Stuck in the middle of the value chain The investment company’s role in mitigating its subsidiaries’ circular challenges
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Examensarbete för masterexamen
Master's Thesis
Master's Thesis
Modellbyggare
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Sammanfattning
Sustainability is receiving increasing attention, where the latest trend concerns circular
economies and business models. Circular strategies are often dependent on the R-strategies,
which are methods to become more circular e.g., repair, remanufacture, and recycle. The
R-strategies are themself dependent on ownership of the product, and thus more applicable for
companies positioned in the end and beginning of the value chain. Hence, companies
positioned in the middle of the value chain (which we will call mid-chain companies) lack
theoretical strategies and guidance in their circular transition. A parent company can possess
different levels of ownership competence, where a higher one can result in more value
creation for its subsidiaries. However, it does not include the aspects of neither circularity nor
sustainability. Hence, we have investigated what circular challenges these mid-chain
subsidiaries experience as well as what role a parent company can take to mitigate these.
We investigated nine subsidiaries which are active in the middle of the value chain and in
adjacent markets to the steel industry. The challenges the subsidiaries experience are
connected to their position in the value chain and them being a part of a corporate group.
Moreover, as there is a lack of academic theories of how to proceed the circular transition for
these companies, many experience an insight gap and high uncertainty. In addition, the
investigated subsidiaries are SMEs, located in rural areas, and are thus deprioritized by
regulating bodies and influential actors. The deprioritization results in a lack of required
infrastructure, needed for the circular transition.
Consequently, to extend the ownership competence, to also include circularity, we recommend
a parent company to possess four roles: Network Mobilizer, Institutional Builder, Information
Hub, and Active Influencer. This is a long-term recommendation which is vital to enable
long-term competitiveness. However, to even exist in the future, it is also important to focus
on short-term actions such as marketing and knowledge exchange.
Beskrivning
Ämne/nyckelord
subsidiaries, parent company, circular business models, sustainability, middle of the value chain