This chapter examines relationships among stakeholders seeking to promote the transition to a circular economy. We ask what kinds of relationships there are among circular economy stakeholders and how the transition to a circular economy is accelerated through these relationships. Our empirical material consists of 35 semi-structured interviews with circular economy stakeholders from private, public and third-sector organisations at local, regional and national levels in Finland, a country that has set the goal of becoming a global circular economy leader by 2025. Our inductive analysis identifies four prevalent types of relationships in the multi-stakeholder network: (1) directive relationships, (2) mediative relationships, (3) collaborative relationships and (4) competitive relationships. We show that directive relationships provide the foundation for the circular economy and mediative relationships enable the broadening and deepening of network activities. Together, directive and mediative relationships enable and form a basis for the collaborative and competitive relationships central to the implementation of a circular economy. We conclude that all relationship types are necessary to enabling the circular economy transition.
Introduction
The circular economy has gained significant interest in recent times, as it has been recognised as a promising solution to many environmental and socio-economic sustainability challenges (Geissdoerfer et al., 2017; Murray et al., 2017). By transforming input and output flows into a regenerative and restorative system of production and consumption, the circular economy is expected to revitalise economies while promoting environmental and social well-being (Calisto Friant et al., 2020). The circular economy is often conceptualised as the reuse, redesign and recycling of products and services with the objective of minimising waste and conserving materials by lengthening their life cycles (Murray et al., 2017).
Transitioning to a circular economy requires the involvement of all actors in society (Ghisellini et al., 2016). Interest in effective and innovative multi-stakeholder networks is on the rise in relation to complex societal challenges such as the circular economy transition (Bäckstrand, 2006; Reypens et al., 2021; Selsky & Parker, 2005). Networks involving partners from different sectors are discussed using a variety of concepts: multi-stakeholder partnerships (Pinkse & Kolk, 2012), multi-stakeholder settings (Rühli et al., 2017), multi-sector interorganisational collaborations (Savage et al., 2010), multi-stakeholder issue networks (Saffer et al., 2018), social partnerships (Waddock, 1991), cross-sector partnerships (Selsky & Parker, 2005) and multi-stakeholder networks (Roloff, 2008).
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In this study, networks or partnerships in which stakeholders from the public, private and third sectors of society collaborate to address societal challenges are studied under the label of multi-stakeholder networks (Roloff, 2008). We use this term because it directs the focus towards the forms of engagement between stakeholders who come together to address an issue too complex to be addressed effectively without collaboration (Roloff, 2008). In multi-stakeholder networks, collaboration has unique potential in that it combines different stakeholders’ strengths and assets; however, it also entails tensions and challenges that differ from those arising within single-sector collaborative arrangements (Roloff, 2008; Savage et al., 2010).
This chapter examines the relationships among key stakeholders seeking to promote a circular economy transition. We ask the following research questions: (1) What kind of relationships are there among stakeholders who share an interest in promoting a circular economy? (2) How is the transition to a circular economy accelerated through these relationships? Theoretically, we build upon stakeholder theory (Freeman, 1984; Freeman et al., 2010), multi-stakeholder networks (Pinkse & Kolk, 2012; Roloff, 2008) and stakeholder engagement research (Kujala & Sachs, 2019; Kujala et al., 2022). Rather than the traditional, organisation-centred view of stakeholder engagement, this study adopts an issue-focused approach that examines a network of stakeholders who affect or are affected by an issue or problem (Pinkse & Kolk, 2012; Roloff, 2008)—in this case, a circular economy transition. Our empirical material consists of 35 semi-structured interviews with circular economy stakeholders from private, public and third-sector organisations at local, regional and national levels in Finland, a country that has set the goal of becoming a global circular economy leader by 2025.
This study identifies four prevalent types of relationships in the multi-stakeholder network: (1) directive relationships, (2) mediative relationships, (3) collaborative relationships and (4) competitive relationships. The study contributes to research at the intersection of stakeholder engagement, multi-stakeholder networks and circular economy in the following ways: First, the findings shed light on the types of relationships that exist among key circular economy stakeholders and highlight how different relationships contribute to the circular economy transition. We show that directive relationships provide a foundation for the circular economy and mediative relationships are necessary for facilitating and coordinating network activities. Together, directive and mediative relationships enable and form a basis for the collaborative and competitive relationships central to the implementation of a circular economy. Second, this study confirms the important role of mediative relationships in the promotion of a circular economy, particularly in terms of networking, facilitating discussion and the alignment of views and coordinating circular activities. Thus, the study shows how circular economy stakeholders are connected and how these connections promote the circular economy.
Multi-Stakeholder Networks in a Circular Economy
A central reason for the popularity of circular economic thinking is that it represents a promising attempt to integrate economic prosperity with environmental and social sustainability and well-being (Murray et al., 2017). Although its exact definition and meaning are debated (Calisto Friant et al., 2020; Kirchherr et al., 2017), the circular economy is commonly seen as a way of balancing economic concerns with sustainable development (Ghisellini et al., 2016). The aim of a circular economy is to minimise waste, emissions and energy leakages through slowing and closing the economy’s input and output flows as well as material and energy loops (Geissdoerfer et al., 2017). In contrast to linear economy or even steady state economy, a circular economy operates according to the laws of nature and has the ultimate aim of decoupling economic prosperity and growth from resource consumption (Ghisellini et al., 2016).
