Circular Economy Practices in Manufacturing SMEs : Exploration of Stakeholder Pressure, Managerial Perception, and the Mediating Role of Circular Economy Orientation

Abstract

This study delves into the dynamics of Circular Economy (CE) practices in Small and Medium-sized Enterprises (SMEs), acknowledging their essential contribution to promoting sustainability. As we explore the various influences on SMEs' adoption of CE, we closely examine the distinct impacts of internal and external stakeholder pressure. Additionally, we highlight the role of positive managerial perceptions and introduce a fresh perspective by framing CE orientation as a mediating force. Employing a survey methodology, our data collection spanned three phases, resulting in 196 responses from the Estonian SMEs. The results challenge the assumptions of uniform stakeholder pressures, unveiling nuanced effects on CE practices. Significantly, a heightened CE orientation emerges as a driving factor in enhancing organisational responsiveness to external stakeholder pressure. This study advances our understanding of the intricate relationships between stakeholder dynamics, managerial perceptions, and CE practices, providing valuable insights essential for SMEs to navigate the path towards sustainable practices. This study presents both theoretical and practical contributions and suggests avenues for future research to further explore the multifaceted nature of the relationships uncovered in this study.