Assignment Sample on ASB-4413 International Strategic Management
STRATEGIES OF TRANSFORMATION FROM LINEAR ECONOMY TO CIRCULAR ECONOMY
Introduction:
The economy is made up by two processes, one process is that linear process and another process is that circular process. The linear process is based on the principle such as take, made and dispose. Raw materials are by linear process to make goods and after that finished goods are made up by manufacturer and finally, all goods are distributed to consumers. So, by linear process products are manufactured and used by consumers and after consuming waste is rejected. Linear economy is the unsustainable process. There are two types of unsustainable process. One process is reduced raw materials to manufacture goods and another process is that increase environment pollution. There is no recycling process of linear economy. So, gradually raw materials are reduced and increase pollution. Researcher need to rethink about the recycling process and linear economy is transformed to circular economy (Virlanuta et al., 2020).
Circular economy is based on the process of production and consumption. The production and consumption process are included with share, lease, reuse, repaire, refurbish and recycle of existing products for long time. The aim of the circular economy is that recover from the global challenges like change of climate, loss of biodiversity, waste and pollution. For the linear economy, the world faced a different challenge such as the climate of the world is changed and loss of biodiversity. Gradually, environment pollution is increased as well as waste products also increased by the linear process. To tackle the climate, industrialist should rethink about the process of recycling. So, the circular process helps to reserve the climate of world and preserve biodiversity. Linear economy increases environment pollution and it has a negative impact on human livelihood. The basic responsibility of industrialist to rethink about the process of manufacture of goods as well as the materials used for goods should be reusable. There are three process to free the environment from pollution and preserve the biodiversity. These processes are waste and pollution design, products and materials should be reusable and natural system is regenerated. For example, recycling plastic and form plastic into pellets finally, these pellets are used for making new plastic materials (Subramanian et al., 2021).
Manufacturer uses raw materials to produce goods and distribute these goods for use. After the use of goods, waste products are landfilled that increase pollution. As a result, greenhouse effect is increases and it effects on biodiversity. From the food products to the electronics goods innovative technology should be used. The manufacturing process of electronics goods should have repair system and the packaging system should be recycled. Manufacturer should be aware about the environment and to keep the balance of biodiversity transformation is required from linear economy to the circular economy. Transformation of linear economy to circular economy keep the balance of biodiversity. The aim of the study is to analysis the strategy of transformation from linear economy to circular economy and the impact of the economy on environment, biodiversity and ecosystem.
Main body:
The economy system is divided into two different system one is linear economy and other is circular economy. Manufacturer produces products and distributes to consumers. There is an impact of economy on environment, ecosystem, and biodiversity. Generally, raw materials are required for production of product then after use the product the environment is polluted by waste material. The basic responsibility of manufacturer is to design the production process to reduce the pollution and keep balance of biodiversity and ecosystem.
Linear economy and effect on environment:
The principle of Linear economy is taking, make and waste. Natural resources are used as raw materials and produce goods for consumers. As a result, there are a chance to finish the natural resource and it impacts on the production. After use of products waste materials are filled on the land. So, the environment polluted by waste materials. In some of cases, one time use goods are produced and waste materials are filled the land. For example, packaging is linear economy. Package is used for the production of materials and after use of product thrown the waste product that increases environment pollution. Capitalism linear economy is based on that worker power is identified as take, and by worker create marketable products that is identified as make and after production of the product distribute to consumers, it marked as waste. By the process of linear economy, waste materials are increased and environment pollution also increased. Increasing pollution effects on the ecosystem and increase greenhouse gas that effects on the biodiversity. As a result, existence of animal fall into severe difficulty. For the production of materials rethink and redesign is essential to reduce carbon emission and reduce the greenhouse gas production. Linear economy has a negative impact on lifecycle. Liner economy is Transform to circular economy to keep the balance of environment (Korhonen et al., 2018).