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While typical definitions of the circular economy have emphasised the three or four Rs (reduction, reuse, recycling and recovery), the focus in recent academic literature has shifted to a systemic view (Kirchherr et al., 2017). The systemic view highlights the need to enhance the performance of the whole system rather than merely of its components (Murray et al., 2017). It is also widely agreed that the circular economy necessitates transformations at all levels of society, from micro-level consumers and companies to macro-level actors such as nations and the EU (Ghisellini et al., 2016). At the national level, circularity necessitates the redesign of four systems: the industrial system, the infrastructural system (including transportation, communication, energy, water and recycling systems), the cultural framework and the social system (Ghisellini et al., 2016). Although there is disagreement as to who the key drivers of a circular economy are, researchers agree that the involvement of a broad range of stakeholders is necessary in order for the transition to a circular economy to actualise (Bocken et al., 2018; Geissdoerfer et al., 2017; Lieder & Rashid, 2016; Mishra et al., 2019). Moreover, Gonzalez-Porras et al. (2021) argue that in addition to individual stakeholders, stakeholder engagement and multi-stakeholder collaboration can act as agents of change in the circular economy transition.
Intermediary action is considered necessary in facilitating a systemic shift from the current linear economy to a circular one (Kivimaa et al., 2019). In sustainability transitions, mediating takes place between industries, sectors and stakeholders (Van Lente et al., 2003). Research shows that intermediary action can take a variety of forms and functions, although the following four forms are typical: facilitating learning and knowledge exchange, providing resources, brokering and supporting accountability and transparency (Kundurpi et al., 2021). In sustainability transitions, intermediaries also have systemic tasks such as articulating options and demand, aligning actors and supporting learning (Van Lente et al., 2003). Arenas et al. (2013) even found that third-party facilitators may enable a shift from conflicting relationships to collaborative ones; in their study, the third actor was able to function as a bridging organisation or enabling structure and help organisations move from confrontation to collaboration.
The notions of issue-focused stakeholder approach and multi-stakeholder network are particularly relevant in the circular economy context. An issue-focused stakeholder approach is useful to understanding settings wherein three or more stakeholders collaborate to address a shared problem or an issue too complex or broad to be solved by individual organisations (Easter et al., 2022; Pinkse & Kolk, 2012; Roloff, 2008). In an issue-focused approach, a stakeholder can be defined as a ‘group or individual who can affect or is affected by the approach to the issues addressed by the network’ (Roloff, 2008, p. 38), which implies that the stakeholder network exists to address an issue concerning all network participants (Heikkinen, 2017). On the other hand, multi-stakeholder networks are often used in the context of trisector initiatives (including state actors, companies and civil society organisations) aiming to combine the assets and strengths of each organisation (Selsky & Parker, 2005). These organisations may differ in terms of their organisational cultures, objectives, operating styles and logics (Jamali & Keshishian, 2009), and they join the network for various reasons. Business-to-business relationships are usually formed to create new markets, products or technologies and business-to-non-profit relationships to increase favourable publicity, goodwill or awareness, or to promote a cause (Wymer & Samu, 2003). However, multi-stakeholder networks are initiated around complex and multi-layered societal challenges that extend beyond the capacity of single organisations or individual sectors (Easter et al., 2022; Pinkse & Kolk, 2012). These messes, meta-problems or grand challenges require multi-sector collaboration to find suitable solutions (Easter et al., 2022; Selsky & Parker, 2005). In multi-stakeholder networks, the partnering organisations contribute resources to addressing the focal issue while capitalising on the strengths and competencies of other partners (Bäckstrand, 2006; Jamali & Keshishian, 2009). Collaboration in a multi-stakeholder network develops in stages, from initiation and negotiation of common approaches to the issue to concrete actions decided upon by the network, until the collaboration either institutionalises or runs its course (Heikkinen, 2017; Roloff, 2008).
Relationships in a Multi-Stakeholder Network
Relationships are the focus of many research streams such as network theory, supply chain, industrial marketing and industrial ecosystems literatures and stakeholder engagement research. While network theory and supply chain and industrial marketing and ecosystems research provide ample starting points for understanding established relationships in business-to-business industrial ecosystem contexts, stakeholder engagement research seeks also to acknowledge other kinds of relationships that can emerge among various stakeholders operating in the same context (Kujala et al., 2022).
It is noteworthy that the purpose and nature of a multi-stakeholder network provide unique characteristics to the relationships between network participants (Savage et al., 2010). First, when examining a multi-stakeholder network, the focus is set on the network, which consists of several stakeholders with separate, likely partly conflicting goals and ways of operating. Second, a multi-stakeholder network consists of a multiplicity of relationships ranging from formal and contractual to informal and personal ones. Third, the network is formed and maintained through social interaction; therefore, understanding the nature of this interaction is relevant to understanding the whole.
