A single case study from Germany
This paper presents a specific form of a sustainable business model that applies a social circular economy approach while successfully doing business. Economic returns and ecological measures can be monitored accurately, but accounting for a company’s social impact is still challenging. Therefore, this paper presents a single case study about AfB: Europe's largest non-profit IT company that remanufactures IT devices and gives jobs to people with disabilities. The AfB creates a positive ecologic impact by saving natural resources, water, and CO2 emissions, and a positive social impact by creating jobs for people with disability, as around 45% of their employees have a mental or physical disability. Results from 15 interviews with managers and employees of the AfB plus secondary data show that the AfB undertakes many social activities but measuring the overall effects of these social activities needs improvement. So, this paper discusses barriers to social impact measurement in circular-social-hybrids in qualitative and quantitative data collection. Major barriers are the lack of capacity and resources for data collection and a lack of benchmarks, standards, and KPIs to calculate comparative numbers. In addition, social aspects are often intangible and sensitive, so it can be problematic to measure and report this sensitive information to the public. As a result, a framework is developed to assess the business models’ social and circular impact, which is of use for researchers and practitioners aiming to analyse a circular-social-hybrid.
business model, circular-social-hybrid, social impact measurement, circular economy, case study
Sustainability impact measurement is nowadays not only a niche topic but concerns all sectors of the economy, politics, and citizens (Centobelli et al., 2020). Especially companies are getting increasingly under pressure from their customers and politics to introduce more sustainable practices and products. The term sustainability is shaped by the Triple Bottom Line (TBL) concept of Elkington (1994), differentiating between the economic, environmental, and social dimensions of sustainability. Therefore, a truly sustainable impact is created when these three dimensions are tackled. The circular economy (CE) intends to improve the production’s environmental outcome by slowing, closing, and narrowing material and energy loops (Geissdoerfer et al., 2020). Hence, CE is a facilitator in achieving environmental sustainability. Simultaneously, business models (BMs) for the CE ensure to create, deliver and capture the economic value created by designing out waste in production processes, using materials for multiple cycles and renewable energy (Centobelli et al., 2020; Lewandowski, 2016; Lüdeke‐Freund, Gold & Bocken, 2019; Ranta, Aarikka-Stenroos & Mäkinen, 2018). According to the TBL approach, CE is considered sustainable if the social dimension is also tackled. Up to this point, CE research often neglects social implications (Merli, Preziosi & Acampora, 2018; Murray, Skene & Haynes, 2017; Padilla-Rivera, Russo-Garrido & Merveille, 2020). However, the needs of all members of society should be considered in researching and practicing the CE (Mies & Gold, 2021). This accounts in particular for disadvantaged groups such as people with disability. So, studying the impact of the CE on social well-being and balancing the three dimensions of sustainability is desired (Merli, Preziosi & Acampora, 2018; Padilla-Rivera, Russo-Garrido & Merveille, 2020). Further studies should define and specify how to measure social indicators and how CE practices can improve human well-being in society. Particularly, real-world case studies (Padilla-Rivera, Russo-Garrido & Merveille, 2020) and research of the TBL impact in CE enterprises is needed (Ferasso et al., 2020).
Therefore, this paper looks at a possible intersection of circular and social enterprises to present a hybrid enterprise that successfully includes circularity measures, social activities, and economic income. In more detail, it investigates the social impact of a successful non-profit circular-social-hybrid enterprise that simultaneously applies a circular and social BM. The aim is to understand how this circular-social-hybrid enterprise actively implements social activities by simultaneously solving resource and waste problems. The focus is on measuring the social impact and barriers to social impact measurement.
This paper aims to answer the following research question: What are the barriers to social impact measurement in a social circular economy business?
To address this research question, a single-case study with the AfB is conducted. This German enterprise was born circular-social, meaning the BM’s core was on circular and social activities from day one of its foundation. AfB was awarded, among others, the German Sustainability Award (2021), the Inclusion Award NRW (2020), and Europe's Social Enterprise 2020 (AfB, 2023a). The remaining sections of this paper include a theoretical background on relevant literature (Section 2), describe the applied methodology of a single case study (Section 3), presents the results of the study (Section 4), critically evaluates the results to be discussed by reflecting upon state-of-the-art literature identified in the literature overview (Section 5), and concludes with contributions to research and practice, limitations, and future research (Section 6).
From an economic perspective, the core elements of BMs are the economic value offered with their value proposition, creating, exchanging, delivering, and capturing value (Richardson, 2008; Osterwalder & Pigneur, 2010). BM assessment can be conducted by understanding the design parameters characterising the activity system of certain design elements and how they are interlinked (Zott & Amit, 2010). The activity system content is about performed activities. The activity system structure evaluates the linkages between activities and how important they are in the BM. The activity system governance shows who performs which activity (Zott & Amit, 2010).
Circular business models (CBMs) include the environmental dimension while exploiting business opportunities (Nußholz, 2017). They are known for connecting a BM to circular life-cycle thinking of products and manufacturing (Bocken et al., 2016; Fraccascia et al., 2021), and facilitate material and energy cycles in production and consumption by extending life cycles of materials and energy as well as slowing, closing, and narrowing resource loops (Geissdoerfer et al., 2020). The major BM patterns for CE are (1) repair & maintenance, (2) reuse & redistribution, (3) refurbishment & remanufacturing, (4) recycling, (5) cascading & repurposing, (6) organic feedstock with industrial symbiosis and resource recovery (Lüdeke‐Freund, Gold & Bocken, 2019).
