substantial outcome through the adoption of organisational factors is “employee satisfaction and welfare”. With the improvement of the organisational factors, the satisfaction level of the employee increases and ultimately social sustainability is attained [122,123]. The welfare policies for the employee motivate them to work for the CE practice adoption and this could be achieved through improvement in organisation culture. Further, the adoption of the CE helps the business to conduct fair business operations to remain competitive. The fair business policies should be developed for the long-term relationship with the SC partners and CE product consumers [5]. The next social sustainability performance outcome is “better working conditions”, which depends on organisational factors. Better working conditions could be archived through the consideration of human factors while adopting the CE and reducing the resistance to change form working personnel. Better working conditions help in channelising the efforts of the employee to achieve the CE goals and improve employee performances [40]. The ethical aspect is an important part of social sustainability, and this element needs to be addressed for long-term sustainability [124]. With the adoption of the CE, ethical business operations are incorporated to gain the consumer’s trust in the brand.
The health and safety of the working personnel are also improved by increasing the focus on the identified organisational factors. The safety of the employee is the prime concern of the employer, and this aspect needs top management support and financial assistance. Through the adoption of the CE, the skills of all employees are enhanced, and they create more value for the organisation [125]. Further, a skilled employee is considered worthy of themselves, which improves their satisfaction level. The impact of the organisation factors on the “freedom of collective bargaining” is also significant. This enhances the social sustainability of the organisation. Further, the adoption of CE practices offers many job creations such as in the remanufacturing, repairing, and recycling sectors. In addition to this, the refurbished market is reaching new heights through the adoption of the CE. It is evident from the findings of this study that social sustainability is archived through the adoption of the CE and organisational factors play a very critical role in attending to the same. Therefore, the top management and policy planners should focus on these factors and address them properly to achieve social sustainability in their organisation.

6. Implications

This study has significant implications for managers and academicians. The major highlights of the implication are provided as follows:

6.1. Practical Implications

This study focusses on the adoption of the CE through organisational factors and assesses their impact on social sustainability. The identified list of the significant organisational factors is beneficial for the top management to focus on these factors for the successful adoption of the CE. The human resource department could utilise this list for developing strategies to develop a good working environment to prepare their working personnel for the CE. Employee welfare and motivation are considered in sustainable work culture and employee training, which offers social sustainability to organisations. In addition, the prioritisation of the organisational factors might be utilised for optimal resource utilisation. As the organisation cannot implement all the factors simultaneously, prioritisation helps them to decide on which factor they need to focus on first. The findings suggest that long-term planning and strategy are essential for the adoption of the CE so organisations need to develop long-term planning and deploy the strategies systematically. Further, top management participation is also a critical element of CE adoption. In addition, the findings also suggest that the origination’s vison needs to be aligned to CE goals for the successful adoption of the CE. The results of this study also confirm that social sustainability could be achieved through CE adoption. The eight social sustainability performance outcomes support the managers to monitor their sustainability performances while adopting the CE. The prioritisation of the social sustainability performance outcomes shows that employee satisfaction, fair business operations, and better working conditions can be achieved through improvement in organisational factors. Therefore, the managers need to improve the organisational factors to gain social sustainability in the CE context.

6.2. Academic Implications

This study explores the organisational factors of the CE aspect that is rarely available in the literature. The identification of the organisational factors helps the academician to purpose the strategies for their incorporation. This study extends the social sustainability literature and further strengthens and extends previous studies that examine these issues. Further, the prioritisation of the organisational factors could be beneficial for developing their construct and hypothesis testing. The purposed framework for the assessment of social sustainability is utilised for a specific industry such as plastic, automobile, and electronic industries. The social sustainability aspect in the CE domain is not well researched so this study is helpful to establish the relationship between CE and sustainability. The findings of this study support the sustainability aspect of the CE and motivate the researchers to develop a relationship between organisational factors and social sustainability.

