Sustainable Business Models: A Systematic Review of Approaches and Challenges in Manufacturing



Main Article Content

Ukeje Jacob Agwu
https://orcid.org/0000-0003-4842-6812 orcid
John Bessant
https://orcid.org/0000-0002-5040-4949 orcid

Abstract

Objective: there is an ongoing need for businesses to strive to maintain ideals within environmental, economic, and social values — commonly known as the triple bottom line. Manufacturing as a sector has advanced drastically and the literature on sustainable business models in this sector has emerged. The purpose of this paper is to analyze sustainable business models in manufacturing and the approaches and challenges faced in creating and implementing them. Methods: this paper uses a systematic approach to review the literature. We identify sustainable business models and classify them within different industry areas while strategies and challenges emerge from the literature. Results: the findings indicate that there is some empirical work done in investigating the social and environmental dimensions of sustainability in manufacturing. Overall, there is an ongoing transition to sustainable business models in varying divisions of industry. However, the creation and delivery of sustainable economic value is still unexplored. Conclusions: the research provides insight to researchers and practitioners on how organizations implement sustainability while delivering value to their stakeholders. It also provides new avenues for conducting research in unexplored strategies of sustainable business modeling.



Downloads

Download data is not yet available.


Article Details

How to Cite
Agwu, U. J., & Bessant, J. (2021). Sustainable Business Models: A Systematic Review of Approaches and Challenges in Manufacturing. Journal of Contemporary Administration, 25(3), e200202. https://doi.org/10.1590/1982-7849rac2021200202.en
Section
Articles