Social enterprises exploit market opportunities to solve social problems (Dees, 2012; Jin, 2019). A social enterprise serves disadvantaged members of society (Defourny, 2001). BMs of social enterprises are designed to create social and economic value to achieve a certain societal impact and profit (Carayannis et al., 2021; Gupta et al., 2020). The motivations behind a social enterprise are paramount, and the means of value capturing in a for-profit or non-profit organisation is subordinate (Santos, 2012). However, a social enterprise employs a business approach to achieve a higher societal goal and advance society at large (Gauthier et al., 2020). Examples of economic characteristics and indicators of social enterprises are the continuous activity to produce goods and/ or sell services and a minimum amount of paid work. The social dimension includes, among others, the aim to benefit the community, the participatory nature involving affected people, and limited profit distribution (Defourny, 2001).
So-called hybrid organisations not only aim to achieve societal goals, but also environmental or ecological goals financed by their profits (Zaccone, Santhià & Bosone, 2022). BMs of these hybrids can be manifold, even circular, and social businesses can be seen as hybrids because they actively incorporate more than one dimension. When combining the three dimensions of sustainability in a BM and promoting environmental goals by CE measures, this organisational form can be named a circular-social-hybrid enterprise. We define circular-social-hybrid enterprises as financially self-sustaining while applying a mix of circular and social business models (figure 1). Hence, these enterprises increase all TBL dimensions (Elkington, 1994). Circular-social-hybrid BMs are sub-types of sustainable BMs because they aim for social goals, contribute to the environmental dimension with CE approaches, and generate high revenues for reinvestments to reach a financially self-sustaining state. Figure 1 depicts the interrelatedness of circular and social enterprises becoming a hybrid.
The three dimensions of sustainability follow different goals – economic, environmental, or social – so the impact is to be measured for all three dimensions. Measuring a company’s social impact is still challenging because there are no unified standards for measuring the social impact in CE enterprises (Padilla-Rivera, Russo-Garrido & Merveille, 2020). Most of the developed tools and frameworks for social impact measurement are based on the TBL and firm size, but there is still a lack of implementation into practice (Kah & Akenroye, 2020). Companies applying a circular business can differ greatly in terms of social practices. Hence, individual social impact measurement using indicators is an alternative. Identified social indicators of the CE are consumer health and safety, poverty, food security, and governance (Padilla-Rivera, Russo-Garrido & Merveille, 2020). Additionally, Walker et al. (2021) categorise indicators by stakeholder groups with workers being the most important group, followed by local communities, value chain actors, consumers, and society. In contrast, Reinales, Zambrana-Vasquez & Saez-De-Guinoa (2020) used a series of indicators ranging from training and education to consumers’ health and safety. These differing approaches indicate the individual nature of social impact measurement within the CE. Without a widely accepted framework, researchers have drawn on standard guidelines from social life cycle assessment and applied individual categories (Reinales, Zambrana-Vasquez & Saez-De-Guinoa 2020; Walker et al., 2021).
Social impact measurement is challenging because social aspects are complex and often intangible. The same accounts for identifying quantitative and qualitative tools for reporting social effects to stakeholders (Kah & Akenroye, 2020). Since every social enterprise has different objectives and rationales for measuring social impact, there is no “one-size-fits-all” approach, standard, or best practice (Kah & Akenroye, 2020; Walker et al., 2021). There is no national or international policy that guides measurement, no independent state labels for good social practice, a lack of information on the supply chain, and limited knowledge about the topic due to limited resources. The existing assessment tools are very complex, and individual social aspects can be too sensitive to be reported. The greatest barrier is measuring the long-term nature of social effects (Walker et al., 2021). Social impact measurement in CE enterprises is even more challenging because it often involves assessing complex and interconnected systems (Eizenberg & Jabareen, 2017), but it is important to ensure that the benefits of the CE are distributed equitably and that it improves the well-being of individuals, companies, and communities.
This paper applies the single case study methodology and uses qualitative primary and secondary data. The aim is to explore the phenomenon of a circular-social-hybrid company and the barriers to social impact measurement in this hybrid setting. A case study approach is a useful tool to explore novel research contexts (Ketokivi & Choi, 2014), which applies to the goals of this paper. Moreover, in a case study setting, the researcher has no control over events, and the unit of analysis is a contemporary phenomenon within a real-life context (Yin, 2009). Since these conditions are fulfilled, approaching the research question with a single case study methodology seems appropriate. Primary data is collected by conducting 15 interviews with managers and employees of the company. Conducting interviews is a valid method for gathering rich qualitative data in complex, rare, and high-level business situations (Eisenhardt & Graebner, 2007). The interviews are conducted in November and December 2022 online and face-to-face. All interviews are conducted in German. Transcripts are compiled, and translated into English. In total, there are 95 pages of interview transcripts analysed. Out of the 15 interviews, four interviewees are female, and 11 are male. Five interviewees have a communicated or visible disability. Table 1 shows the positions of the interviewees in the company. For reasons of triangulation, secondary data is collected through the company’s website, the latest United Nations Global Compact progress report, information from Deutscher Nachhaltigkeitskodex (2016), and newspaper articles (Dietz, 2013).