7. Conclusions, Limitations, and Future Directions

To remain competitive in the current dynamic business world, organisations must be sustainable. The existence of sustainability is inadequate without achieving social sustainability. Social sustainability is a function of the organisational culture and relevant factors. Therefore, this study focuses on the social sustainability aspect of CE practice adoption by considering the organisational factors. The findings of this study show that strategic factors are the most significant factors among the identified factors for the adoption of CE practices. The management need to focus on the implementation of CE practices through focusing on long-term planning and strategy rather than short-term planning and profit. In addition to this, the alignment of an organisation’s vision with CE goals also accelerates the adoption process of CE practices. This study also shows that the effective adoption of CE practices helps the organisations to achieve social sustainability in terms of “employee satisfaction and welfare” and “improved working conditions”.
In terms of limitations, this study only focused on the organisational factors rather than holistically. The list of the organisational factors was prepared with the help of a literature review so there is a possibility that some relevant factors were ignored. These factors are related to the strategy, management, technology, and culture. The psychological and behavioural factors were not considered in this study. Further, the prioritisation of organisation factors depends on the expert’s opinion, and this could be biased and subjective. To overcome these limitations, a more extensive literature review should be conducted in future studies. Further, fuzzy and grey theory should be integrated with this methodology to avoid biasness. This study was conducted in a developing country and it could be extended to developed and underdeveloped countries. The findings also assist in the formulation of the research hypothesis to validate the findings statistically. In future studies, these organisational factors can be modelled using modelling techniques such as ISM and DEMATEL. The prioritisation of identified factors could be conducted with other methods such as AHP, ANP, DANP, TOPSIS, CoCoSo, and many more. Further, this study could also be validated with the help of multiple case studies in future studies.

Author Contributions

S.K. and R.S. conceived the idea. R.S. surveyed the literature, found factors and collected the responses. S.K. contributed to the analysis. S.K. and R.S. wrote the paper. P.C. edited the original draft and administrated the project. All authors have read and agreed to the published version of the manuscript.

Funding

This research received no external funding.

Institutional Review Board Statement

Not applicable.

Informed Consent Statement

Not applicable.

Data Availability Statement

The data presented are available on request from the corresponding authors.

Conflicts of Interest

The authors declare no conflict of interest.