Recently, the literature on stakeholder engagement has shifted from analysing stakeholder attributes to analysing stakeholder relations (Freeman et al., 2017; Kujala & Sachs, 2019), and stakeholder engagement is currently understood as a relational process that emphasises stakeholder relationships (Kujala et al., 2022). Along these lines, Onkila (2011) recognises different types of stakeholder relationships and concludes that each type has different attributes and thus different requirements. Power-based relationships are one-sided relationships based on the power of one stakeholder over others, and are largely characterised by the powerful stakeholder’s demands and expectations. Conflicting relationships involve stakeholders with different demands, although, as the relationship is based on a somewhat equal distribution of power, the organisation only considers those demands that it finds legitimate. Collaborative relationships are characterised by continuous interaction, mutual trust and the acknowledgement of all stakeholders’ interests. Onkila (2011) concludes that stakeholder relationships are socially constructed in human interaction, and thus variable. Consequently, stakeholder engagement should also vary according to the situation, issue and context. Kujala and Korhonen (2017) analysed the elements of value-creating stakeholder relationships. They argue that the relationship begins with identifying joint interests and common objectives, followed by developing an ability to collaborate by clarifying each partner’s role and planning their actions. The ability to collaborate, along with clear roles and objectives for the collaboration, paves the way for a trusting and open relationship, the uniqueness and continuity of which is ensured by those very qualities. Myllykangas et al. (2010) identified six important characteristics of stakeholder relationships: (1) the history of the relationship, (2) the stakeholders’ objectives, (3) interactions, (4) information sharing, (5) trust and (6) potential for learning. Myllykangas et al. (2010) argue that stakeholders gain and lose different attributes over time, thus changing the stakeholder salience positions. This indicates that stakeholder relationships are processual and dynamic by nature.
However, stakeholder relationships are usually studied from the perspective of one company or industry, which is an approach quite different from analysing relationships in a multi-stakeholder network. In a multi-stakeholder network, none of the participants are in control of the interactions or activities through which the relationships are formed and maintained, but all contribute to them equally (Heikkinen, 2017). The network’s objectives and activities are negotiated among its participants, and they depend on the network’s life stage (Roloff, 2008). While interest in researching multi-stakeholder networks has grown in recent years (e.g., de Bakker et al., 2019), there has been less interest in how stakeholders connect and interact, particularly in a circular economy context.
Empirical Material and Analysis
This chapter examines the circular economy in Finland, a country that has set the goal of becoming a global circular economy leader by 2025. The analysis focuses on relationships and activities among key circular economy stakeholders. We adopt a qualitative method and an inductive, data-driven approach. A qualitative approach is suitable to studying the complex phenomenon of relationships among circular economy stakeholders (Butterfield et al., 2004).
To generate empirical data for our study, we interviewed 35 stakeholders at local, regional and national levels in May–June, 2020. The interviewed stakeholders included representatives of private, public and third-sector organisations that promote the circular economy in Finland. The interviews were thematic and focused on considerations and practices related to the circular economy, collaboration concerning the circular economy and the future of the circular economy in Finland. The stakeholders were grouped in seven categories: companies (8 interviews), ministries (5), industry organisations (5), research, innovation and support organisations (6), regional actors (5), cities and municipalities (4) and other (1). The interviews were conducted in Finnish via Teams or Skype, tape-recorded, transcribed by a professional transcription service and analysed using Atlas software. The interviews varied in length from 45 to 110 minutes.
Data analysis proceeded as follows: First, all transcribed material was downloaded to Atlas.ti software. The initial coding process included the coding of all interview passages that included references to interactions or connections between individuals or organisations. This process resulted in 142 pages of coded interview material. The analytical process continued with an inductive analysis of the material, the aim of which was to identify similar patterns and differences between patterns (Graneheim et al., 2017).
During the inductive analysis, the involved stakeholders and the connections and interactions between stakeholders were identified. The connections and interactions were first thematised and then categorised into emergent categories (Butterfield et al., 2004). Then, each identified relationship type was analysed more carefully, and the categories were revised and refined in several iterative rounds. The analysis focused on the activities through which the relationships were formed and maintained, the characteristics of the relationships and the expected benefits of the relationships.
Stakeholder Relationships in Catalysing a Circular Economy: A Typology of Relationships Among Circular Economy Stakeholders
Our analysis identified a typology of relationships among the circular economy stakeholders. The identified relationships are labelled directive, mediative, collaborative and competitive (Table 5.1). Each is formed and maintained through a set of activities and has defining characteristics and expected benefits.
Table 5.1
Types of relationships among circular economy stakeholders
Type of relationship
Activities
Characteristics
Expected benefits
Stakeholders
Directive
Regulating
Providing/applying for resources and permits
Town planning
Formulating policies and legislation
Steering
Giving feedback
Commenting on proposals and strategies
Participating in decision-making and strategy formulation
Research, innovation and support organisations Regional actors
Cities and municipalities
Collaborative
Advocating
Influencing attitudes and practices
Educating and informing
Gathering different views
Forming a joint stance
Knowledge sharing
Discussing
Sharing knowledge
Learning from each other
Consulting
Acting as an expert
Partnering
Setting objectives
Negotiating and planning actions
Agreeing on tasks and responsibilities
Solving problems together
Co-creating
Innovating
Voluntary
Two-way/multi-way communication
High interdependency
Relatively formal to informal
Resources
Profit
Learning
Innovation
Synergies
Competitive advantage
Shared value
All
Competitive
Competing
Competing for resources
Competing on the market
Unavoidable
Low interdependency
Resources
Profit
Renewal
Companies
Cities and municipalities
Directive Relationships
The first type of relationship is labelled directive. These relationships are largely obligatory and often one-way in nature. In directive relationships, power is distributed unevenly and multiple stakeholders are dependent on one other stakeholder, such as a government or municipal authority. The relationships are often guided by formal procedures and institutionalised roles and responsibilities. We identified directive relationships between authorities, cities and municipalities, or ministries and all other types of stakeholders. We also identified two sub-types of directive relationships, that is, regulating and steering relationships, which differ in certain ways.