Member of the management board (Nr. 1)
Marketing Manager (Nr. 2)
CSR Manager (Nr. 3) and CSR Junior Manager (Nr. 4)
Branch Manager A (Nr. 5) and B (Nr. 6)
Representative for disabled (Nr. 7) and severely disabled persons (Nr. 8)
Social worker (Nr. 9)
Logistic (Nr. 10)
Online shop (Nr. 11)
Procurement (Nr. 12)
Technical/ Sales (Nr. 13)
Data erasure A (Nr. 14) and B (Nr. 15)
Table 1: List of interview partners
By simultaneously analysing the interviews during data collection, it was found that data saturation is achieved after 15 interviews because the data did not change significantly after the last set of interviews. The analysis approach is inductive, meaning that the collected data is analysed on its own categorisation (Eisenhardt, 1989). In the next step, related scientific studies are compared to the findings of the specific research context of this case study. Hence, an open coding approach is applied based on grounded theory (Corbin & Strauss, 1990). To apply the dual-control principle, the codes and categories are developed by two authors, and compared to receive the intercoder reliability.
This case study is conducted with and about AfB, Europe's largest non-profit IT company headquartered in Germany with 20 locations, was founded in 2004, generated more than 60 million EUR revenue in 2020 (Bonventure, 2021), and employs 290 people in 2022 (AfB, 2023c). 45% of their employees have a disability, with around 25% physical and 75% mental disabilities. The company name is an abbreviation of “Work for People with Disabilities” and is a subsidiary of i500 gAG. AfB aims to create 500 permanent jobs for people with disabilities. With its legal form of a gGmbH, AfB is obliged to meet a disability quota of 30% to 50% to fill its jobs with severely disabled people, which is monthly checked by the authorities. In return, AfB receives a significant reduction of taxes in Germany with only 7% VAT. By providing jobs for disadvantaged people and people with handicaps, the company contributes to a more inclusive society (Wessel, 2014) and strengthens the local economy.
The overall sustainability impact is depicted in figure 2 by applying the framework for sustainable circular BM innovation of Antikainen & Valkokari (2016) to map the BM of the AfB. It shows the ecosystem level, business level, and sustainability impact. The two-sided BM offers data erasure service for B2B partner companies selling their used IT equipment to AfB (AfB, 2023d). There are three options for partner companies: (1) AfB buys the 2-3 years-old high-quality devices of partner companies, (2) AfB picks up and erases data free of charge for older and medium-performing devices, and (3) AfB gets paid by partner companies for pickung up old and low-performing devices to erase data and recycle materials or parts of the devices (AfB, 2023e). Partner companies can also donate IT devices to AfB. The devices up to five years and with high performance are remanufactured and updated to be sold to end customers like private individuals or other (governmental) organisations. So, there is revenue from the service provision B2B, and the sale of the devices is mostly B2C. Additionally, AfB receives governmental funds and applies for research project funds.
The CE activities of AfB are deeply rooted in the BM (Dietz, 2013). AfB takes over PCs, PC boxes, servers, networks, notebooks, laptops, tablets, cell phones, and mobile phones of partner companies that are out of service, deletes the data, refurbishes the devices, equips them with updated software and sells them mainly to private individuals and other organisations such as NGO’s (table 2). Around two-thirds of the decommissioned equipment is remanufactured through AfB's value creation process and returned to the usage cycle. Any parts or materials that cannot be reused are recycled in a recycling station of AfB or sold to recycling companies in Europe. The aim is to stop the export of e-waste to the global south, increase the recycling quota, and minimise transport to reduce further emissions. According to Lüdeke‐Freund, Gold & Bocken (2019), this circular part of the BM deals with remanufacturing which indicates dismantling, cleaning, checking, testing and replacing broken parts to create second-hand products as good as new: “Products are resold and can substitute for new products and virgin materials […]. The overall value creation potential of refurbishment and remanufacturing is based on access to goods and components that can be resold, enhanced reputation as a manufacturer, products with as-new quality (including warranty), a reduction of waste handling costs, and less social externalities.” (pp. 49). Therefore, AfB has a strong partner network of companies to get access to IT hardware and provides a 12-month warranty to create a strong customer base.
Collection of discarded devices by delivery or pick-up
Registration of devices
Data erasure with special software
Testing and categorisation into refurbishment and recycling
Refurbishment, cleaning, repairing, and updating devices
Dissembling single parts to be reused and materials for recycling
Remarketing and sale of second-hand devices to individuals, organisations, or schools
Recycling of materials in AfB recycling company and specialised disposal companies
Table 2: Procedure and activities of AfB for CE
Effects of CE measures are protection of the environment and climate due to reduced e-waste (especially in the global south), CO2 and other emissions, savings in water, energy, natural resources, and protection of the mining regions of primary resources such as rare earths like cobalt, lithium, copper, gold, etc.
In the absence of an appropriate social impact measurement tool for the circular-social-hybrid BM of the AfB, interviewees are asked who the stakeholders of the company are, what social activities are undertaken, and which effects the activities have. Table 3 presents their answers. AfB has several internal and external stakeholders and carries out various social activities. Internal stakeholders are all employees and managers. External stakeholders are the partner companies, NGO partners and schools, customers, public authorities, and society. As an overarching effect, AfB serves as a role model for other companies and all people in society to behave in an inclusive social way.
