This study explores the relationship between Circular Economy (CE) principles and organizational resilience in the hospitality industry. CE principles promote the efficient use of resources and the compliance with increasing environmental and normative pressures. Organizations adhering to CE principles may have a better control over resources, which is related to organizational resilience, defined as the ability to recover from adversities. To have an efficient and effective circular loop of resources, the interorganizational relationships (IORs) that organizations establish to exchange knowledge and resources are relevant in the sustainability of the organization in the long term. However, there is still a gap in the analysis in the effect of IORs over CE principles and organizational resilience. The research examines how CE principles influence organizational resilience and how this relationship is affected by the IORs. Using a quantitative empirical approach, data were collected from 73 Italian hotels via surveys. Preliminary results suggest that reducing resource consumption through CE practices positively impacts resilience. However, these results also suggest a weaker effects of IORs over the CE - organizational resilience relationship, potentially due to contrasting effects of the risks and the benefits of IORs over organizational resilience. The study aims at contributing to both circular economy and organizational resilience literature by unpacking the effect of different CE principles, and recognizing the diversity of nature and scope of the IORs.

As climate change and densification call for action, nature-based solutions (NBS) can contribute to sustainable development by integrating nature in cities. However, insights into underlying business models that drive the uptake of urban NBS remain nascent. To fill this gap, we propose business models for sustainability (BMfS) in the urban NBS context. We review the BMfS and NBS literature with a focus on joint value creation with stakeholders. Next, we conducted a multi-case study analysis of 54 urban NBS. Our results suggest eight distinct BMfS for urban NBS—ranging from green densification to local stewardship models— within three overarching value propositions: economic, social, and cultural. Based on our findings, we propose to give up the idea that stakeholder-driven BMfS need to be centered around a focal firm, suggesting a more open-minded perspective on collaborative organizational arrangements through which BMfS can facilitate sustainable development, such as in the context of urban NBS.

36th IABS Annual Conference

Redesigning business for the common good

Maastricht, The Netherlands

April 3 to 6, 2025

Rethinking business growth: Enabling growth-independent businesses for sustainable provisioning

1. Topic

The global economy’s relentless pursuit of growth was until recently considered a cornerstone for the prosperity of our societies. However, this growth-centric model is increasingly condemned for its social and ecological unsustainability. Ecological economists and sustainability scholars argue that continuous growth—fuelled by the expansion of production, consumption, and resource extraction—conflicts with the planet’s ecological limits and with societal wellbeing (Hickel & Kallis, 2020; Jackson, 2009; Kallis et al., 2012).

While much of the critique of growth has focused on macroeconomic structures, the same concerns could apply to growth at the micro level, particularly within businesses (Gebauer, 2018; Liesen et al., 2015; Nesterova, 2021). Just as continuous economic growth strains ecological systems, the pursuit of relentless growth by individual businesses can contribute to environmental degradation and unsustainable resource use (Bérard et al., 2015; Edwards, 2021; Weinberg, 1998). At the micro scale, firms are driven by pressures to expand (Gabriel et al., 2019; Janssen, 2011; Kiviluoto, 2013; Nobre et al., 2020; Reijonen & Komppula, 2007, 2007)—whether through increasing market share, production volume, or profit margins—which mirror the broader economic obsession with GDP growth. This focus on business growth can result in over-extraction of resources, heightened waste generation, and a short-term focus on financial returns at the expense of long-term ecological and social well-being.

Therefore, questioning macro growth naturally extends to the micro level, raising the question of whether businesses can thrive without this continuous expansion. In that sense, post-growth and degrowth theories call for a fundamental rethinking of how businesses are structured and operate (Buch-Hansen et al., 2024; Hinton, 2021; Robra & Nesterova, 2023). These theories examines how organizations can operate successfully without relying on continuous macro-economic expansion and advocate for the reimagining of social and economic relationships within planetary boundaries. They propose business models based on key principles such as frugal abundance, conviviality, care, and open relocalization (Banerjee et al., 2021).