Regulating relationships are typically short, institutionalised relationships in which the interaction follows formal requirements and procedures. Activities in regulating relationships include applying for and providing funding, permits, infrastructure or other resources. Although regulating relationships are not typical examples of stakeholder relationships, they were found to be relevant in a multi-stakeholder setting, as the development of the operational environment favourable to a circular economy often took place through regulating relationships:
Everybody needs permits, construction permits, environmental permits and all kinds of permits. Many laws guide our operation, waste law and environmental law, etc., and we hope that decision-makers make wise decisions that enable our operation and support the circular economy. (Company 4)
For instance, [a city] changed all cars and trucks it has to gas cars the other year. The city saw that here we create a market, and as a result, there were two distribution centres built. So, when the public sector creates these platforms, the private sector will follow. (Regional actor 3)
The public sector, especially cities, municipalities and regional actors, plays a crucial role in creating an operating environment that enables or accelerates the transition to a circular economy. This takes place through zoning for circular economy operations, providing platforms, developing the legislative and political environment and initiating markets for circular economy products and services. Although characterised by weak ties and a one-way flow of information, interactions through these relationships give authorities some indication of the needs, expectations and stances of other stakeholders. This information, however, often comes late and in a standard format. Therefore, to accelerate the transmission of other stakeholders’ messages to authorities, stakeholders sometimes act first and only then deal with the necessary bureaucracy:
I feel we, as the circular economy actors, need to unite as a front so that we get the authorities to commit to, to understand our view. Sometimes I feel the wheels of bureaucracy move so slowly that it is better for the circular economy actors to go forward with things, and adjust it after, in case the authorities disagree. (Company 7)
Regulating relationships were sometimes experienced as hindering or delaying the circular economy. As regulating relationships are coordinated and regulated by formal processes and official procedures, including bureaucracy, they were a source of frustration and sometimes seen to hinder good efforts to promote a circular economy. A representative of an industry organisation describes an occasion in which they were disappointed with the authorities’ decision:
In this case, it was sad that although we have laws about advancing the circular economy, when we appealed to [a Ministry] and the Parliament to extend the permit from three years to five years, they rejected it. Three years is a too-short time to collect and refine the material and to productise and commercialise it. But they concluded that there is no need to change the legislation, which is horrible. The same people who are supposed to be advancing the circular economy. (Industry organisation 3)
Although formal procedures and processes are needed to ensure the proper functioning of the state, region or city and the fair treatment of all individuals and organisations, they were considered complex, time consuming and sometimes disappointing. To enable the participation of other stakeholders in decision- and policy-making and to receive information about other stakeholders’ needs and concerns, authorities also interact with other stakeholders through less formal directive relationships.
Steering relationships include activities such as participating in policy formulation, planning, decision-making, strategy formulation or legislative work, or commenting on these. In steering relationships, authorities and decision-makers actively seek stakeholder participation through hearings, questionnaires or web-based discussions and through inviting comments on plans or proposals. Although the flow of communication is restricted to taking place at certain times and in specific instances, and although the authorities are in a more powerful position than the commenting or participating parties, asking for feedback and inviting other stakeholders to participate can be seen as a step towards more interactive and participative relationships:
Typically, when we formulate a strategy, we hear stakeholders, research institutes, professional organisations and federations and nature preservation organisations. (Ministry 2)
One of our tasks is collaboration with companies, from where we gain knowledge for our own operations and for developing our operation. Not only acquisitions, but also town planning, we learn what kind of issues we need to take into account. It is a dialogical process. (City and municipality 3)
The steering relationships identified in our study were two- or multi-way and included negotiating from diverse stances and consolidating conflicting interests. Therefore, they were characterised by a deeper level of engagement than regulating relationships. An example of a process that involved the participation and negotiation of various parties was the formulation of a government program, which actualised as a result of a long preparation process. An industry organisation representative describes the government program as follows:
Let’s say that there is nothing really negative from our viewpoint. Almost all the circular economy issues, investments and the like, are only positive. We did go through it really carefully and if there was something really horrible, we would know by now. (Industry organisation 7)
This quote illustrates that the stakeholders had a say in the process, although they did not know exactly what the final outcome would be. In steering relationships, stakeholders have a chance to comment on and influence decisions, policies and legislation, to name a few, although a single actor’s influence is quite limited and restricted to specific instances. Thus, the outcome of negotiation is often a compromise or a consolidation of various views.