Job creation for people with disabilities in the primary labour market
For individuals: own money, participation, self-esteem, appreciation
Job security by permanent employment contracts: payment above minimum wage
Financial security and pension for employees
Barrier-free workplace equipment & individual adaption of workstations: e.g., reading magnifiers through pallet trucks, ergonomic chairs, no flashlight on forklift trucks because of risks of epileptic shocks, lift trucks for people with back problems, one-handed keyboards
Physical company is barrier-free – total equality in performing the job
Good and inclusive OHS system: e.g., visual instructions and fire alarm for deaf people
Representative of handicapped and severely handicapped employees, integration office
Team cohesion, sense of belonging.
Diverse company in age, cultural & professional backgrounds, level of education, and types of disabilities
Image, role model
Training for managers and team leaders: e.g., conflict management, work-accompanying socio-psychological support for disability types
Skill acquaintance and conflict resolution
Training for employees’ hard and soft skills: e.g., shared company values, communication & conflict management
Inclusion of deaf people
New promotional positions filled internally
Acquaintance of qualifications and skills
Open hiring practice
More (diverse) applicants
Internship before permanent contract
Assessment of professional and team fit, type of work, stress level, etc., for applicants and employer
Onboarding with trainers to find the best position/ task
Regular employee reviews/ meetings
Appraisal, motivation, incentives, mutual feedback
Branch managers are contact persons: actively building a trustful relationship with employees and solving individual problems
Intranet for internal communication across locations and departments
Substitution of employee performance evaluation forms with feedback talks
Informal talks of manager and employees at lunch or in the social room
Good work atmosphere
Community events for team building and cohesion – during and after work
Free water, coffee, and fruit boxes in offices
Employee discount for AfB products
Sell used IT equipment to AfB
Reduced costs and additional revenue from sales
Joint podcasts on environment & social inclusion with partners
Better company image
Donation campaigns for IT equipment
Sustainability and ESG reporting
Donation campaigns for money or IT equipment via Stifter Helfen platform
Initiating Digital Social Award together with NGO partners
Visibility as an employer and new partner
AfB presents inclusion topics
High quality IT equipment for low prices, including a warranty
Digital inclusion of low-budget households
Contact person for customers
Good customer service
Regular consultation hours in AfB shops for seniors
Digital inclusion of the elderly
Job creation for disadvantaged people and people with disabilities in the primary labour market
Fewer people in workshops for people with disability
Internships for pupils from special schools
Recruiting for AfB, career prospects for young people
Job creation for disadvantaged people in the job market
Less burden on the public social system and increasing tax payments
Support of Paralympics and Special Olympics
Awareness raising, education, self-marketing
Social fund of mobile learning for school kids of low-income households
IT donations for schools
Own direct donations of monetary and IT to e.g., flood victims
Immediate help for people in need
Table 3: Social activities and effects from a stakeholder perspective
As shown in table 3, the effects of social activities are manifold and serve many stakeholders. First, there is a positive effect on the individual level for every employee since having a permanent work contract leads to a feeling of financial security for the work life and pension. By offering jobs, particularly to disadvantaged people in the job market and people with disabilities, a feeling of freedom, self-esteem, and being needed and highly valued is created. One employee stated that they do not feel like a number in the company but are highly valued as a person, regardless of impairments (Interview Nr. 11). By investing in the people’s skills, not only the company wins by filling higher positions with internal people, but the person gains career prospects. Second, there is an impact on society in general because AfB shows that the inclusion of very diverse people can work in a successful and growing company. By valuing each person’s strengths and giving them the physical means and mental support at hand, everybody works together, and “at some point, you no longer notice whether the colleague is impaired or not” (Interview Nr. 13). All communication efforts make the whole topic of inclusion more visible in society. Third, there is an overall positive economic effect because the people create value for the company, and the company creates value for society. Additionally, there are fewer social welfare costs for the public social system. The local economy also benefits from AfB locations because there are many new job opportunities for disadvantaged people in this region.
The greatest advantage of social impact measurement is that trust is created among stakeholders by validated data, impact reporting, and transparent communication. By exact impact measurement, the role model function of the AfB gets credible, partner companies can use validated data for their sustainability and ESG reports (AfB, 2023b), conscious customers are attracted, and it is beneficial for recruiting too.
Table 4 shows the results of the interviews for internal and external social impact measures for quantitative and qualitative data at AfB. Quantitative numbers are rather easy to record like the disability quota, number of trainings, money spent on workplace equipment, and number of IT devices donated. For all soft factors, there is the commonly acknowledged problem of measuring a company’s social impact because social aspects seem intangible, and data is hard to collect. The same problem accounts for the AfB (Interview 1, 2 and 3). No impact measurement tool presented by Kah & Akenroye (2020) seem to be of use to analyse the social impact of this circular-social BM.