Circular economy and effect on environment:
Circular economy is based on production and consumption. The model of production and consumption are included with share, lease, reuse, repaire, refurbish and recycle of exist products and produce materials for long time. Manufacturer should design the recycling of waste materials, use the products and materials for reuse, and natural system should be regenerated. By the process of circular economy materials are recycled and reuse. Circular economy helps to produce biodegradable waste. If the materials are non-biodegradable then waste materials are reusing, remanufacturing and finally recycling. The aim of the circular economy is that save and enhance the natural capital to control the stocks of natural resources that keep balance of renewable resources flows (Sariatli, 2017).
Circular economy has two types of cycles one is technical cycle and another is biological cycle. By the biological cycle, plants take food from soil and animal take food from plant, human takes animal for food after death of human it becomes composite into the soil again soil is used for food of plant. The process is called biological cycle. Another cycle is that technical cycle, the technical cycle uses to recover and restore of components by the process of reuse, repair, remanufacture or recycling. By technical and biological cycle optimize resources and circulate products, component, and materials. There are different environment benefits of circular economy. Through the process reduce the greenhouse gas production and reduce the emission of carbon dioxide (Kapsalis et al., 2019).
Environmental benefits through circular economy:
There are some environmental benefits of circular economy. Manufacturer should rethink about the circular economy and apply the process to produce different types of products. Circular economy system has a positive impact on environment. The process reduces greenhouse gas emission and reduce carbon emission.
Fewer greenhouse gas emission is the environmental benefit of circular economy:
Reduction of greenhouse gas emission keep balance of ecosystem. By the process raw material is used and optimize the agriculture production. The process helps to decrease negativity that is brought by linear economy (Didenko et al., 2018). Circular economy has positive impact on environment such as:
- Renewable energy reduces carbon emission than the use of fossil fuel.
- Reusing and dematerialized is used circular economy. Very few materials are used for the production of good quality of product.
- The process is energy efficient and non-toxic materials. As well as by the process, non-toxic and recycling process is selected to produce good quality of products.
Healthy soil is the environmental benefit of circular economy:
Farming process is the important to increase nutrients into soil. By the anaerobic process or composite nutrition of soil is increased. Healthy soil is essential to supply nutrient to plant. The process keeps to balance the ecosystem. Waste materials return into soil by the process of biological cycle. More use of fertilizer into soil destroy the biodiversity. 80% reduction of artificial biofertilizer keep the balance of soil and it supply nutrients to plant (Shaji et al., 2021).
Economic benefit of circular economy:
Economic growth is increased by resource consumption. Gross domestic production is increased by the use of cheaper material for production. Manufacturer use low price material for production that increases the economic growth of industry.
To increase the economic growth, circular economy has a significant role. By the process, raw materials are saved and reuse natural resources for production. Producers should focus on recycling process, materials production and avoid to landfill. By circular cycle, reduce the environment pollution and keep balance of ecosystem.
Employment growth is the benefit of circular economy:
Circular economy model is developed by the new regulation such as taxation and organization of labour market. By the process of circular economy employment growth is developed. New business establish and innovation system increase the rate of employment. Innovation is essential for the process of reuse, and recycling. For technical cycle, repairing is the essential part and skilled employee is required for repairing of the products and new skilled employee is needed for the service. So, circular economy increases the employment growth. For the transformation of products and design of the production skilled employees are needed and the opportunity of employment is created. So, circular economy system increases the employment growth (Hysa et al., 2020).
Way to transfer from linear economy to circular economy:
To keep the balance of biodiversity and ecosystem transformation to circular economy from linear economy is essential. There are three way of transfer to circular economy from linear economy. According to Atiku, (2020) these processes are:
Consume less:
By the linear process natural energy is used for production. As a result, reduce the resources of natural energy. To transfer of linear economy les consumption of natural energy is required. Less consumption of natural energy preserves the energy. According to the less consumption of natural resources keep the balance of ecosystem and biodiversity. Less consumption of natural resources preserve the resources and it can be used for further production. So, manufacturer and consumers should be aware about less consumption of natural resources and less consumption of resources transfer the linear economy to circular economy.