Despite the purpose of enabling the participation of a wide range of stakeholders, multi-stakeholder processes wherein diverse views are considered were more time consuming, and thus caused frustration and fear of losing momentum. A ministry representative describes this frustration as follows:
And something that I can’t understand is that we do something, plan something for a year. Every day I feel like I was Dracula standing behind the window with rubber teeth yelling ‘couldn’t we do something already?’ (Ministry 3)
Although steering relationships enable the integration of other stakeholders’ views into the decision-making process, the processes itself can be slow and ineffective. Thus, authorities need to balance between directive, one-way and institutionalised interactions and more participative, multi-way processes that engage multiple stakeholders. Despite having the downsides discussed above, interaction through directive relationships—both regulating and steering—is a necessary means for providing and developing an operating environment favourable to a circular economy.
Mediative Relationships
Mediative relationships are organised around an intermediary stakeholder, that is, a stakeholder who facilitates connections between organisations, industries and contexts. Mediative relationships connect stakeholders to other stakeholders, thus playing a central role in forming and maintaining multi-stakeholder networks. In the empirical material, we identified facilitating and coordinating relationships. Although both types are grounded in intermediary action, they present certain differences.
Facilitating relationships consist of activities such as facilitating networking within and across industries and sectors and organising events and other opportunities to meet and network with a range of stakeholders. Facilitating relationships include mapping and aligning interests between stakeholders, negotiating views, facilitating resource gathering and securing funding. Stakeholders engage in facilitating relationships to find the opportunities, resources and partners needed to increase the circularity of their operations. Facilitating relationships are also a means of collecting diverse views and knowledge:
My task is to invite the group of people together and then we make coffee [laughs] and talk nice, and hope the actors find each other. (Regional actor 2)
We started to initiate an environmental responsibility network for companies, and in a way, my idea is to get companies to understand that often if you make an environmental investment in your production, facilities or logistics, it often means also saving money. (City or municipality 2)
We were involved in the process. Helping, advancing it. The collaboration that needs to be built towards the city and other companies that operate in the region. So, my work is very concrete, building networks and everyday life and connections and maintaining a dialogue and identifying needs. And giving information: ‘You could call them, they might have a solution for you.’ (Regional actor 3)
Facilitating relationships are often informal and characterised by weak ties. They sometimes connect a wide number of stakeholders across sectors and from multiple levels, thus having an important role in the forming and functioning of the multi-stakeholder network:
When we take this systemic goal that we want to develop, we invite all to participate. Some operate more in the core, very concrete, make decisions; but also those in the outer circle who are loosely connected to it. We take everyone in to the core and try to keep everyone in. To avoid anyone hampering it. (Research, innovation and support organisation 6)
Coordinating relationships often involve fewer stakeholders than facilitating relationships, where the inclusion of several organisations is typical. Moreover, coordinating relationships require a higher level of involvement from the relevant parties than facilitating relationships. Coordinating relationships consist of activities aimed at building, creating and maintaining circular economy projects, ecosystems or platforms that enable co-operation or circular flows of materials, as well as coordinating projects, material flows and processes between organisations. A representative of a research, innovation and support organisation describes their and other stakeholders’ activities in coordinating relationships:
They [a company] have strategic objectives concerning transition to a circular economy, and one of the objectives was that a certain amount of material they use is recycled. They use sand in their processes, and the world is kind of running out of sand, and they needed the sand from somewhere. We found an organisation that produced sand waste; the waste was not homogenous, but the local ELY-centre [Centre for Economic Development, Transport and the Environment] searched for know-how and found someone who helped transform the waste into raw material. (Research, innovation and support organisation 5)
Coordinating relationships differ from facilitating relationships in that the intermediary stakeholder is typically more involved in the operation of a project, platform or ecosystem, while in facilitating relationships the intermediary is less involved and often represents a neutral party. Coordinating relationships, particularly those with a systemic, multi-sector and multi-level approach were regularly called for in our study, as coordination was identified as a necessary activity in promoting a circular economy.
Both types of mediative relationships are also initiated by and organised among stakeholders other than those that have an intermediary role in society (such as industry organisations, research, innovation and support organisations, and regional actors). Mediative relationships are typically organised around a neutral agent, whose contribution is needed to establish common ground and integrate differing views:
In [the project], we had a neutral partner. Not completely impartial, but rather neutral. [The organisation] advanced it [the project] and everybody was able to influence it. We had a joint workshop, then more workshops and a lot of discussions, that is how we were able to clarify the joint message. (Company 4)
We got [an industry organisation] involved and organised a virtual co-creation and innovation workshop that was directed to bigger cities and was about how the industry can survive the Corona crisis and what kind of innovative solutions there could be. We did it pro bono, we offered virtual facilitation and the content and those who were involved needed to commit to an innovation hackathon. (Company 3)
This applies to both facilitating and coordinating relationships and is considered an important means of facilitating participation and inclusion and getting stakeholders to commit to a shared goal.
Collaborative Relationships
Collaborative relationships involve two or more stakeholders who work together voluntarily towards a variety of joint aims. They are characterised by mutual dependency, strong ties, equality and two- or multi-way flows of communication, even dialogue. We identified three types of collaborative relationship: advocating, knowledge sharing and partnering. The mutual dependency and depth of involvement was lowest in advocating relationships and highest in partnering relationships.