References

Aagaard, A. (2019). Sustainable business models: Innovation, implementation and success. London: Palgrave Macmillan
Adams, R., Jeanrenaud, S., Bessant, J., Denyer, D., & Overy, P. (2016). Sustainability-oriented innovation: A systematic review. International Journal of Management Reviews, 18(2), 180–205. https://doi.org/10.1111/ijmr.12068
Anand, S., & Sen, A. (2000). Human development and economic sustainability. World Development, 28(12), 2029–2049. https://doi.org/10.1016/S0305-750X(00)00071-1
Andersen, M. M. (2015, December). Frugal innovation and green business models. ISPIM Innovation Summit, Brisbane, Australia. Retrieved from https://orbit.dtu.dk/en/publications/frugal-innovation-and-green-business-models
Bocken, N. M. P., Pauw, I. D., Bakker, C., & Van Der Grinten, B. (2016). Product design and business model strategies for a circular economy. Journal of Industrial and Production Engineering, 33(5), 308-320. https://doi.org/10.1080/21681015.2016.1172124
Bocken, N. M. P., Short, S. W., Rana, P., & Evans, S. (2014). A literature and practice review to develop sustainable business model archetypes. Journal of Cleaner Production, 65, 42-56. https://doi.org/10.1016/j.jclepro.2013.11.039
Bocken, N. M. P., Weissbrod, I., & Tennant, M. (2016). Business model experimentation for sustainability. In R. Setchi, R. J. Howlett, Y. Liu, & P. Theobald (Eds.), Sustainable Design and Manufacturing 2016. Berlin: Springer Science and Business Media Deutschland GmbH. https://doi.org/10.1007/978-3-319-32098-4_26
Bogers, M., Chesbrough, H., & Strand, R. (2020). Sustainable open innovation to address a grand challenge: Lessons from Carlsberg and the green fiber bottle. British Food Journal, 122(5), 1505-1517. https://doi.org/10.1108/BFJ-07-2019-0534
Caldera, H. T. S., Desha, C., & Dawes, L. (2017). Exploring the role of lean thinking in sustainable business practice: A systematic literature review. Journal of Cleaner Production, 167, 1546–1565. https://doi.org/10.1016/j.jclepro.2017.05.126
Carayannis, E. G., Sindakis, S., & Walter, C. (2015). Business model innovation as lever of organizational sustainability. Journal of Technology Transfer, 40(1), 85–104. https://doi.org/10.1007/s10961-013-9330-y
Carroll, C., Booth, A., & Cooper, K. (2011). A worked example of “best fit” framework synthesis: A systematic review of views concerning the taking of some potential chemopreventive agents. BMC Medical Research Methodology, 11(1), 29. https://doi.org/10.1186/1471-2288-11-29
Carroll, C., Booth, A., Leaviss, J., & Rick, J. (2013). “Best fit” framework synthesis: Refining the method. BMC Medical Research Methodology, 13, 37. https://doi.org/10.1186/1471-2288-13-37
Casadesus-Masanell, R., & Ricart, J. E. (2010). From strategy to business models and onto tactics. Long Range Planning, 43(2–3), 195–215. https://doi.org/10.1016/j.lrp.2010.01.004
Cioffi, R., Travaglioni, M., Piscitelli, G., Petrillo, A., & Parmentola, A. (2020). Smart manufacturing systems and applied industrial technologies for a sustainable industry: A systematic literature review. Applied Sciences, 10(8), 2897. https://doi.org/10.3390/app10082897
Clinton, L., & Whisnant, R. (2019). Business model innovations for sustainability. In G. G. Lenssen, & N. C. Smith (Eds.), Managing sustainable business: An executive education case and textbook (pp. 463–503). Amsterdam: Springer Netherlands. https://doi.org/10.1007/978-94-024-1144-7_22
Crals, E., & Vereeck, L. (2004, February). Sustainable entrepreneurship in SMEs: Theory and practice. Proceedings of the global conference on environmental justice and global citizenship, Copenhagen, Denmark, 3. Retrieved from https://growthorientedsustainableentrepreneurship.files.wordpress.com/2016/07/en-sustainable-entrepreneurship-in-smes.pdf
Crowther, M. A., & Cook, D. J. (2007). Trials and tribulations of systematic reviews and meta-analyses. hematology. Hematology ASH Education Program, 2007(1), 493-497. https://doi.org/10.1182/ASHEDUCATION-2007.1.493
Denyer, D., & Tranfield, D. (2009). Producing a systematic literature review. In D. Buchanan & A. Bryman (Eds.), The SAGE handbook of organizational research methods (pp. 671–689). Newbury Park, CA: Sage Publications.
Doganova, L., & Eyquem-Renault, M. (2009). What do business models do? Innovation devices in technology entrepreneurship. Research Policy, 38(10), 1559–1570. https://doi.org/10.1016/j.respol.2009.08.002
Elkington, J. (1994). Towards the sustainable corporation: Win-win-win business strategies for sustainable development. California Management Review, 36(2), 90-100. https://doi.org/10.2307/41165746
Elkington, J. (1997). Cannibals with forks: The triple bottom line of 21st century business. Mankato, MN: Capstone.
Elkington, J. (1998). Partnerships from cannibals with forks: The triple bottom line of 21st‐century business. Environmental Quality Management, 8(1), 37-51. https://doi.org/10.1002/tqem.3310080106
Esty, D. C., & Winston, A. S. (2006). Green to gold: How smart companies use environmental strategy to innovate, create value, and build competitive advantage. Hoboken, NJ: Wiley.
Fargnoli, M., Costantino, F., Di Gravio, G., & Tronci, M. (2018). Product service-systems implementation: A customized framework to enhance sustainability and customer satisfaction. Journal of Cleaner Production, 188, 387–401. https://doi.org/10.1016/j.jclepro.2018.03.315
Fisher, A. G. B. (1945). Economic progress and social security. London: Macmillan and Company.