Consume better:
All of producers and consumers should be aware about better consume of resources. For the agriculture production artificial fertilizer should not be used as it reduce the quality of soil and reduce nutrients for plant. Consumers awareness is essential for better consume of products. Manufacturer should be aware about the materials are used for production. Better quality of material helps to keep balance of ecosystem. As well as for the technical cycle, best quality of product should be used as the products have repairing system. The repairing system reduce environment pollution. So, better consumption increase helps to transform linear cycle to circular cycle.
Systematic change:
Systematic change is required to transfer the linear economy to circular economy. Producers should design the production process to reduce the environment pollution. There is different way to recycle waste product and reuse the waste materials. For example, recycling of plastic and form it into pellets and pellets are used for the further production of plastic materials. For technical process, electronic goods should have the repairing system. By the repairing system, electronics goods are not wastage and again it is used. By the innovative technology, advanced technology needs to use for production of quality product. Innovative technology reduces carbon emission as well as reduce the production of greenhouse gas. So, the systematic change is required to transfer the linear economy to circular economy (Masi et al., 2017).
Consumers and producers should be aware about the consumption, and process to use of products to reduce the environment pollution. As well as reduce the greenhouse gas production.so, consumers and producers should take care about the use and production of products.
Barriers of circular economic model:
Circular economy has the different barrier. There are different stages of barriers such as:
Social and environmental externalities: Privileging of financial market is the barrier of circular economy.
Raw materials price:
Price of raw materials has a significant role to increase the circulatory economy. For the cheap production of material low cost materials are used. For the production of good quality of product, high cost of materials needs to be used. Production of quality products are required to compete in the competitive market. For the production of quality product better quality of raw material is needed that helps to produce best quality product and the price of raw materials are high. So, the price of raw material is the barrier of circular economy model.
Investment:
Investment is another barrier of circulatory economy. For the better-quality production innovation is required and a large investment is required to research and development for the production of quality product. So, investor is essential to invest in the research and development for the quality production. manufacturer should take help from investor and other partners for the production of quality product. The cost of advanced technology is high and equipment with advanced technology price is high. So, investment is the barrier for circular economy model (Bianchini et al., 2019).
Demand of product:
The price of high-quality product is high. By the advanced technology, producer make the quality product but the demand of the product may be low for high price. So, market analysis is essential before the production of high-quality product as well as research of consumers behaviour is required to produce the product. According to the demand of consumers, the manufacturer should produce new products it decreases the loss of producers. So, demand of product is the barrier of circulatory economy model.
Skilled employee:
By the process of circulatory economy model, products are produced with new advanced technology. So, skill and knowledge are required for the production of new product. So, the management of the industry should be aware about the skill and knowledge of employee. If skilled person is employed by the industry it will be easy to produce new products with advanced technology. In the research and development sector, skilled person can help to produce new products with advanced technology. So, another barrier of circular economy model is that skilled employee.
Workplace and work time:
Innovation is the essential factor to develop the economy system. So, the management of industry should be aware about the workplace and work environment. To maintain the good workplace and work environment the management of industry should be careful about rules and regulation of workplace. A good environment and work culture help to develop the work quality and produce the quality product. As well as, the management should make schedule of work time for employee. Employees’ satisfaction is essential to develop the quality of work. So, the management should be care about employee safety and provides facilities to employee for good work. So, good management is another barrier of transformation to circular economy from linear economy.
Economy:
Economy system of industry is barrier of transformation to circular economy system from linear economy system. Costing price of the linear economy is less than circular economy system. So, most of the entrepreneurs are not ready to move the production process to circular economy system from linear economy system. Development of economy is essential for industry for transformation of linear economy. So, economy system has a significant role for transformation of linear economy to circular economy (Guldmann and Huulgaard, 2020).
Business model:
Business model has a significant role of transformation to circular economy from linear economy. The management of industry should design proper business model for transformation of linear economy to circular economy. For design the business model, skilled and experienced employee is needed. The management of the industry should be aware about the project design and make project plan for transformation of linear economy to circular economy. So, the management of industry has major role to create the business model and proper business model enhance to transformation of linear economy system to circular economy system.
