A Circular economy model for measuring the circularity readiness of UK Manufacturing SMEs
Creators: name: Thorley, John
Publisher: name: College of Business, Law and Social Sciences, University of Derby
Year: 2024
Subjects: Circular Economy, Organisational Readiness, SMEs, Change

description: Abstract 
Purpose 
The circular economy has been attracting more interest over the years with 
academics, industry, and the wider society. The idea of a transition from a linear 
economy to a circular economy is well understood in academia and simplistic by 
nature. However, the challenges and barriers to this transition at all levels, macro, 
meso and micro are fundamentally complex and have wide consequences largely on 
the economic front but also on the method by which business is creating value 
propositions and generating revenue. Moreover, it is a huge shift in the way business 
is conducted and requires new ways of thinking and delivering products and services. 
It requires a paradigm shift in our intellectual capital to imagine new methods of 
maintaining a standard of living through products and services, whilst respecting the 
natural/finite resources, the natural world and social context. This research 
concentrates on the micro level and focuses on SMEs' transition to circular economy, 
by developing a model of readiness. This verified model aims to measure the level of 
readiness of manufacturing SMEs on their journey to circularity from the human side 
of the organisation rather than the capacity of the organisation to make the change. 
Design/methodology/approach 
The conceptional model and instrument were developed from previous research 
associated with organisational change in other areas such as Lean, Six Sigma, and 
TQM and contextualised to circular economy through known barriers sought from the 
research. Due to the nature of the application to SMEs, it was specifically designed 
to be as unintrusive, simple to disseminate and as time efficient as possible. 
Experience working in SMEs for many years influenced the decision to avoid anything 
complex, time-consuming, and requiring huge effort to operationalise. This conceptual 
model and instrument (questionnaire) have been verified using a Delphi survey 
technique. It was conducted through two iterations of the survey. Experts from 
academia and industry were participants in the study and through anonymous 
feedback helped to shape and verify the conceptual model and instrument, thus 
ii 
modifying and making changes along the way. This verified model and instrument, 
(diagnostic) were then entered into the validation process. 
Findings 
It has emerged that there are many barriers for SMEs in consideration of opting to use 
the instrument and diagnostic. The first issue is where SMEs are on their journey to 
circularity and their leaders’ current level of understanding. Even the terms and 
language used in the instrument (diagnostic) were questioned as to “what it means”, 
by organisations’ leaders. The second barrier to validating the model and Instrument, 
(diagnostic) is an SME being aware of the value proposition and being persuaded of 
the value in use, co-creation of value through applying the diagnostic and realising the 
benefits of doing so. 
Practical implications 
Leaders who see merit in assessing attitudes and beliefs associated with the barriers 
and common aspects of organisational change will understand the challenges of a 
journey to circularity. The benefits of using this diagnostic will enable leaders and 
business owners to develop a strategy of change based on perceived readiness from 
the evaluation. They will be able to conceive change interventions such as enhanced 
communication, training, coaching, and recruitment depending on how they perceive 
their feedback. Having the commitment and belief to use the diagnostic and energy 
and resilience to take action are key to value co-creation. 
Originality/value 
The proposed model and instrument are relevant as a strategic diagnostic tool for 
SMEs to disseminate easily and for a relatively small amount of effort, be able to 
ascertain feedback that will be helpful in terms of making strategic choices around 
their continued approach to circularity. There is no other diagnostic that measures 
attitudes and beliefs about the journey to circularity that aids strategic planning.