Special issue Call for Papers at "Business Ethics, the Environment & Responsibility"
Circular practices and strategies for luxury companies – Reconciliating trade-offs, challenges, and unlocking opportunities
Guest Editors
Camila Lee Parka, Mauro Fracarolli Nunesa, Hyunju Shinb, Jose A.D. Machucac
a OCRE Research Laboratory, EDC Paris Business School, France
b Coles College of Business, Kennesaw State University, USA
c Departamento de Economía Financiera y Diréccion de Operaciones, Universidad de Sevilla, Spain
Background and Motivation
The business of luxury is based on certain pillars that make it different from any other. This follows the unique way luxury companies do things and, of course, the exclusivity and prestige of their offers (Jebarajakirthy and Das, 2021). The search to preserve traditions embedded in an ancient savoir-faire, for example, is at the core of most luxury brands' identity (Philippe et al., 2022), forging their relationships with competitors, suppliers, customers, and all those interested in fine products and services. Even though these traits may grant luxury companies with a sort of superiority vis-à-vis firms aimed at mass consumption, they can also translate into excessive conservatism and resistance to change. Not surprisingly, luxury companies are among those facing greater difficulties to incorporate changes in stakeholders' tastes and expectations while remaining true to their methods and practices. The emergence of sustainability as a key societal issue, however, has been pushing luxury companies to adapt their business models (Amatulli et al., 2021). Among other things, this comprises the redesign of production processes, the substitution of hazardous materials, and the abolition of condemnable practices such as the burning of unsold stock as an attempt to preserve brand value (Lee Park et al., 2021).
Issues linked to reverse logistics, recycling, and the resale of luxury products – to name a few – have been particularly problematic, either due to operational difficulties or because such initiatives may harm stakeholders' perceptions. As a result, luxury companies tend to find it difficult to embody circular approaches (i.e., take, make, use, reuse, repair, and recycle; Butt et al., 2023), often remaining grounded in linear production and consumption models (i.e., take, make, waste; Shrivastava and Zsolnai, 2022). At large, this situation may prevent the implementation of sustainable initiatives, compromising luxury firms' future in that regard (Jamali et al., 2022).
Seeking to contribute to a better integration of these subjects, the Special Issue "Circular practices and strategies for luxury companies – Reconciliating trade-offs, challenges, and unlocking opportunities" provides a forum for a qualified debate on the matter. Bringing together scholars from different management disciplines, we intend to collect articles dedicated to the specificities of the circular economy for the business of luxury. The complexity of the matter calls for an interdisciplinary perspective, with research rooted in diverse literatures being welcome.
From an operations and supply chain management perspective, for instance, issues linked to the geographic location of operations, the choice of materials, product design, and the development of collaborative logistical processes can favour reuse and recycling (Villamil et al., 2022, Sherif et al., 2022). Matters connected to energy and water consumption in recycling procedures must also be clarified, as well as the fate of what cannot be repurposed (i.e., waste management). Still, companies' relationships with their supply chain partners – including customers – assume great importance in planning and controlling the flow of products and the success of their recovery (i.e., reverse logistics) (Ding et al., 2023).
The introduction of circular models into a traditional industry requires a greater understanding of their impacts on employees, with issues connected to their training and selection being at the forefront of this debate (Abdelmeguid et al., 2022). Changes can also lead to the replacement of professionals who are unable to adapt, which usually results in organizational trauma (i.e., layoffs; Noer 2009). Process automation with the introduction of machines and robots could aggravate these issues. These and other topics should be of interest to academics dedicated to the area of human resources management. The analysis of implementation costs, profitability of investments, and their impacts on the economic performance of companies, in turn, are themes commonly treated by scholars in the field of finance (e.g., Graham, 2022). In this sense, the introduction of circular models opens several possibilities for investigation, including improvements in the supply of credit associated with environmental gains (i.e., green credit; Chen et al., 2022), the predisposition of investors to allocate their resources in environmentally responsible luxury companies (i.e., green investments; Schaltenbrand et al., 2018), and the impact of these initiatives on market value (e.g., event studies).
Marketing managers, in turn, must face the threats that circular models may present for luxury companies, ensuring that the necessary changes do not compromise the value of brands (Confente et al., 2020). Challenging the idea that recycled products are of lower quality, or that they are not as noble as first-hand ones, will require communication efforts capable of reversing initial resistance on the part of more traditional consumers. The re-sale of luxury goods can be quite critical in this sense, with the commercialization of used items potentially damaging consumers' perceptions, as well as the revenues of companies. The disclosure of possible environmental performance improvements and their impact on the positioning of luxury companies are also worthy of attention. In parallel to these issues, marketing scholars still need to advance our understanding of the reputational impacts of environmentally harmful practices.
The understanding of recycling and re-sale as an additional factor of differentiation and, therefore, as a potential source of sustained competitive advantage (Suchek et al., 2021), invites strategic management scholars to investigate the subject. Connecting these issues to the literature on intangible resources may be particularly important for studies based on theories such as the resource-based view (Barney, 1991, Chaudhuri et al., 2022), while matters surrounding companies' relationships with actors in their competitive environment (e.g., competitors, suppliers) call for more comprehensive angles. Theoretical approaches supported by resource-dependence theory (Pfeffer and Salancik, 1978) or the rationale of the industry structure (Porter, 1979, 1980) may be more suitable for the latter.