Additionally, this shift from macroeconomic to business-level practices raises a critical question: Can businesses contribute to sustainable provisioning without relying on micro-growth? Answering this requires exploring alternative strategies, such as the active support to sufficiency in consumption, and examining the conditions that allow firms to decouple sustainable provisioning from the need for expansion. Indeed, despite a growing interest in post-growth organizations, the literature on how sustainable businesses can effectively emancipate form growth dependencies is underdeveloped (Cyron & Zoellick, 2018). While there are promising examples of growth-independent practices in niche sectors—such as small cooperatives, social enterprises, and circular economy initiatives—mainstream business theory and practice continue to be predominantly aligned with growth imperatives (Davidsson et al., 2009; Penrose, 2009). This gap highlights the need for further exploration into how businesses can detach themselves from growth imperatives and dependencies[1] to adopt more sustainable practices.

Following these observations, the goal of this paper is to understand how businesses can become growth-independent—that is, remaining viable while moderating their size in terms of traditional growth metrics (e.g., market share, production volume, or profit margins), in order to contribute to sustainable provisioning (providing goods and services that meet societal needs without squandering natural resources). To do so, the study explores the existing literature on growth dependencies (e.g., Janischewski et al., 2024) and their refinement to the business context (e.g., de Souza & Seifert, 2018; Gherhes et al., 2016), on sustainable provisioning (e.g., Bocken et al., 2014, 2019; Nesterova, 2020) and more particularly, on sufficiency-oriented businesses (Gossen & Niessen, 2024; Niessen & Bocken, 2021). In doing so, this paper seeks to fill an important research gap by proposing a theoretical framework for understanding the possibility for business to become growth independent for sustainability motives.

2. Research questions

The research questions guiding this paper address the core issue of whether and how businesses can operate outside the logic of continuous growth while aiming at sustainability. Specifically, the study is structured around the following research questions:

RQ1: What are the key barriers in the current economic system that prevent businesses from disconnecting their viability from their growth in order to adopt sustainable practices?

This question seeks to identify the structural, financial, and normative impediments that keep businesses reliant on growth although such connection endangers the sustainability of socioecological systems. It focuses on growth dependencies, shareholder and stakeholders’ expectations, market structure and regulatory frameworks that create dependencies on expansion and profit maximization.

RQ2: Under what conditions can businesses operate independently of their growth in order to contribute to sustainable provisioning?

This second question is concerned with the internal and external conditions (such as business and financial models, market contexts, and regulatory frameworks) that make growth-independent business models viable. It asks whether certain sectors, business structures, or policy environments are more conducive to growth-independent practices.

By answering these questions, the study aims to shed light on the under-explored area of growth-independent business models, providing insights into how businesses might transition away from growth dependence in support of sustainability.

3. Methods

Due to the exploratory nature of this research, the study will consist of a literature review to support a theoretical analysis that identifies the conditions under which a business can thrive without expanding. The research is designed in two key steps:

3.1 Literature review

The first step in the methodology involves a review of existing literature from two fields relevant to the research topic.

The first body of literature addresses growth imperatives and dependencies, challenging the economic and social necessity of growth. Scholars (Antonio, 2013; Arnsperger et al., 2021; Binswanger, 2013; Jackson & Victor, 2015; Janischewski et al., 2024; Méda, 2013; Richters & Siemoneit, 2019; Strunz et al., 2017) in this area propose theoretical foundations for understanding both growth-dependent and growth-independent models. Part of these works criticize the current system’s reliance on continuous growth, offering alternative visions for a society that operates within the planet’s ecological boundaries. Within this broader debate, we will focus on growth dependencies that are of special relevance to business (Burlingham, 2016; Cyron & Zoellick, 2018; de Souza & Seifert, 2018; Gherhes et al., 2016; Janssen, 2011; Nesterova, 2021). This involves examining the individual, organizational, market-level, institutional, and ideological pressures that drive businesses to pursue continuous expansion. Works from business studies, financial economics, and transition studies highlight the role of stakeholders’ expectations, capital markets, and policy frameworks in reinforcing the current growth dependencies paradigm, thus making it difficult for businesses to transition to more sustainable models.