Advocating relationships bring stakeholders together to negotiate and to influence attitudes, practices and ways of operating. Advocating relationships include activities such as gathering knowledge and different views, discussing, negotiating and forming a joint stance. They also involve educating and informing consumers, contractors, or decision-makers and lobbying or advocating an issue. The purpose is to drive a change in attitudes concerning the circular economy and to integrate circular economic thinking into the design of products, business models and processes and into everyday practices. The advocating relationships in our study were often temporary, the interaction varying from separate meetings to somewhat established groups. Advocating relationships are considered beneficial in terms of allowing important issues to be discussed, a variety of views to be presented and decisions made concerning how to proceed:
In cooperation, we clarify our goal and message, and that is what we tell decision-makers and funders and everyone who can do something to advance it. (Company 4)
I think the most central issue is to produce knowledge for people so that the message goes through. It has a huge influence. The message has to come in the right form and right way. We have, of course, paid attention to how people can be engaged and how we get the information to them, and how to get information from them. (Company 2)
Knowledge-sharing relationships emerged frequent from our material. They include activities such as discussing with other stakeholders, sharing knowledge, learning from them, consulting or acting as an expert. Their central purpose is to share expertise and experiences, learn and discuss with other circular economy stakeholders. These knowledge-sharing relationships were mostly longer-term relationships consisting of two-way communication or even dialogue. They required trust and openness among collaborators, although they did not necessarily include sharing knowledge of core business ideas or other sensitive information.
It all begins from trust and that everybody benefits from the collaboration. And open mind, too. Very open sharing of your knowledge and learning is needed, the need has come from companies, they need possibilities to share their know-how, so that everybody does not need to make the same mistakes. (Development, innovation and research organisation 5)
And [a project], it has brought to me and to the whole region a lot of networks and knowledgeable people. It has twenty partners from all over Finland and from there we find people to talk about what they do and how. (Regional actor 2)
Partnering relationships are the third form of collaborative relationship. Partnering signifies commitment between two or more organisations that aim to achieve their objectives by combining their resources. Partnering relationships include activities such as setting objectives for collaboration, negotiating and determining actions to be taken and agreeing on the roles and distribution of work. Partnering takes place between many categories of stakeholders, between the public and private sectors, between different public sector organisations and, interestingly, also between competing companies. Partnering involves actors more deeply than advocating and knowledge sharing, and likewise involves access to partners’ resources or capabilities that the organisation would not otherwise have. Partnering requires trust, openness, reciprocity and complementary resources, and is a frequent type of collaboration in the circular economy context. At best, partnering includes an element of co-creation and consists of activities aimed at problem-solving, innovation and co-creation. Partnering relationships are distinct from advocating and knowledge sharing in that they deal with organisations’ core capabilities and operations, and can thus generate collaborative advantage and shared value. Partnering relationships are synergistic and able to generate novelty or innovativeness.
When you find a pioneer customer, who is a little better than us, but we have some unique viewpoint to add, collaborating with that kind of customer and partner is the most interesting. (Company 2)
I think that in Finland, we have understood the importance of openness, and I am a great advocate of co-creation. It is not the easiest route, in co-creation all partners need to feel they can influence and they get something from it, and that the actors are all equal. It is challenging to get many parties to discuss an issue, at least nowadays when everyone is busy, but I see that, although it would be the hard way, the outcome is always better. (Company 4)
We have tested different alternatives with [a company’s] Gyro Gearloose, with synthetic fibres, with polypropylene, and we made a brilliant test patch. (Regional actor 1)
Partnering relations are the tightest form of collaboration and, at best, enable groups of organisations to expand the sum of their capacities. An interviewee describes a successful partnership:
It has to have a right mix. Not too many people. It has to have a challenge. You know the program ‘survivor’, that you don’t just tell everything you know and be wise like ‘I learned in the scout that…’ or ‘When I was in the army…’, but there is a shared challenge. It is shared; how the heck do we manage here in the woods, or where are we and how do we get home. In other words, the plane has crashed and we have to work together. And everybody brings their knowledge to solve the problem, instead of showing how wise they are. (Other organisation 1)
This kind of synergistic partnership, which can tackle difficult issues, was identified as a necessary form of collaboration. Although on a large scale this type of collaboration appeared to be more an ideal to strive for than a reality, the data contained several examples of partnering relationships. All three types of collaborative relations were frequent in the data and were at the core of circular economy-related multi-stakeholder networks.