To overcome challenges manufacturer should be aware about all risk and analysis these risks. Through communication with other employees the risk management should act proper action. As, linear economy system ha negative impact on the environment so, producers should design the proper business model based on recycle, reuse, and repair. So, rethink is essential for industrialist to make a healthy environment and keep balance of ecosystem and biodiversity. The circular economy has positive impact on environment and the environment free from pollution (Ranta et al., 2018).
Conclusion:
From the study, it is learned that there are two types of economy system one is linear economy and another is circular economy. Linear economy has effects on the environment and the principle of linear economy is take, make and waste. By the process natural resources are used for production and after use of the product it goes for waste. By the waste product landfill is occurred and increase the environment pollution. By linear economy system destroy the ecosystem and biodiversity. As a result, increase the emission of carbon dioxide as well as increase greenhouse gas production. So, linear economy system has a negative impact on the world. Besides the linear economy, another economy is that circular economy. The principal of circular economy is production and consumption model and the model are included with share, lease, reuse, repair, refurbish and recycle of exist products. Circular economy system designs the model of business and rethink about process of production. By circular economy model, natural resources are used for the production of product and after finishing the product distribute among distributors and finally, it goes for recycling. There are two types of cycle, one is biological cycle and another is technological cycle. Biological cycle is based on anaerobic or composite process and technological process is based on repairing process. The process keeps the environment free from pollution and keep the balance of biodiversity and ecosystem. So, circular economy system has a positive impact on the environment. The management of industry should rethink and design the business model to transformation to circular economy from linear economy and to keep the balance of ecosystem and biodiversity as well as keep the environment free from pollution.
Reference:
Atiku, S.O., 2020. Knowledge management for the circular economy. Handbook of Research on Entrepreneurship Development and Opportunities in Circular Economy, pp.520-537.
Bianchini, A., Rossi, J. and Pellegrini, M., 2019. Overcoming the main barriers of circular economy implementation through a new visualization tool for circular business models. Sustainability, 11(23), p.6614.
Didenko, N.I., Klochkov, Y.S. and Skripnuk, D.F., 2018. Ecological criteria for comparing linear and circular economies. Resources, 7(3), p.48.
Guldmann, E. and Huulgaard, R.D., 2020. Barriers to circular business model innovation: A multiple-case study. Journal of Cleaner Production, 243, p.118160.
Hysa, E., Kruja, A., Rehman, N.U. and Laurenti, R., 2020. Circular economy innovation and environmental sustainability impact on economic growth: An integrated model for sustainable development. Sustainability, 12(12), p.4831.
Kapsalis, V.C., Kyriakopoulos, G.L. and Aravossis, K.G., 2019. Investigation of ecosystem services and circular economy interactions under an inter-organizational framework. Energies, 12(9), p.1734.
Korhonen, J., Honkasalo, A. and Seppälä, J., 2018. Circular economy: the concept and its limitations. Ecological economics, 143, pp.37-46.
Masi, D., Day, S. and Godsell, J., 2017. Supply chain configurations in the circular economy: A systematic literature review. Sustainability, 9(9), p.1602.
Ranta, V., Aarikka-Stenroos, L., Ritala, P. and Mäkinen, S.J., 2018. Exploring institutional drivers and barriers of the circular economy: A cross-regional comparison of China, the US, and Europe. Resources, Conservation and Recycling, 135, pp.70-82.
Sariatli, F., 2017. Linear economy versus circular economy: A comparative and analyzer study for optimization of economy for sustainability. Visegrad Journal on Bioeconomy and Sustainable Development, 6(1), pp.31-34.
Shaji, H., Chandran, V. and Mathew, L., 2021. Organic fertilizers as a route to controlled release of nutrients. In Controlled Release Fertilizers for Sustainable Agriculture (pp. 231-245). Academic Press.
Subramanian, K., Sarkar, M.K., Wang, H., Qin, Z.H., Chopra, S.S., Jin, M., Kumar, V., Chen, C., Tsang, C.W. and Lin, C.S.K., 2021. An overview of cotton and polyester, and their blended waste textile valorisation to value-added products: A circular economy approach–research trends, opportunities and challenges. Critical Reviews in Environmental Science and Technology, pp.1-22.
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