Social Impact Measure
Disability quota: Number of jobs for people with disabilities1
Practical implication on the hiring process: For every new hire, a person with a disability also has to be hired to meet the monthly disability quota
Number of people with mental and physical handicaps
Other diversity measures: age, gender, nationality, professional background
Number of trainings per employee and manager
Number of employees applying for the internal social fund, and total money spent on employees
Money spent on special workplace equipment
At the branch, only economic measures: how many people have worked where on which day and how many pieces have been processed
Social Return on Investment
Number of donated devices or devices sold at a lower price to NGOs, schools, etc.
Number of school classes equipped with new IT
Number of partnerships with other NGOs like NABU to collect old devices from private households
Number of harmful substances and toxicities saved, leading to an increase in human life in years (LCA)
Amount of money and devices collected for donation campaigns
Individually responding to the needs of people internally by branch managers and social workers
Regular employee /appraisal interviews with open questions
Observe the development of every single person: days of absence, feedback of them or others about them, etc.
Table 4: Social impact measurement at AfB
However, the challenge remains that we cannot directly infer effects from activities. It is possible to detect the number of activities and maybe also infering an individual effect on the participants of the activity through feedback talks or surveys. But what are the overall effects for the company and how are the activities and effects interlinked with each other? The activities and effects do not stand alone but create an overall social impact together. Therefore, the BM design element activity sytem structure of Zott and Amit (2010) can be of use to clearly identify how the activities are linked and how important there are in the BM. For the AfB, the social activities are of crucial importance – even though some might be more important than others. This is hard to evaluate because every stakeholder or affected group will rank the importance of single activities differently. For example, the interpreter for the deaf people is very important for them to communicate with colleagues and superiors, but it is also important for the company because the potential of their skills is unlocked and contributes to the overall company performance. However, for other employees, the interpreter is not important. In further development of the paper, the design parameters of activity systems of Zott and Amit (2010) are used on a broader range to better understand the interlinkages of the social activities and effects.
Collecting data on social impact involves several problems because social aspects are often intangible. For example, how to account for individual performance if only team results count but people’s performance cannot be compared due to their individual impairments, but everyone is supposed to do the best of their ability? Table 5 shows the various barriers that come up when measuring social aspects.
Barriers to quantitative data collection
Barriers to qualitative data collection
Lack of time and resources for data collection
Need to find out the reasoning behind the numbers
No standards, clear KPIs, or taxonomy for measuring and reporting social issues
There are sensible aspects that a company should not ask
Lack of benchmarks to calculate comparisons or impact on the region
No capacity to receive feedback from every employee in an anonymous interview
Difficulty of calculating comparative benchmarks: e.g., the higher the impairment level, the lower the production figures are. How to measure the difference between the AfB and a standard company?
Output is communicated, not the effect
Working with average values and often no tangible figures
AfB should develop its own impact logic
Measuring effects of environmental measures on people
Showing the contribution of AfB on societal development and inclusion of people with disability in society
Table 5: Barriers to quantitative and qualitative data collection for social impact
For internal purposes, interviewees often mentioned that giving and receiving regular feedback in a talk with their manager is most important. Therefore, creating a relationship of trust between managers and employees is essential. Responsible managers actively approach their subordinates for regular talks and show empathy and persistence to create trust and a good feedback culture. Suppose branch managers do not have the time to speak with every subordinate. In that case, there is the possibility to give anonymous feedback in a complaint box but how can the outcome or the effect of an employee appraisal talk on the employee be measured? One of the most significant barriers is measuring the effect of a specific social activity. Despite the pure number of feedback talks, what is the effect of all the feedback talks? So, qualitative measurement and reporting for these intangible social activities and effects are needed. The focus should be on social KPI development, its definition, boundaries for measurement, the importance of social KPIs for stakeholders, and the type of measurement. Especially the know-how on social performance measurement is to be improved.
Quantitatively, some numbers are already collected, like occupational health and safety, resilience, work-life balance, vacation days, salaries, etc. There is also a strong knowledge of ecological factors by advancing the endpoints of LCAs with the advantage of calculating indirect effects on people like human health in days. Additional quantitative measures could be number of student workers, trainees, and fluctuation, number of applicants with a disability, number of successful applicants as long-term unemployed, number of successful applicants with disability who are still in the company after two years and the rate of successful internships.
On a regional and national level, the impact of job creation in the region, the additional purchase power by new jobs in the region, the happiness of people due to finding a workplace, the social security contribution, and the reduced tax burden of social workshops could be very valuable figures. However, it is extremely difficult to calculate because there are several other variables in the calculation, some soft facts are hard to measure in numbers, and benchmarks are missing to calculate the actual effect on a region or even nation.
To overcome barriers of collecting qualitative data for social impact measurement, an interviewee had the idea that an independent person could visit all branches, and talk to the employees and managers to evaluate individual social impact. Another idea was to involve an external team of psychologists and social workers who interview every employee anonymously, and communicate the detected barriers so that managers could find a solution. Both ideas would cost time and money, but in some cases, quantitative feedback is limited because there is no possibility to find out the reasons behind certain statements. However, since quantitative feedback measures do not require too much time to collect data, there could be a standardised regular feedback survey to express feedback which could improve employee satisfaction. It is also a solution if there is a trust issue with the responsible manager. The integration office could handle the evaluation and contact the concerned managers to find a solution. In contrast, overvaluation is to be avoided since employees often share feedback informally in a talk with their managers or show their dissatisfaction. So, goals and boundaries for social impact measurement have to be defined from the beginning.