Discussions around the role played by groups of stakeholders – both internal and external – and the distribution of responsibilities between the different actors involved represent gaps for scholars from related areas, including organisational studies and legal affairs. In this sense, investigations into the dynamics of pressure exerted by different segments of consumers, employees, environmentalists, governments, and local communities (Adomako et al., 2023) could form part of the Special Issue. The role of regulatory and legislative measures may be critical in that regard (Wasserbaur et al., 2022).
Finally, the relationship between circular economy and luxury represents an important object for scholars dedicated to the study of sustainable management in a broad way. Possibilities include the development of models capable of measuring and evaluating the real effect of circular models on companies' performance (Sudusinghe and Seuring, 2022). Specific debates about the ethicality of these measures are also possible, with the concepts of corporate social and environmental responsibilities serving as initial parameters for this (Saha et al., 2021).
Investigations focused on the uses and misuses of sustainability communication can bring important insights, evolving themes that, despite already being established in the literature, are still misunderstood in the luxury universe (e.g., greenwashing, socialwashing, corporate hypocrisy). In the same vein, studies around the sacrifices eventually necessary to evolve in environmental performance (i.e., sustainability trade-offs; Fracarolli Nunes et al., 2020) could support discussions linking circular models and their economic and social impacts. The potential of circular models to function as a protection of the reputational capital of luxury companies against social and environmental irresponsibilities (i.e., insurance and cross-insurance effects; Kang et al., 2016, Fracarolli Nunes et al., 2020) could also be considered.
Reflecting this panorama, themes, and topics of interest to this Special Issue include, but are not limited to:
Impacts of luxury firms' engagement in circular economy
- Understanding the potential of circular models as positioning instruments for luxury companies
- Analysis of the reputational impact of using recyclable/recycled materials, reselling products, and environmentally harmful inventory management practices (e.g., burning unsold products)
- Impacts of the implementation of circular models on the identity, image, and credibility of luxury companies, as well as on elements of consumers' perception (e.g., loyalty, attitude toward the firm, trust)
- Investors' perception and measurement of possible impacts on share prices (e.g., event studies).
- The possibility of circular models functioning as a protection for the reputational capital of luxury companies against social and environmental irresponsibilities (i.e., insurance and cross-insurance effects)
Manufacture, design, and production of luxury in the circular economy
- Development of specific recycling processes for the luxury industry and measurement of their environmental impacts (e.g., energy balance, emissions, water consumption)
- The relevance and impact of the choice of materials and product design for recycling in luxury
- Mapping possibilities for recycling, reusing, and reselling products and materials
- Waste management for goods and materials that cannot be recycled, reused, or resold
Performance and measurement of circular models for luxury firms
- Economic calculation and analysis of investments in circular models and their impacts on the profitability of luxury companies
- Effects on the supply and cost of credit for luxury companies engaged in implementing circular models
- Analysis of the potential of circular models to generate differentiation and be sources of sustained competitive advantage for luxury companies from the perspective of different theoretical bases (Resource-Based View, Resource Dependency Theory, Industry Structure)
- Definition and measurement of the impacts of circular models on the social and environmental performance of luxury companies
Ethical dilemmas and issues in the implementation of circular models by luxury companies
- Ethical and moral analysis of the precepts of the circular economy in the context of the operations of luxury companies
- Uses and misuses of sustainability communication to promote the circular economy by luxury companies (e.g., exaggerations, greenwashing, social washing, corporate hypocrisy)
- Investigations into the eventual social and economic sacrifices necessary for the implementation of circular models by luxury companies (i.e., sustainability trade-offs)
- Assignment of responsibilities for the introduction of circular models between focal firms and other actors involved (e.g., supply chain partners including consumers)
Issues in luxury human resources management in the circular economy
- Selection, training, and development of employees to operate circular models.
- Impacts of the ecological transition on employees' morale and the organizational climate due to possible layoffs, need for adaptation and coexistence/replacement with machines and robots (automation)
Supply chain management, logistics, and transportation of luxury within circular models
- Investigations on plant location and transportation initiatives for the successful adoption of reverse logistics
- Development of collaborative relationships with supply chain partners and their effects on the implementation and management of circular models by luxury companies.
The factors influencing luxury firms' adoption of circular models
- Study of the intensity and effectiveness of pressure from stakeholders (e.g., consumers, investors employees, environmentalists, governments, local communities) for the adoption of circular models by luxury companies and their reaction to these movements
- The role of regulatory and legislative measures as forces pushing the adoption of circular models by luxury companies
Format and Submission
Submissions must follow the https://onlinelibrary.wiley.com/page/journal/26946424/homepage/forauthors.html. Click or tap if you trust this link." data-linkindex="1">author guidelines established by Business Ethics, the Environment, & Responsibility, and should be made through the https://submission.wiley.com/journal/BEER. Click or tap if you trust this link." data-linkindex="2">BEER online submission system.
A special session will be held at a meeting organised by the same team of guest editors that will take place on March 7, 2024, in Paris La Défense (the 1st Meeting of the International Society for Luxury Management – ISLUX). The theme of the meeting coincides with that of the special issue ("Managing Luxury in the Circular Economy"), increasing synergies and enhancing the effects of its communication. Submissions to the conference encouraged, however the Special Issue IS NOT exclusive to those participating in the meeting, being equally open for contributions not previously presented in the event.
Submission window – September 1 to November 1, 2024
Guest editors' contact information
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Hyunju Shin
Kennesaw State University
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