The role of interactions in business network transitions toward circular business models

Journal article, 2026

Circular economy (CE) is getting increased attention from industrial actors as a response to sustainability concerns. In the industrial business network, CE enables firms to transition from linear to circular business models (CBM), requiring structural change and interactions that unfold during the process. The nature and role of these interactions during and for the transition to CBM is underexplored. Using a process-oriented case study approach, we examine a single in-depth case of a firm shifting its business from linear to circular, showing how interactions can trigger, support or hinder the transition, developing throughout this process at different firm, buyer-supplier relationship and network levels. This study advances CBM research by combining the industrial marketing and purchasing (IMP) conceptualizations with multi-level perspective (MLP) on sustainability transitions, situating micro-level interaction processes within the meso and macro context of CE transitions. The study shows that existing interactions generate the triggers that initiate circular transitions, and as the transition unfolds, new interactions emerge and cascade across firm, dyadic, and network levels. A multi-level framework explains how the nature of interactions develops from latent interactions to triggers and then cascade to shape the transition. For managers, circular transitions require ongoing, iterative engagement and trust-building with internal teams, suppliers, and customers, to create the underlying environment for circular practices.