The second body of literature centres on sustainable provisioning and business models that preserve the environment while enhancing human quality of life—i.e., sustainable business models. Bocken et al. (2014) present a typology of these sustainable business models, with the “encouraging sufficiency” archetype being particularly relevant to this research. Indeed, this archetype promotes solutions that reduce both consumption and production. More specifically, sufficiency-oriented businesses (Beyeler & Jaeger-Erben, 2022; Bocken et al., 2014; Bocken & Short, 2016) are defined as moderating consumption to achieve long-term sustainability. These strategies involve rethinking product design, services, and business models to support sustainable provisioning rather than increased resource use. By promoting sufficiency, such businesses may face reduced sales, effectively moderating their production and growth (Bocken et al., 2019). Such practices represent thus a form of growth moderation, even if not explicitly framed as such by the businesses themselves.

Together, these two fields form the basis for exploring the viability of growth-independent businesses and establishing a theoretical framework conceptualizing the conditions that enable them to thrive.

3.2 Theoretical framework

The second stage of the methodology involves synthesizing the insights gathered from the literature review to develop a multidimensional and interdisciplinary theoretical framework for understanding the viability of businesses becoming growth-independent for sustainability motives. The synthesis aims to identify two critical elements: first, the key factors that make it challenging for businesses to limit their growth, such as market pressures, stakeholder’s expectations, regulatory structures and normative constraints; and second, the conditions that would enable businesses to moderate their growth in order to become more sustainable.

4. Expected results (as the research is a work-in-progress)

We expect this study to provide a detailed theoretical understanding of the barriers and enablers that impact the feasibility and viability of growth-independent sustainability-oriented businesses. These findings could be categorized into two broad themes: barriers to, and enablers for growth moderation, in a sustainable perspective.

4.1 Expected barriers to sustainability-oriented business growth moderation

The first set of results we expect to identify are the key individual, organizational, structural, and institutional barriers that hinder businesses from operating without growth despite their sustainability motivations. One of the most significant obstacles is likely to be financial imperatives, as firms are driven by shareholders’ expectations for continuous returns, which typically require growth to sustain profitability. This pressure is exacerbated by capital markets that prioritize short-term financial gains over long-term sustainability, creating a cycle that forces businesses to focus on expansion.

Market competition is another expected strong barrier to the success of growth-independent businesses. Firms that fail to expand risk losing market share to competitors who can exploit economies of scale, reinforcing a dependency on growth. This dynamic pushes businesses into a survival mode where growth becomes essential to remaining competitive.

The regulatory structure may also present a major obstacle. We assume to find that current regulatory frameworks tend to favour growth-oriented businesses, offering incentives, tax breaks, and subsidies tied to metrics such as revenue growth or job creation. These policies create a structural disadvantage for companies adopting growth-independent models, as they lack institutional support to prioritize sustainability over expansion.

Lastly, we assume that cultural perceptions of growth act as a significant barrier. In capitalist societies, growth is mostly synonymous with success and progress, while stagnation is often equated with failure. This mindset is pervasive among consumers, entrepreneurs, investors, and researchers, making it difficult for businesses to effectively communicate the value of sustainability-oriented strategies when they require growth moderation. The deep-seated association of growth with innovation and dynamism presents a cultural challenge that growth-independent businesses must overcome to gain legitimacy.

4.2 Expected enablers for sustainability-oriented business growth moderation

We expect the second set of results to focus on identifying the internal and external conditions that enable businesses to moderate their growth for operating more sustainably. In that sense, these enablers provide solutions to the previously mentioned barriers, grounded in the sustainability-oriented and, more specifically, sufficiency-driven business practices highlighted in the literature review. We believe that one key enabler could be the development of alternative financial models, such as impact investment, more patient capital, or cooperative ownership structures. These models have been found to allow businesses to prioritize long-term sustainability over short-term growth by aligning financial incentives with sustainability goals (Bocken et al., 2014; Shome et al., 2023).