There is no sufficient way of analysing the BM of circular-social-hybrids because there are components of simultaneously applied economic, circular, and social BM parts. This paper aims to understand the circular and social activities and effects of AfB’s BM by applying proven frameworks of analysis. The bottom line of these results is depicted in figure 3 and presents a stepwise approach to assess a circular-social-hybrid BM. First, it is essential to determine the stakeholder groups of the company. Second, all social and circular activities are listed. Third, social and circular effects are allocated to each activity which can also interfere. For example, a certain circular effect, such as reducing toxic substances in land and water, can have a significant positive impact on human health and an increase in years of life. Fourth, the effects are related to the individual (micro), organisational (meso), or societal (macro) level. For example, by providing jobs on the primary labour market with permanent contracts especially to disadvantaged people and people with disabilities, there are several effects for every employee on the individual level because they experience financial security, personal development with qualifications and an increase in self-esteem to be part of the society and contributing to it. On the organisational level, this model is a unique selling proposition for AfB. On the societal level, fewer people are in the public social system and workshops for disabled people, and simultaneously there is an increase in tax income which is beneficial for the public social system.
1. Determine stakeholders
2. Allocate Activities
3. Assign Effects of Activities
4. Assess Impact
Figure 3: Stepwise approach to impact assessment of circular-social-hybrids (own illustration)
Since there is no “one-size-fits-all” approach, standard, or best practice to measure the social impact, especially of companies like the AfB (Kah & Akenroye, 2020; Walker et al., 2021), the stepwise approach in figure 3 is a first contribution. Table 5 shows the problems allocated to qualitative and quantitative data collection. So, when deciding on an impact measurement tool, the type of data collection should be considered with the strengths and weaknesses of qualitative and quantitative data to match the desired results. To get an overview of a phenomenon, quantitative data is desired because it is relatively easy to collect at a low-cost. Collecting qualitative data is preferred if the aim is to get to know the reasoning behind a specific phenomenon, which tends to cost time and money. Walker et al. (2021) found it difficult to measure the long-term nature of social effects and their measurement. This paper confirms their findings. In the same vein, this paper finds that social impact measurement in CE enterprises is challenging because of the complex BMs with interconnected but different goals for the three sustainability dimensions (Eizenberg, & Jabareen, 2017).
The analysis of AfB’s BM by interviewing managers and employees showed that the CE approach allows the division of work into small-scale steps and high specialisations, so people with less education, and mental or physical ability can find a good workplace. Hence, CE can be seen as a facilitator of social integration. On the other hand, this requires a lot of human power and high costs that can potentially lead to a conflict of interest. Jin (2019) finds that social entrepreneurs can successfully manage these tensions and find the right balance between the seemingly conflicting goals of financials and social/ circular outcomes if they are committed to specific company values and goals. The case of AfB shows exactly that since employment of people with disability is the declared aim of AfB.
In general, this paper contributes to the business model literature (Massa, Tucci & Afuah, 2017) by conceptualising the specific circular-social-hybrid form of a BM. More specifically, it adds value to the circular business model literature (Antikainen & Valkokari, 2016; Lüdeke‐Freund, Gold & Bocken, 2019), social business model literature (Defourny, 2001), and impact measurement literature (Arena, Azzone & Bengo, 2015; Kah & Akenroye, 2020) by a theory testing approach of applying frameworks from each domain to one case to integrate the three sustainability dimensions (Elkington, 1994). The description of the economic dimension of this impact BM is facilitated with the framework of Antikainen & Valkokari (2016) that is an adaption of the original business model canvas (Osterwalder & Pigneur, 2010) to impact companies. The categorisation of the CBM is undertaken by the work of Lüdeke‐Freund, Gold & Bocken (2019). In the absence of a framework to analyse circular-social hybrids, this paper lists the social activities of the company for the stakeholders and allocates social effects – either on an individual, organisational, or societal level (figure 3). Practitioners, consultants, and researchers can use this stepwise approach to assess the impact of a circular-social-hybrid. Additionally, the discussion about qualitative and quantitative data collection is of use to decide first on the goal of measurement, second on the appropriate impact measurement tool (Kah & Akenroye, 2020), and third type of data collection, to not waste time and money and get satisfying results.
This study has several limitations due to its methodology of a single case. By analysing one company, the findings cannot be generalised. Furthermore, interviews are conducted with internal stakeholders only. For the aim of this study, the scope of data collection is sufficient because analysing circular-social-hybrid BMs is novel and of explorative nature. Hence, analysing data in-depth for a single case is the preferred way to get a first overview of the topic, develop a first working definition, and find the right tool to analyse the phenomenon under research.
Future research is invited to use and test this stepwise approach to get an overview of the impact of a circular-social-hybrid BM. Additional work needs to be done on defining and characterising hybrids, especially the intersection of circular and social businesses. The next step includes developing measurement tools and comparative indicators for improvement. Particularly the social dimension is problematic to get defined, KPIs developed, and tools to be tested. Hence, there is a need for empirical and conceptual studies. Another interesting and under researched topic is about tensions of hybrids and how to measure each dimension of the BM and evaluate their goals and interests to manage upcoming tensions due to conflict of interests between the three dimensions of sustainability.