Appendix A

Table A1. Expert’s Profile.
Table A1. Expert’s Profile.
S. No.DesignationGenderExperience (in Year)QualificationSpecialisations
1.Professor Male35PhDCircular supply chain management, sustainable development
2.Supply Chain ManagerMale13Master of ScienceClose-loop supply chain management
3.Recovery Manager Male10B. TechRemanufacturing and recycling
4.Procurement ManagerFemale12MBAProcurement and supplier management
5.Associate Professor Female12PhD Sustainability
6.Senior Operations managerMale18B. TechManufacturing and remanufacturing
7.Logistics ManagerFemale 9MBALogistics management
8.AcademiaFemale14PhDCE and sustainability
Table A2. Normalised Matrix for Social Sustainability Performance.
Table A2. Normalised Matrix for Social Sustainability Performance.
MF1MF2MF3MF4TF1TF2TF3CF1CF2CF3CF4SF1SF2SF3SF4
SSP10.78380.72500.58331.00000.92500.78381.00000.92500.54000.78950.95000.75000.57890.81080.7333
SSP20.94590.87500.75000.68420.67500.51350.51350.67500.52000.97370.72500.72500.76321.00000.9667
SSP30.75680.90001.00000.46430.90000.75680.97300.90001.00001.00000.95001.00001.00000.81081.0000
SSP40.48650.85000.72220.50001.00000.91890.91891.00000.68000.89471.00000.65000.68420.91890.6000
SSP51.00001.00000.80560.61900.72500.56760.78380.90000.60000.71050.87500.67500.71050.94590.9000
SSP60.56760.72500.80561.00000.72501.00000.78380.50000.28000.92110.87500.47500.50000.72970.6333
SSP70.56760.52500.80560.44830.92500.78380.56760.90000.60000.71050.87500.67500.50000.94590.6333
SSP81.00000.92500.80561.00000.52500.56760.78380.50000.60000.71050.67500.47500.92110.94590.9000
Table A3. Weighted Normalised Matrix for WSM.
Table A3. Weighted Normalised Matrix for WSM.
MF1MF2MF3MF4TF1TF2TF3CF1CF2CF3CF4SF1SF2SF3SF4
SSP10.09690.04890.01310.04500.05150.01250.03180.04380.04750.01870.01280.03610.12550.09760.0589
SSP20.11700.05900.01690.03080.03760.00820.01630.03190.04570.02300.00980.03490.16540.12040.0776
SSP30.09360.06070.02250.02090.05010.01200.03100.04260.08790.02370.01280.04820.21670.09760.0803
SSP40.06020.05730.01620.02250.05570.01460.02920.04730.05980.02120.01350.03130.14830.11060.0482
SSP50.12370.06750.01810.02780.04040.00900.02490.04260.05270.01680.01180.03250.15400.11390.0722
SSP60.07020.04890.01810.04500.04040.01590.02490.02370.02460.02180.01180.02290.10840.08790.0508
SSP70.07020.03540.01810.02020.05150.01250.01810.04260.05270.01680.01180.03250.10840.11390.0508
SSP80.12370.06240.01810.04500.02920.00900.02490.02370.05270.01680.00910.02290.19960.11390.0722
Table A4. Weighted Normalised Matrix for WPM.
Table A4. Weighted Normalised Matrix for WPM.
MF1MF2MF3MF4TF1TF2TF3CF1CF2CF3CF4SF1SF2SF3SF4
SSP10.9700.9790.9881.0000.9960.9961.0000.9960.9470.9940.9990.9860.8880.9750.975
SSP20.9930.9910.9940.9830.9780.9890.9790.9820.9440.9990.9960.9850.9431.0000.997
SSP30.9660.9931.0000.9660.9940.9960.9990.9951.0001.0000.9991.0001.0000.9751.000
SSP40.9150.9890.9930.9691.0000.9990.9971.0000.9670.9971.0000.9790.9210.9900.960
SSP51.0001.0000.9950.9790.9820.9910.9920.9950.9560.9920.9980.9810.9290.9930.992
SSP60.9320.9790.9951.0000.9821.0000.9920.9680.8940.9980.9980.9650.8610.9630.964
SSP70.9320.9570.9950.9650.9960.9960.9820.9950.9560.9920.9980.9810.8610.9930.964
SSP81.0000.9950.9951.0000.9650.9910.9920.9680.9560.9920.9950.9650.9820.9930.992

