MANAGING THE TRANSITION TO CIRCULAR ECONOMY IN SMES

Abstract

This paper examines the integration of circular economy principles into organizational management strategies and their role in enhancing organizational resilience in the context of increasing sustainability challenges. The study builds upon the theoretical foundations of circular economy, which emphasize resource efficiency, waste minimization, and closed-loop systems (Geissdoerfer et al., 2017; Kirchherr et al., 2017), as well as sustainability-oriented management, which integrates environmental and social considerations into strategic decision-making processes (Schaltegger & Wagner, 2006). Recent empirical evidence further supports the positive relationship between circular economy practices and organizational performance, highlighting their strategic relevance for firms (Pan et al., 2024). A pilot empirical study, based on survey data collected in 2025, was conducted among a purposive sample of 68 managers and employees from small and medium-sized manufacturing enterprises (SMEs), testing the determinants of circular practice adoption across three key dimensions: the influence of awareness on implementation readiness, the role of existing sustainability practices in fostering organizational openness, and the effect of structural barriers, including financial constraints, lack of knowledge, and insufficient institutional support, on the transition process. The findings show that awareness, organizational readiness, and proactive management drive circular economy adoption, while structural constraints hinder implementation. The study advances understanding of how sustainability-oriented management supports the transition to circular models and offers implications for researchers and practitioners.