Additionally, it seems to us that collaborative and cooperative business models are likely to emerge as critical for growth-independent sustainability-oriented businesses. Instead of competing, businesses can create networks that share resources and knowledge, enabling them to collectively achieve sustainability improvements without individual growth pressures (Hermelingmeier & von Wirth, 2021; Suchek & Franco, 2024).

Supportive policies and regulatory frameworks will likely prove essential as well (e.g., Bradley, 2021; Roman et al., 2023). By rewarding environmental and social contributions—through mechanisms such as sustainability certifications or legal business statuses like the "société à mission" in France—these policies could offer growth-independent businesses more stability and incentives to pursue sustainability practices. As such, policies that incentivize sustainable practices and penalize overconsumption could further reduce the reliance on growth.

Finally, we expect the results to underscore the importance of cultural shifts in redefining business success. Moving beyond the growth-centric narrative (Aagaard & Christensen, 2024; Brown & Vergragt, 2017; Dey & Mason, 2018), businesses that focus on sustainability, social well-being, and ecological balance could be viewed as successful without the need for expansion. This cultural change would require rethinking success metrics, valuing contributions to environmental and social goals over financial growth and fostering public awareness that rewards sustainability-oriented practices.

Overall, we hope this study will provide a theoretical framework for understanding the possibilities for businesses to become growth-independent for sustainability purposes. While our research proposes mainly theoretical findings, we recommend future research to explore empirical evidence across various sectors and regions to confirm how businesses can successfully navigate the challenges raised by growth dependencies in the pursue of more sustainable provisioning. Additionally, examining the roles of policymakers and financial institutions in fostering environments conducive to growth-independent models will be crucial for supporting this transition toward sustainable business practices.

5. Bibliography

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Bocken, N., & Short, S. W. (2016). Towards a sufficiency-driven business model: Experiences and opportunities. Environmental Innovation and Societal Transitions, 18, 41–61.

Bocken, N., Short, S. W., Rana, P., & Evans, S. (2014). A literature and practice review to develop sustainable business model archetypes. Journal of Cleaner Production, 65, 42–56.

Bradley, P. (2021). An institutional economics framework to explore sustainable production and consumption. Sustainable Production and Consumption, 27, 1317–1339.

Brown, H. S., & Vergragt, P. J. (2017). From growth to sustainability: cultural transition beyond consumerist lifestyles. In P. A. Victor & B. Dolter, Handbook on Growth and Sustainability (pp. 420–438). Edward Elgar Publishing Limited.

Buch-Hansen, H., Koch, M., & Nesterova, I. (2024). Business in degrowth transformations. In Deep transformations: A theory of degrowth (pp. 91–105). Manchester University Press.

Burlingham, B. (2016). Small Giants: Companies that choose to be great instead of big, 10th-anniversary edition. Penguin.

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de Souza, R. R., & Seifert, R. E. (2018). Understanding the alternative of not growing for small mature businesses. Management Revue, 29(4), 333–348.

Dey, P., & Mason, C. (2018). Overcoming constraints of collective imagination: An inquiry into activist entrepreneuring, disruptive truth-telling and the creation of ‘possible worlds.’ Journal of Business Venturing, 33(1), 84–99.

Edwards, M. G. (2021). The growth paradox, sustainable development, and business strategy. Business Strategy and the Environment, 30(7), 3079–3094.

Gabriel, C.-A., Nazar, S., Zhu, D., & Kirkwood, J. (2019). Performance beyond economic growth: Alternatives from growth-averse enterprises in the Global South. Alternatives, 44(2–4), 119–137.

Gebauer, J. (2018). Towards growth-independent and post-growth-oriented entrepreneurship in the SME sector. Management Revue, 29(3), 230–256.

Gherhes, C., Williams, N., Vorley, T., & Vasconcelos, A. C. (2016). Distinguishing micro-businesses from SMEs: a systematic review of growth constraints. Journal of Small Business and Enterprise Development, 23(4), 939–963.