Freudenreich, B., Lüdeke-Freund, F., & Schaltegger, S. (2020). A stakeholder theory perspective on business models: Value creation for sustainability. Journal of Business Ethics, 166, 3-18. https://doi.org/10.1007/s10551-019-04112-z
García-Muiña, F. E., Medina-Salgado, M. S., Ferrari, A. M., & Cucchi, M. (2020). Sustainability transition in industry 4.0 and smart manufacturing with the triple-layered business model canvas. Sustainability, 12(6), 2364. https://doi.org/10.3390/su12062364
Garetti, M., & Taisch, M. (2012). Sustainable manufacturing: Trends and research challenges. Production Planning and Control, 23(2-3), 83–104. https://doi.org/10.1080/09537287.2011.591619
Geibler, J. V., Liedtke, C., Wallbaum, H., & Schaller, S. (2006). Accounting for the social dimension of sustainability: Experiences from the biotechnology industry. Business Strategy and the Environment, 15(5), 334–346. https://doi.org/10.1002/bse.540
González-Varona, J. M., Poza, D., Acebes, F., Villafáñez, F., Pajares, J., & López-Paredes, A. (2020). New business models for sustainable spare parts logistics: A case study. Sustainability, 12(8), 3071. https://doi.org/10.3390/su12083071
Gupta, N., & Benson, J. (2011). Sustainability and competitive advantage: An empirical study of value creation. Competition Forum, 9(1), 121–137. Retrieved from http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2037493
Hankammer, S., Jiang, R., Kleer, R., & Schymanietz, M. (2018). Are modular and customizable smartphones the future, or doomed to fail? A case study on the introduction of sustainable consumer electronics. CIRP Journal of Manufacturing Science and Technology, 23, 146–155. https://doi.org/10.1016/j.cirpj.2017.11.001
Hazarika, A. (2015). History and significance of CSR and social audit in business: Setting a regulatory framework. In M. M. Rahim, & S. O. Idowu (Eds.), Social audit regulation: Development, challenges and opportunities (pp. 217–256). Cham, Switzerland: Springer, Cham. https://doi.org/10.1007/978-3-319-15838-9_12
Hogevold, N. M., & Svensson, G. (2012). A business sustainability model: A European case study. Journal of Business & Industrial Marketing, 27(2), 142–151. https://doi.org/10.1108/08858621211197001
Homrich, A. S., Theodoro, D. S., & Carvalho, M. M. (2017). PSS creating business for sustainability: The Brazilian olive oil case in Mantiqueira community. Procedia CIRP, 64, 405–410. https://doi.org/10.1016/j.procir.2017.03.110
Jacques, J. J., Agogino, A. M., & Guimaraes, L. B. M. (2010, August). Sustainable product development initiatives in the footwear industry based on the cradle to cradle concept. Proceedings of the ASME Design Engineering Technical Conference (pp. 473–481), Montreal, Canada, 6. https://doi.org/10.1115/DETC2010-29061
Jiao, N., & Evans, S. (2017). Business models for sustainability: The case of repurposing a second-life for electric vehicle batteries. In G. Campana, R. J. Howlett, R. Setchi, & B. Cimatti (Eds.), Sustainable Design and Manufacturing 2017 (pp. 537–545.) Cham, Swtizerland: Springer, Cham.
Joyce, A., & Paquin, R. L. (2016). The triple layered business model canvas: A tool to design more sustainable business models. Journal of Cleaner Production, 135, 1474–1486. https://doi.org/10.1016/j.jclepro.2016.06.067
Kemp, R., & Andersen, M. (2004). Strategies for eco-efficiency innovation. IMR strategielijnen project voor VROM. Maastricht Economic Research Institute on Innovation and Technology, Maastricht, Netherlands.
Kiel, D., Muller, J. M., Arnold, C., & Voigt, K.-I. (2017). Sustainable industrial value creation: Benefits and challenges of industry 4.0. International Journal of Innovation Management, 21(8), 1740015. https://doi.org/10.1142/S1363919617400151
Kravchenko, M., Pigosso, D. C., & McAloone, T. C. (2019). Towards the ex-ante sustainability screening of circular economy initiatives in manufacturing companies: Consolidation of leading sustainability-related performance indicators. Journal of Cleaner Production, 241, 118318. https://doi.org/10.1016/j.jclepro.2019.118318
Li, X., Cao, J., Liu, Z., & Luo, X. (2020). Sustainable business model based on digital twin platform network: The inspiration from haier’s case study in China. Sustainability, 12(3), 936. https://doi.org/10.3390/su12030936
Lin, Y., Li, J., Huang, X., Guo, Z., Sun, Y., & Zhang, R. (2018). Exploring a sustainable business routing for China’s new energy vehicles: BYD as an example. In K. Li, J. Zhang, M. Chen, Z. Yang, & Q. Niu (Eds.), Advances in green energy systems and smart grid. Singapore: Springer Singapore.
Lindstrom, J. (2016). When moving from products and services towards functional products: Which sustainability-oriented customer values are of interest? Procedia CIRP, 48, 16–21. https://doi.org/10.1016/j.procir.2016.03.027
Lüdeke- Freund, F. (2010, October). Towards a conceptual framework of business models for sustainability. Proceedings of the Knowledge collaboration & learning for sustainable innovation ERSCP-EMSU Conference, Delft, Netherlands, 49. https://doi.org/10.13140/RG.2.1.2565.0324
Lyytinen, T. (2017). Sustainable business models of small-scale renewable energy systems: Two resource-scarce approaches for design and manufacturing. In G. Campana, R. J. Howlett, R. Setchi, & B. Cimatti (Eds.), Sustainable Design and Manufacturing 2017 (pp. 493–504). Cham, Swtizerland: Springer, Cham.