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Figure 1. Research framework for this study.
Figure 1. Research framework for this study.
Sustainability 14 16781 g001
Table 1. Organisational factors for CE practice adoption.
Table 1. Organisational factors for CE practice adoption.
DimensionsOrganisational FactorsCodeDescriptionReferences
Management factors (MF)Top management participationMF1Top management support is essential for fostering CE practices and outlining each employee’s role in adopting these practices.[17,79,80]
Top management awareness about green environmental factorsMF2Every employee, especially top management of the company, should be aware about the green environment and eco-friendly process to motivate the CE practices.[81,82]
Consideration of human factorsMF3Human resource plays a significant role in the adoption of CE practices and the relevant human factors need to be considered while adopting the CE practices.[83]
Financial resources allocationMF4Corporate leaders find it challenging to decide whether or not to embrace CE techniques because of the high initial investment and the uncertain nature of the return on this investment.[84]
Training and Skills development factors (TF)Training and skill development program TF1Both employees and employers require suitable training and development to adopt CE practices, since training plays a key role in developing the skills required for CE practices.[52,85,86]
Reward and appreciation policiesTF2Rewards and recognition policies are intended to motivate staff members, particularly field personnel, whose work is exceptional, either on an individual or team basis; therefore, the rewards policy needs to be drafted and implemented fairly.[60]
CE-oriented R & DTF3Research and development for a circular economy may assist in designing an efficient process with minimum cost.[87]
Cultural factors (CF)Increase eco-friendly organisational cultureCF1The development of circular economy activities is significantly influenced by organisational culture; therefore, the adoption of CE practices is facilitated by the organisation’s environmentally conscious cultural norms.[82,88]
Increase employee participation CF2Employee engagement aids in CE practice adoption and improves firm performance via intrinsic motivation.[89]
Resistance to change: (manager and staff resistance)CF3As the results of any changes are very unpredictable, resistance to change to adopt the CE practices occurs at both an organisational as well as an individual level.[90]
Effective workplace communication channelCF4CE practices are new for organisations and their personnel; therefore, effective communication is required at the workplace to avoid errors.[81,91,92]
Strategic Factors (SF)Adoption of advanced eco-friendly technologies SF1Advanced technologies such as blockchain, IoT, and data analysis help to achieve the CE goal through properly adopting CE practices.[93,94]
Long-term planning and strategySF2The adoption of the CE practices is going to provide benefits in the long run in terms of competitive edge and sustainability; thus, the organisations need to focus on long-term planning rather than short-term planning.[81,82,90]
Alignment of organisation’s vison with CE goalsSF3An organisation’s performance is greatly influenced by how well its CE objectives are in line with its organisational vision.[95,96]
Collaboration with other SC partnersSF4Supply chain collaboration, cooperative planning, coordination, and process integration amongst suppliers, customers, and other organisation partners is required to adopt CE practices.[97]
Table 2. Social sustainability performance outcome.
Table 2. Social sustainability performance outcome.
IndicatorsCodeDescriptionReferences
Health and safety of employeesSSP1Individuals and every member of society should feel respected and fairly treated in terms of their obligations, which enhances social safety and a healthy lifestyle in terms of housing, food, privacy, energy, life, and work security in localities.[98]
Ethics in businessSSP2Ethical aspects focus on the effectiveness of services and the social impact of CE, which is responsible for ethical sourcing, proper advertising, and supply chain activities that are transparent.[99,100]
Employee Satisfaction and welfareSSP3Proper education and training for the workforce, lifelong learning, and job analysis create a safe sustainable and productive workplace that provides employee satisfaction.[101,102,103]
Skill developmentSSP4Skill development may promote structural transformation and economic growth by boosting employability, labour productivity, and country competitiveness.[104,105,106]
