The Role of Diversity in Emerging Circular Business Models

This chapter explores the role of diversity in the emergence of circular business models by focusing on circular economy innovative born global start-ups. Diversity refers to a wide range of characteristics that differentiate an individual or group. These include legally protected and/or demographic characteristics, such as age, as well as identity-shaping characteristics, such as cognitive traits and experience. Diversity in organisations has been mostly explored in terms of the former, i.e., culture, age, or ethnicity as a key factor in organisational innovation and enhanced performance. This chapter offers a more holistic view on the role of diversity in relation to emerging circular business models. It shows how diversity of previous knowledge, experience, ethnicity, and the shared ideation of the organisation’s founders can be used as compatible and complementary inputs, which can lead to the emergence of a global circular business model by using integration, coordination, and fast scaling up. The analysis is on the level of firm micro-foundations. Using data from three circular born-global companies from a single country context, the study identifies different types of diversity as contributing to the emergence of these business model and their configuration. We conclude that circular born global business models are nurtured by the shared ideation and values of the business model founders, while the design of the business model is enabled by the diversity of competencies and capabilities stemming from the founders’ knowledge, past experience and diaspora networks. Such a perspective suggests that managers need to adopt in employing diversity in business model configuration in relation to common drivers and ideation, and organisational purpose.