Maçaneiro, M. B., & Cunha, S. K. (2014). Contextual factors as drivers of eco-innovation strategies. In S. G. Azevedo, M. Brandenburg, H. Carvalho, & V. Cruz-Machado (Eds.), Eco-innovation and the development of business models (pp. 137–162). Cham, Swtizerland: Springer, Cham. https://doi.org/10.1007/978-3-319-05077-5_8
Magretta, J. (2002). Why business models matter. Harvard Business Review, 80(5), 86-92. Retrieved from https://hbr.org/2002/05/why-business-models-matter
Marcus, A. (2018). The role of human resource management (HRM) for the implementation of sustainable product-service systems (PSS) — An analysis of fashion retailers. Sustainability, 10(7), 2518. https://doi.org/10.3390/su10072518
Massa, L., Tucci, C. L., & Afuah, A. (2017). A critical assessment of business model research. Academy of Management Annals, 11(1). https://doi.org/10.5465/annals.2014.0072
McLennan, S., & Banks, G. (2019). Reversing the lens: Why corporate social responsibility is not community development. Corporate Social Responsibility and Environmental Management, 26(1), 117–126. https://doi.org/10.1002/csr.1664
Moratis, L., Melissen, F., & Idowu, S. O. (2018). Sustainable business models: Principles, promise, and practice. Cham, Swtizerland: Springer, Cham. https://doi.org/10.1007/978-3-319-73503-0
Pacheco, D. A. J., Caten, C. S. T., Jung, C. F., Sassanelli, C., & Terzi, S. (2019). Overcoming barriers towards sustainable product-service systems in small and medium-sized enterprises: State of the art and a novel decision matrix. Journal of Cleaner Production, 222, 903–921. https://doi.org/10.1016/j.jclepro.2019.01.152
Pinna, C., Demartini, M., Tonelli, F., & Terzi, S. (2018). How soft drink supply chains drive sustainability: Key performance indicators (KPIs) identification. Procedia CIRP, 72, 862–867. https://doi.org/10.1016/j.procir.2018.04.008
Pojasek, R. B. (2012). Implementing a sustainability management system. Environmental Quality Management, 22(1), 83–90. https://doi.org/10.1002/tqem.21319
Porter, M. E., & Van Der Linde, C. (1995). Green and competitive: Ending the stalemate. Harvard Business Review, 73(5). Retrieved from https://hbsp.harvard.edu/product/95507-PDF-ENG
Rajala, R., Westerlund, M., & Lampikoski, T. (2016). Environmental sustainability in industrial manufacturing: Re-examining the greening of interface’s business model. Journal of Cleaner Production, 115, 52–61. https://doi.org/10.1016/j.jclepro.2015.12.057
Reim, W., Lenka, S., Frishammar, J., & Parida, V. (2017). Implementing sustainable product-service systems utilizing business model activities. Procedia CIRP, 64, 61–66. https://doi.org/10.1016/j.procir.2017.03.130
Ritala, P., Huotari, P., Bocken, N., Albareda, L., & Puumalainen, K. (2018). Sustainable business model adoption among S&P 500 firms: A longitudinal content analysis study. Journal of Cleaner Production, 170, 216–226. https://doi.org/10.1016/j.jclepro.2017.09.159
Stubbs, W., & Cocklin, C. (2008). Conceptualizing a “sustainability business model.” Organization and Environment, 21(2), 103–127. https://doi.org/10.1177/1086026608318042
Teece, D. J. (2010). Business models, business strategy and innovation. Long Range Planning, 43(2–3), 172–194. https://doi.org/10.1016/J.LRP.2009.07.003
Thorpe, R., Holt, R., Macpherson, A., & Pittaway, L. (2005). Using knowledge within small and medium-sized firms: A systematic review of the evidence. International Journal of Management Reviews, 7(4), 257–281. https://doi.org/10.1111/j.1468-2370.2005.00116.x
Tonelli, F., Evans, S., & Taticchi, P. (2013). Industrial sustainability: Challenges, perspectives, actions. International Journal of Business Innovation and Research, 7(2), 143–163. Retrieved from http://www.inderscience.com/offer.php?id=52576
Tranfield, D., Denyer, D., & Smart, P. (2003). Towards a methodology for developing evidence-informed management knowledge by means of systematic review. British Journal of Management, 14(3), 207–222. https://doi.org/10.1111/1467-8551.00375
Wanniarachchi, T., Dissanayake, K., & Downs, C. (2020). Improving sustainability and encouraging innovation in traditional craft sectors: The case of the Sri Lankan handloom industry. Research Journal of Textile and Apparel, 24(2), 111-130. https://doi.org/10.1108/RJTA-09-2019-0041
Willard, B. (2005). The next sustainability wave: Building boardroom buy-in. Gabriola, Canada: New Society Publishers.
World Commission on Environment and Development. (1987). Our common future (the Brundtland comission report). Oxford: Oxford University Press. Retrieved from https://sustainabledevelopment.un.org/content/documents/5987our-common-future.pdf
Yang, M., Evans, S., Vladimirova, D., & Rana, P. (2017). Value uncaptured perspective for sustainable business model innovation. Journal of Cleaner Production, 140, 1794–1804. https://doi.org/10.1016/j.jclepro.2016.07.102
Yunus, M., Moingeon, B., & Lehmann-Ortega, L. (2010). Building social business models: Lessons from the grameen experience. Long Range Planning, 43(2–3), 308–325. https://doi.org/10.1016/j.lrp.2009.12.005
Zott, C., Amit, R., & Massa, L. (2011). The business model: Recent developments and future research. Journal of Management, 37(4), 1019-1042. https://doi.org/10.1177/0149206311406265
Zott, C., & Amit, R. (2013). The business model: A theoretically anchored robust construct for strategic analysis. Strategic Organization, 11(4), 403-411. https://doi.org/10.1177/1476127013510466