Working conditionSSP5Working condition includes the number of hours worked, the level of stress, the level of safety, or the level of risk at the workplace that need to be improved for long-term sustainability.[107]
Job creationSSP6Creating new employment, particularly for those who have been idle or jobless in the past, for achieving social security and social sustainability[102]
Freedom of collective bargainingSSP7The fundamental need for collective bargaining and social discussion is the freedom of both employers and employees to form their independent groups.[107,108]
Fair business operationsSSP8Fair business practices may aid in establishing organisational objectives and ensuring that all processes, such as team management, budget management, employing new personnel, and general company operations, are carried out efficiently.[109]
Table 3. Reference comparison of dimensions by the expert group.
Table 3. Reference comparison of dimensions by the expert group.
ComparisonMFTFCFSF
Best (SF) to Other2431
Other to Worst (TF)3125
Consistency Ratio: 0.0517
Table 4. Reference comparison for organisational factors by experts group.
Table 4. Reference comparison for organisational factors by experts group.
Reference Comparison for Management Factors
ComparisonMF1MF2MF3MF4
Best (MF1) to Other1263
Other to Worst (MF3)5312
Consistency Ratio: 0.0435
Reference Comparison for Training and Skills Development Factors
ComparisonTF1TF2TF3
Best (TF1) to Other132
Other to Worst (TF2)412
Consistency Ratio: 0.0769
Reference Comparison for Cultural Factors
ComparisonCF1CF2CF3CF4
Best (CF2) to Other2146
Other to Worst (CF4)4721
Consistency Ratio: 0.0392
Reference Comparison for Strategic Factors
ComparisonSF1SF2SF3SF4
Best (SF2) to Other5123
Other to Worst (SF1)1422
Consistency Ratio: 0.0517
Table 5. Local and Global rank of organisational factors for CE Adoption.
Table 5. Local and Global rank of organisational factors for CE Adoption.
BarriersWeightsξLSub-BarriersLocal WeightLocal RankξLGlobal WeightGlobal Rank
MF0.25860.0517MF10.478310.04350.12372
MF20.260920.06756
MF30.087040.022513
MF40.173930.045010
TF0.1034TF10.538510.07690.05577
TF20.153830.015914
TF30.307720.031811
CF0.1724CF10.274520.03920.04739
CF20.509810.08794
CF30.137330.023712
CF40.078440.013515
SF0.4655SF10.103440.05170.04828
SF20.465510.21671
SF30.258620.12043
SF40.172430.08035
Sum W D S u m = 1.000 W M F S u m = 1.000 ,
W T F S u m = 1.000 ,
W C F S u m = 1.000 ,
W S F S u m = 1.000
W G l o b a l S u m = 1.000
Table 6. Initial Matrix for Social Sustainability Performance.
Table 6. Initial Matrix for Social Sustainability Performance.
MF1MF2MF3MF4TF1TF2TF3CF1CF2CF3CF4SF1SF2SF3SF4
SSP13.6253.6252.6251.6254.6253.6254.6254.6253.3753.7504.7503.7502.7503.7502.750
SSP24.3754.3753.3752.3753.3752.3752.3753.3753.2504.6253.6253.6253.6254.6253.625
SSP33.5004.5004.5003.5004.5003.5004.5004.5006.2504.7504.7505.0004.7503.7503.750
SSP42.2504.2503.2503.2505.0004.2504.2505.0004.2504.2505.0003.2503.2504.2502.250
SSP54.6255.0003.6252.6253.6252.6253.6254.5003.7503.3754.3753.3753.3754.3753.375
SSP62.6253.6253.6251.6253.6254.6253.6252.5001.7504.3754.3752.3752.3753.3752.375
SSP72.6252.6253.6253.6254.6253.6252.6254.5003.7503.3754.3753.3752.3754.3752.375
SSP84.6254.6253.6251.6252.6252.6253.6252.5003.7503.3753.3752.3754.3754.3753.375
Table 7. Ranking of the social sustainability performance.
Table 7. Ranking of the social sustainability performance.
Social Sustainability PerformanceWSM (Si)WSP (Pi)Aggregated Measure (Qi)Rank
SSP10.74060.72710.73385
SSP20.79460.77800.78634
SSP30.90060.88850.89461
SSP40.73600.71650.72636
SSP50.80810.79530.80173
SSP60.61530.58780.60158
SSP70.65550.63570.64567
SSP80.82340.80030.81182
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Singh, R.; Khan, S.; Centobelli, P. Investigating the Interplay between Social Performance and Organisational Factors Supporting Circular Economy Practices. Sustainability 2022, 14, 16781. https://doi.org/10.3390/su142416781

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Singh R, Khan S, Centobelli P. Investigating the Interplay between Social Performance and Organisational Factors Supporting Circular Economy Practices. Sustainability. 2022; 14(24):16781. https://doi.org/10.3390/su142416781

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Singh, Rubee, Shahbaz Khan, and Piera Centobelli. 2022. "Investigating the Interplay between Social Performance and Organisational Factors Supporting Circular Economy Practices" Sustainability 14, no. 24: 16781. https://doi.org/10.3390/su142416781

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