AfB. (2023a) About Us. https://www.afb-group.de/en/about-us [Accessed 6th January 2023]
AfB. (2023b) Certificate of Impact. https://www.afb-group.de/en/added-values/certificate-of-impact [Accessed 6th January 2023]
AfB. (2023c) Social Company. https://www.afb-group.de/en/sustainability/social-company [Accessed 6th January 2023]
AfB. (2023d) IT-Ankauf von Unternehmen und Behörden. https://www.afb-group.de/it-remarketing/it-ankauf/ [Accessed 29th January 2023]
AfB. (2023e) Ankauf von gebrauchter IT-Hardware. https://www.afb-group.at/it-remarketing/hardware-abgabe/ [Accessed 29th January 2023]
Antikainen, M. & Valkokari, K. (2016) A Framework for Sustainable Circular Business Model Innovation. Technology Innovation Management Review. 6 (7), 5–12. https://doi.org/10.22215/timreview/1000.
Arena, M., Azzone, G. & Bengo, I. (2015) Performance Measurement for Social Enterprises. International Society for Third Sector Research. 26, 649–672. https://doi.org/10.1007/s11266-013-9436-8.
Bocken, N. M. P., de Pauw, I., Bakker, C. & van der Grinten, B. (2016) Journal of Industrial and Production Engineering. Journal of Industrial and Production Engineering. 33 (5), 308–320. https://doi.org/10.1080/21681015.2014.1014298.
Bonventure (2021). Erfolgreicher Exit bei AfB social and green IT. https://bonventure.de/erfolgreicher-exit-bei-afb-social-green-it/ [Accessed 26th January 2023]
Carayannis, E. G., Grigoroudis, E., Stamati, D. & Valvi, T. (2021) Social Business Model Innovation: A Quadruple/Quintuple Helix-Based Social Innovation Ecosystem. IEEE Transactions on Engineering Management. 68 (1), 235–248. https://doi.org/10.1109/TEM.2019.2914408.
Centobelli, P., Cerchione, R., Chiaroni, D., Del Vecchio, P. & Urbinati, A. (2020) Designing business models in circular economy: A systematic literature review and research agenda. Business Strategy and the Environment. 29 (4), 1734–1749. https://doi.org/10.1002/bse.2466.
Corbin, J. & Strauss, A. (1990) Grounded Theory Research: Procedures, Canons and Evaluative Criteria. Zeitschrift für Soziologie. 19 (6), 418–427. https://doi.org/10.1515/zfsoz-1990-0602.
Dees, J. G. (2012) A Tale of Two Cultures: Charity, Problem Solving, and the Future of Social Entrepreneurship. Journal of Business Ethics. 111 (3), 321–334. https://doi.org/10.1007/s10551-012-1412-5.
Defourny, J. (2001) From third sector to social enterprise. London and New York. Routledge. https://www.taylorfrancis.com/chapters/edit/10.4324/9780203487747-10/third-sector-social-enterprise-european-research-trajectory-jacques-defourny.
Deutscher Nachhaltigkeitskodex. (2016) AfB gemeinnützige GmbH. https://datenbank2.deutscher-nachhaltigkeitskodex.de/Profile/CompanyProfile/7673/de/2016/dnk [Accessed 10th January 2023]
Dietz, C. (8 August 2013) Gut arbeiten trotz Handicap. Zeit Online. https://www.imperial.ac.uk/admin-services/library/learning-support/reference-management/harvard-style/your-reference-list/ [Accessed 27th January 2023]
Eisenhardt, K. M. (1989) Theories from Case Study Research. Academy of Management Review. 14 (4), 532–550. https://doi.org/10.2307/258557.
Eisenhardt, K. M. & Graebner, M. E. (2007) Theory Building from Cases: Opportunities and Challenges. Academy of Management Journal. 50 (1), 25–32. https://doi.org/10.1002/1097-0266(200010/11)21:10/11%3C1105::AID-SMJ133%3E3.0.CO;2-E.
Eizenberg, E. & Jabareen, Y. (2017) Social Sustainability: A New Conceptual Framework. Sustainability. 9 (1), 68. https://doi.org/10.3390/su9010068.
Elkington, J. (1994) Enter the Triple Bottom Line. Chapter 1. https://johnelkington.com/archive/TBL-elkington-chapter.pdf.
Ferasso, M., Beliaeva, T., Kraus, S., Clauss, T. & Ribeiro‐Soriano, D. (2020) Circular economy business models: The state of research and avenues ahead. Business Strategy and the Environment. 29, 3006–3024. https://doi.org/10.1002/bse.2554.
Fraccascia, L., Giannoccaro, I., Agarwal, A. & Hansen, E. G. (2021) Business models for the circular economy: Empirical advances and future directions. Business Strategy and the Environment. 30, 2741–2744. https://doi.org/10.1002/bse.2896.
Gauthier, C., Shanahan, G., Daudigeos, T., Ranville, A. & Dey, P. (2020) Tackling economic exclusion through social business models: a typology. International Review of Applied Economics. 34 (5), 588–606. https://doi.org/10.1080/02692171.2019.1707785.
Geissdoerfer, M., Pieroni, M. P., Pigosso, D. C. & Soufani, K. (2020) Circular business models: A review. Journal of Cleaner Production. 277, 1–17. 123741. https://doi.org/10.1016/j.jclepro.2020.123741.