Competitive Relationships
There are various types of competition; however, the competition observed by our study was market competition and competition for scarce resources, such as funding. There were few references to competition, but enough to represent a fourth type of relationship. Competitive relations were considered to force stakeholders to rethink and renew their operations and to find their own specialisations. However, too much competition was considered negative. Interestingly, in reference to market competition, organisations that competed with one another were also shown to collaborate, as illustrated by the following:
This form of collaboration is the most typical, in which all the partners that we collaborate with as providers are actually our competitors. The collaboration typically begins when we need a partner to win a competition. We call our competitors and ask who can collaborate with us to go forward with it. (Company 3)
…It [new legislation] made it visible that this kind of platform already exists, some of them have run aground, but in fact we are competing with one, since [an organisation] launched their platform a week before us. But that’s competition. And in fact, with them we talk more about collaboration than competition. (Development, innovation and research organisation 4)
While competitive relationships were identified in the material, they often existed between the same organisations that had collaborative relationships. In the circular economy context, the stakeholders in competitive relationships also interact and are involved with one another through some other type of relationship, often collaborative or mediative. Thus, these relationships can also be categorised as coopetition (Bouncken et al., 2015). Although competitive relationships is the vaguest category, it reveals that there is also competition in the network of key circular economy stakeholders and that, in a circular economy context, competitive relationships often co-exist with other types of relationships.
Stakeholder Relationships and Their Roles in Accelerating the Circular Economy
In the multi-stakeholder network, stakeholders interact through different relationships that contribute to the acceleration of a circular economy in different ways. Although directive relationships are often obligatory, they are a central type of relationship between circular economy stakeholders, as it is through them that authorities regulate and steer the development of the operating environment. Through directive relationships with the authorities (particularly steering relationships), other stakeholders can influence infrastructural decisions, which can, in turn, allow or even motivate them to implement circular practices. Although directive relationships are formal, often one-way and sometimes experienced as frustrating, they are necessary to provide the foundation for other circular economy activities through suitable infrastructure and favourable legislative, political and market environments.
Mediative relationships are voluntary, often informal and serve a different purpose. Facilitating relationships connect stakeholders and facilitate broadening the network and finding suitable partners for various needs, while coordinating relationships enable forming tighter organisational networks such as ecosystems. Coordinating relationships in particular are imperative for the circular economy, as identifying and coordinating material streams and connecting stakeholders capable of enhancing the circularity of material and resource streams are processes that enable the implementation of a circular economy.
Collaborative relationships are at the core of circular economy implementation, as stakeholders from various sectors join resources to advocate the adoption of a circular economy, share their expertise and learn, and, eventually, innovate and co-create. Among the collaborating stakeholders, there are also those who compete. Although too much competition may have negative consequences, some competition among stakeholders forces them to sharpen their specialisations, renew and improve their operations.
Figure 5.1 summarises the roles different types of relationships play in accelerating the circular economy. The relationships serve different purposes, thus contributing to the promotion of circular economy transition in a variety of ways.
3 overlapping circles illustrate 3 circular economy relationships. The circular economy is built on directive relationships. Meditative relationships allow the network to broaden and develop. Collaborative and competitive relationships help circular economy implementation.
Fig. 5.1
Stakeholder relationships and their roles in accelerating the circular economy
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The functioning of a multi-stakeholder network requires interactions through all types of relationships. Directive and mediative relationships are typically necessary for initiating collaborative and competitive relationships, as is illustrated by the following:
I think the municipal circular economy parks are a good example. There you cluster circular businesses. The municipality makes the town planning, possibly around an old waste incinerator, and then companies join, and one’s side stream is another one’s resource. And a municipal trade organisation supports and town planning is organised to support their needs. They call them innovation platforms, but it’s not only about innovation, it is about financially viable business. (Industry organisation 6)
The above illustrates the variety of relationships through which the stakeholders interact in setting up a circular economy park. However, relationships also evolve over time. Interaction through directive relationships can turn into mediation, collaboration or competition, and mediative relationships can evolve into collaborative relationships, some of which develop into partnerships over time:
There was a guy who had invented a logistics app and applied for funding. I pointed out that there were [a professional group] missing from the app. He said that they had not gone digital yet, so he could not reach them. Then a [member of the professional group] also applied for funding, for a different project, and I called him and said, ‘this is all crap this application, I cannot fund you, but you know, they say that your industry does not even have websites’. --- Then he invited me to their Christmas party to give a speech. I went there and said, ‘now that you have had your morning beer, I will talk straight to you’. I did not get far with my presentation when they started talking with each other, which is a good sign. Then there were angry questions and the third wave when they started asking ‘how do we get money?’ I hope this pushes them forward in the value network, that they find each other and can provide the needed services together. (Ministry 3)
Collaborative relationships may become competitive or vice versa, sometimes with the help of actions performed in mediative relationships (cf. Arenas et al., 2013). Thus, although the relationship categories appear simple and clear-cut, it should be noted that our typology is a simplification for the sake of presentation and comprehensibility, and the categories’ boundaries are neither as simple nor as clear-cut as they seem. Rather, the typology categorises the main relationships constituting the multi-stakeholder networks of key circular economy stakeholders and sheds light on how these relationships contribute to the circular economy.
Discussion
This study contributes to research at the intersection of stakeholder engagement, multi-stakeholder networks and circular economy by shedding light on the types of relationships that exist in the network of key circular economy stakeholders, and by highlighting how different relationships contribute to the circular economy transition. We found that directive relationships provide the foundation for a circular economy and that mediative relationships enable the broadening and deepening of the multi-stakeholder network. Directive and mediative relationships together lay the ground for the collaborative and competitive relationships that are central to implementing a circular economy.