Gossen, M., & Niessen, L. (2024). Sufficiency in business: The transformative potential of business for sustainability (1st ed). transcript Verlag.

Hermelingmeier, V., & von Wirth, T. (2021). The nexus of business sustainability and organizational learning: A systematic literature review to identify key learning principles for business transformation. Business Strategy and the Environment, 30(4), 1839–1851.

Hickel, J., & Kallis, G. (2020). Is green growth possible? New Political Economy, 25(4), 469–486.

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Janischewski, A., Bohnenberger, K., Kranke, M., Vogel, T., Driouich, R., Froese, T., Gerold, S., Kaufmann, R., Keyßer, L., Niethammer, J., Olk, C., Schmelzer, M., Yürük, A., & Lange, S. (2024). It depends: Varieties of defining growth dependence (arXiv:2409.12109). arXiv.

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[1] Janischewski et al. (2024) distinguish between “growth imperatives” and “growth dependencies”: growth imperatives imply that growth is essential to prevent severe problems or critical consequences within a system. In contrast, growth dependencies refer to the reliance on growth to sustain certain system standards, even if the absence of growth does not immediately lead to the system collapse. In the research, we adopt the term “growth dependencies” which we recognize as being broader than “growth imperatives”.

Widely applied, traditional organization-centric business models concentrate on creating economic value for a certain company and its shareholders (Jonker and Faber, 2019). However, to integrate of environmental and social perspectives - in addition to economic focus- and to create value both for companies and their stakeholders, firms need to collaborate with diverse stakeholders in their value creation processes (Freeman, 2010). A joint purpose based on shared values of a company and its stakeholders is needed for motivating these value creation processes (Breuer and Lüdeke-Freund, 2017; Freudenreich et al., 2020). Business models which contribute to ecological and social value creation, can create competitive advantages at the same time when facilitating the sustainable developments of markets and society (Baumgartner and Rauter, 20197; Freudenreich et al., 2020). However, it remains largely unstudied how these Business Models for Sustainability operate, and what are the activities and designs that enable their contribution to sustainable value creation (Lüdeke-Freund et al., 2024).

Collaborative business models aim for co-creating of value through diverse collaborative mechanisms and engagement of various types of actors, such as consumers, businesses, NGOs and local governments (Pedersen et al., 2021). Derks et al. (2022, p. 8) define Collaborative Sustainable Business Modeling as “an inter-organizational participatory design approach with the aim of creating multiple types of value for multiple actors, both regime and niche, that span the value network”. Overall, collaborative business models are featured by elements of inclusivity, sustainable value co-creation, cross-sectoral partnerships, multi-actor approaches, value networks and joint initiatives, and are thus seen as important ways to facilitate the sustainability transition (Bidmon and Knab, 2018; Aagaard et al., 2021; Tschiedel., et al, 2024). Still, knowledge on the impacts of collaborative business models on systemic level change is scarce. Derks et al. (2022) argue that transition studies rarely take a value network perspective whereas business model studies focus on organizations, neglecting the influence of value networks at the macro-level. Management studies when combined with transition research perspectives could illuminate the role of actors and their agency in transition processes (Köhler et al., 2019).

In Finland, as well as in many other countries with plentiful forest resources, forests and forest utilization are important to a range of societal groups. This means that forests are also the target of numerous goals and hopes from a variety of stakeholders, often leading to trade-offs and disagreements on acceptable ways of utilizing forests (Halla and Laine, 2022; Halonen et al. 2022; Näyhä and Wallius, 2024). Organization-centric business models have limited potential to exert a positive influence on social or environmental sustainability and mitigate challenges in forest utilization. Still, there remains a lack of knowledge on how and to what extent value is currently co-created in the forest-based sector, what is the role of sustainability in value co-creation processes and how collaborative business models could and should be promoted between companies and their stakeholders.