Gupta, P., Chauhan, S., Paul, J. & Jaiswal, M. P. (2020) Social entrepreneurship research: A review and future research agenda. Journal of Business Research. 113, 209–229. https://doi.org/10.1016/j.jbusres.2020.03.032.
Jin, B. (2019) The Practical Intelligence of Social Entrepreneurs: Managing the Hybridity of Social Enterprises. Entrepreneurship Research Journal, 1–19. https://doi.org/10.1515/erj-2018-0007.
Kah, S. & Akenroye, T. (2020) Evaluation of social impact measurement tools and techniques: a systematic review of the literature. Social Enterprise Journal. 16 (4), 381–402. https://doi.org/10.1108/SEJ-05-2020-0027.
Ketokivi, M. & Choi, T. (2014) Renaissance of case research as a scientific method. Journal of Operations Management. 32 (5), 232–240. https://doi.org/10.1016/j.jom.2014.03.004.
Lewandowski, M. (2016) Designing the Business Models for Circular Economy—Towards the Conceptual Framework. Sustainability. 8 (1), 43. https://doi.org/10.3390/su8010043.
Lüdeke‐Freund, F., Gold, S. & Bocken, N. M. P. (2019) A review and typology of circular economy business model patterns. Journal of Industrial Ecology. 23 (1), 36–61. https://doi.org/10.1111/jiec.12763.
Massa, L., Tucci, C. L. & Afuah, A. (2017) A critical assessment of business model research. Academy of Management Annals. 11 (1), 73–104. https://doi.org/10.5465/annals.2014.0072.
Merli, R., Preziosi, M. & Acampora, A. (2018) How do scholars approach the circular economy? A systematic literature review. Journal of Cleaner Production. 178, 703–722. https://doi.org/10.1016/j.jclepro.2017.12.112.
Mies, A. & Gold, S. (2021) Mapping the social dimension of the circular economy. Journal of Cleaner Production. 321, 128960. https://doi.org/10.1016/j.jclepro.2021.128960.
Murray, A., Skene, K. & Haynes, K. (2017) The Circular Economy: An Interdisciplinary Exploration of the Concept and Application in a Global Context. Journal of Business Ethics. 140 (3), 369–380. https://doi.org/10.1007/s10551-015-2693-2.
Nußholz, J. (2017) Circular Business Models: Defining a Concept and Framing an Emerging Research Field. Sustainability. 9 (10), 1810. https://doi.org/10.3390/su9101810.
Osterwalder, A. & Pigneur, Y. (2010) Business Model Generation. A handbook For Visionaries, Game Changers and Challengers. Hoboken, New Jersey. John Wiley & Sons. https://www.speedytemplate.com/forms/business-model-template-3.pdf.
Padilla-Rivera, A., Russo-Garrido, S. & Merveille, N. (2020) Addressing the Social Aspects of Circular Economy: A Systematic Literature Review. Sustainability. 12, 1–17. 7912. https://doi.org/10.20944/preprints202009.0044.v1.
Ranta, V., Aarikka-Stenroos, L. & Mäkinen, S. J. (2018) Creating value in the circular economy: A structured multiple-case analysis of business models. Journal of Cleaner Production. 201, 988–1000. https://doi.org/10.1016/j.jclepro.2018.08.072.
Reinales, D., Zambrana-Vasquez, D. & Saez-De-Guinoa, A. (2020) Social Life Cycle Assessment of Product Value Chains Under a Circular Economy Approach: A Case Study in the Plastic Packaging Sector. Sustainability. 12 (16), 6671. https://doi.org/10.3390/su12166671.
Richardson, J. (2008) The business model: an integrative framework for strategy execution. Strategic Change. 175-6, 133–144. https://doi.org/10.1002/jsc.821.
Santos, F. M. (2012) A Positive Theory of Social Entrepreneurship. Journal of Business Ethics. 111 (3), 335–351. https://doi.org/10.1007/s10551-012-1413-4.
United Nations Global Compact. (2023) Company Information. https://www.unglobalcompact.org/what-is-gc/participants/118891-i500-gAG#cop [Accessed 10th of January 2023]
Walker, A. M., Opferkuch, K., Roos Lindgreen, E., Simboli, A., Vermeulen, W. J. & Raggi, A. (2021) Assessing the social sustainability of circular economy practices: Industry perspectives from Italy and the Netherlands. Sustainable Production and Consumption. 27, 831–844. https://doi.org10.1016/j.spc.2021.01.030.
Wessel, R. Second Chances. EY Exceptionnel, 40–43. https://rheawessel.com/wp-content/uploads/2018/03/Second-Chances.pdf [Accessed 10th January 2023]
Yin, R. K. (2009) Case Study Research. In: Yin, R. K. (eds.) (4th ed.). Thousand Oaks, California, United States of America. SAGE Publications. pp. 361.
Zaccone, M. C., Santhià, C. & Bosone, M. (2022) How Hybrid Organizations Adopt Circular Economy Models to Foster Sustainable Development. Sustainability. 14, 1-20. 2679. https://doi.org/10.3390/su14052679.
Zott, C. & Amit, R. (2010) Business Model Design: An Activity System Perspective. Long Range Planning. 432-3, 216–226.