The study also highlights the characteristics and benefits of the relationship types and the differences within a single type of relationship. For instance, to understand the nature and importance of directive relationships, it is useful to understand their two sub-types, that is, regulative and steering relationships. While many of the directive relationships are regulating, with a one-way flow of communication and dependency, there are also directive relationships that invite participation or even enable negotiation, here labelled steering relationships. Similarly, this study highlights that collaborative relationships vary from relatively loose, temporary interactions to close partnerships. Collaboration for advocacy refers to relationships with a shared purpose, although they are looser and often temporary. Knowledge sharing requires trust and closer engagement, while partnering is the tightest form of collaboration, wherein partners combine their resources and competences to create value together (Austin & Seitanidi, 2012; Myllykangas et al., 2010).
As a second contribution, this study highlights the central role of directive relationships in a multi-stakeholder network advancing a circular economy. Although relationships that are obligatory and based on institutionalised roles and responsibilities are typically not the focus of stakeholder engagement literature, this study’s findings highlight their importance. In addition to regulating and steering stakeholders’ actions, directive relationships are a central means of influencing the political, legislative and infrastructural environments.
This study’s third contribution is that it raises the fact that mediative relationships are often formed around various types of organisations, whereas previous studies have highlighted the role of intermediaries, that is, those actors who have been assigned to intermediary roles (Kivimaa et al., 2019; Van Lente et al., 2003). Mediating action has been found useful in transforming conflicting relationships into collaborative ones (Arenas et al., 2013). This study confirms the important role of mediative relationships in the promotion of a circular economy, particularly in terms of networking, facilitating discussion and aligning views, and providing resources (Kundurpi et al., 2021). Based on our findings, facilitating relationships are often oriented towards social interactions such as learning, sharing knowledge and connecting stakeholders, while coordinating relationships are more technical and contribute to establishing or maintaining value networks. Mediative relationships also contain what Van Lente et al. (2003) call relationships with a systemic approach, which contribute to articulating societal needs, involving many stakeholders and aligning various perspectives.
Fourth, our findings complement Kujala and Korhonen’s (2017) findings in suggesting that mediative relationships have an important role in enabling stakeholders to identify joint interests and objectives, which is the first step in building value-creating stakeholder relationships. This study also confirms previous findings that the ability to collaborate as well as the establishment of clear roles and objectives are characteristic of collaborative relationships (ibid.). Additionally, this study complements previous findings (ibid.) by raising the fact that partnerships require complementary skills or resources, reciprocity and high levels of trust and openness in order to become synergistic and enable shared value creation.
To conclude, this study contributes to research on stakeholder engagement in the circular economy (Gonzalez-Porras et al., 2021; Marjamaa et al., 2021) by shedding light on how circular economy stakeholders are connected and how these connections promote the circular economy. Each type of relationship has its role in accelerating the transition and, thus, is worthy of future study. Formulating a typology of relationships in a multi-stakeholder network has resulted in an overview of these relationships; by consequence, it has not been possible to pay attention to all the particularities, complexities and interdependencies that exist within the stakeholder network, which is a limitation of this chapter. This typology, then, is a simplification, and captures some shared characteristics of and differences between the relationships.
This chapter focuses on how different relationships accelerate the transition to a circular economy and, therefore, potential challenges and discrepancies in stakeholder relationships have not been discussed. This limitation points to a potential future research avenue, which is to explore, in particular, those issues in stakeholder relationships that may delay and hinder the adoption and implementation of a circular economy. Additionally, as the focus, here, has been on the typology of relationships among circular economy stakeholders, an analysis of the more specific content of relationships within one relationship type would provide a more fine-grained understanding of how the stakeholders are connected to one another. Similarly, it would be valuable to study the characteristics and activities of the stakeholders involved in the different types of relationships.
Moreover, as typical for case studies from one particular context, the context of this study is one of its limitations. Although Finland as one of the leading circular economy countries is an interesting context for research, the findings from this study cannot be directly applied to other contexts. Therefore, it would be important to study stakeholder relationships in other countries, similarly as in other empirical contexts, where stakeholders come together to promote a joint objective.
Conclusions
The aim of this chapter was to explore relationships among the key circular economy stakeholders in Finland and discuss how these relationships contribute to transitions towards a circular economy. We identified four types of relationships that are directive, mediative, collaborative and competitive and discussed their purposes, characteristics and the activities through which they are maintained. Directive relationships provide a foundation for activities in the collaborative and competitive relationships, while mediative relationships are necessary to initiate and provide a ground for collaboration. Much of the core activities of the multi-stakeholder network take place in collaborative relationships, even in collaborative value networks consisting of several organisations. However, forming of collaborative relationships often requires interactions through other types of relationships, particularly mediating relationships and directive relationships. In addition, despite the shared interest in promoting the circular economy, the stakeholders do not only interact with each other in a collaborative manner, but also relationships based on competition and those based on directive roles and responsibilities exist. All the relationships contribute to the transitions to the circular economy, albeit in varying ways.
Acknowledgements
The authors are grateful to the anonymous reviewers for their valuable comments regarding the previous versions of this chapter. The authors gratefully acknowledge the financial support from the Strategic Research Council at the Academy of Finland (decision numbers 320194 and 320206).
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