This study aims to explore the value co-creation and collaborative business models of various Finnish forest-based sector companies with their stakeholders to identify the shortcomings but also potentials for sustainability transitions. It examines the interplay of the companies with their key stakeholders and the potential influence of these interactions on achieving individual but also collective goals linked to societal sustainability transition. The key research questions are as follows: What kind of joint goals forest-based sector companies and forest-related stakeholders have in value creation? What is the role of sustainability in the goals of diverse actors? Are the sustainability goals shared between diverse forest-related actors? What kind of concrete collaborative practices and means for value co-creation exist to realize the shared goals? The key outcome of the study is a typology of collaborative business models based on the activities and functions of the involved societal actors. The study also takes a stand on how these collaborative activities and functions contribute to macro-level societal transition. Since the study concentrates on the Finnish forest-based sector, the study offers sector-specific information to academics, practitioners and stakeholders working in the field. Importantly, despite leaning on empirical findings in the forest-based sector, the created typology and the broader outcomes of the study can be applied in various contexts and fields.

The study is based on semi-structured interviews conducted in Finland in 2023. In its entirety the data consist of 72 interviews among different forest-based sector companies and forest related societal actors. The sample includes many different types of firms, meaning the firms varied in terms of business models, product portfolios, maturity, size and networks. Various stakeholders included groups such NGO’s, artists, interest organizations, researchers and authorities. The data is initially analyzed thematically (Brown and Clarke, 2006) whereas more nuanced analyzed is conducted by applying critical discourse analysis (Fairclough, 2010.)

At the moment our interview analysis is largely unfinished. The initial outcomes indicate that the forest-based sector companies and their stakeholders have a joint purpose to promote more just and sustainable society and ecosystems leaning on resilient utilization of forests. However, in practice there are various understandings on the shared goal and its realization.

Non-company forest-based actors indicate that they are most of all creating value for whole the society, underlining well-being of local communities, environment and the diverse societal actors that they are actively engaged with. Although the forest-based sector companies highlight pursuing sustainability goals leaning on triple bottom line principles and SDGs as well as bring up collaboration and dialogues for achieving these goals, they still focus on rather narrow, traditional groups as their value recipients and key stakeholders. For the firms, customers -to whom sustainable raw material, products and services are provided- and company shareholders are the key value recipients. Authorities and politicians both at local, national and European Union levels are the most important stakeholders. Also, raw material providers, suppliers and diverse companies and entrepreneurs in the value chain, research bodies and investors are mentioned as essential stakeholders for the forest-based sector firms. The companies also identify diverse challenges for collaborations, many of them being related to political factors. Lack of resources, competent partners and employees for creating collaborative networks are also seen as challenges. From the perspective of small and medium sized companies slowly changing regime and its dominant actors creates notable barriers as well as distrust and competition between business actors both in horizontal and vertical collaborations.

However, more in-depth analysis of the interview data revealed practical examples of value co-creation and collaborative business models between different forest-based sector actors. These practical cases (will) let us compose a more nuances understanding on the value co-creation mechanisms. It is noteworthy already (despite the unfinished analysis) that diverse non-company actors often highlight creation of common good and producing of shared value for diverse societal actors as their primary goal whereas for the forest-based sector companies, the bringing shared value is subsidiary for their core economic goals. Non-company actors seem to also bring up more diversified practices and models of collaboration in which they are engaged, either with the forest-based sector companies or with other non-company stakeholders.

Does value co-creation exist only in visions or does it take place in practice? Can collaborative sustainable business modeling be a solution to facilitate sustainability transition in the context of forest-based sector businesses? Yes, there exist practical examples on value co-creation between different actors. Collaborative business modelling could be solution -or at least part of it- but it would require stronger and more diverse involvement of actors from within and beyond the value networks so that complex challenges could be solved in collaboration by coordinating goals and related tasks, allocating resources and sharing the costs and benefits (see also Derks et al. 2022). Especially it would require stronger involvement from companies. These first insights offer room for discussion about the activities, functions, and desired intensity of collaborative business models for societal transition.

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