On 20 August 2026, Hugo Firmo defended his PhD at BI. His research looks at the transition to the circular economy, what it takes for businesses to make the most of materials already in use, and why no company can manage the shift alone.
Tons of concrete, wood and other valuable materials are routinely taken from demolition and construction sites to landfill, even when they could still be used. The circular economy offers a different path: keeping resources in use within the economy and ending the constant extraction and disposal of natural materials.
Circular business models are an important vehicle for this shift. They change how firms create, deliver and capture value. Most research so far has looked at single firms, which misses effects across the wider system. In his thesis, Creating a Path to Sustainable Business: Growth, Narratives, and Value Rationality in Circular Business Models, Firmo asks how the transition to circular business models is shaped by interactions at several levels.
“Transitioning to circular business models is a multi-level coordination, narrative, and institutional alignment problem. It requires profound changes in the management of physical resources, challenging the foundations of how business is organized and requiring a deep reflection on what we value and prioritize,” says Firmo.
Growth depends on the whole system. In a circular economy, value is created by reusing and recombining materials that are already in circulation. Circular economic growth depends on the system’s ability to create greater value with the same or fewer materials. A single firm’s circular business model can deliver wider benefits only through a system that collectively produces greater value and supports the flow of reused materials, making them available at the right time and in the right amounts. Planetary boundaries and the fact that materials come back into use at different speeds put natural limits on growth.
New business models are negotiated through narratives. Firmo followed a construction company that built its new head office from recycled concrete taken from demolition projects. The stories and underlying logic of the new business model took shape step by step, through dialogue and contestation between circular economy advocates, sceptics and other stakeholders. Familiar stories gave the organisation stability during the change but slowed the pace of innovation.
Rigid plans can undermine their own goals. Over five years, Firmo followed two Scandinavian government agencies: one dredging a harbour, the other building a road and tunnel, both setting out safety and sustainability as their goals. The one that stuck rigidly to its plan made no progress on safety, even though that was an undisputed goal, while the one that scaled back its ambitions to adapt to external pressures kept its project moving and made real, even if partial, progress on sustainability. When an organisation is out of step with its internal and external structural conditions for a long time, which Firmo calls “systemic misfit”, its routines harden and the original goals give way. Falling short on one goal can also undermine another. For example, unresolved environmental concerns can stall progress, negatively impacting safety.
“Under pressure and misalignment, organizations tend to fall back on familiar profit-centric stories. While these stories can provide the structure needed to deal with pressing problems, they can also pull organizations away from sustainability goals. Adjusting short-term goals and the pace of innovation while remaining on track toward long-term objectives can be an effective way to manage these tensions,” he says.
Managers leading a circular shift need to coordinate with partners across the value chain to secure a steady flow of reused materials. Transitioning to a circular economy depends on the development of narratives that support a new way of thinking and of doing business. Creating new narratives through dialogue and managing the pace of change are critical challenges for managers. Managers can also assess whether their goals and the means to achieve them need adjusting, depending on how well they fit the conditions around them. Firmo calls such an adjustment “goal reanchoring”: scaling back ambitions for a period while keeping the long-term commitment. For policymakers, the findings suggest regulation should give organisations room to adjust, helping them reach their sustainability goals.
Between 2021 and 2026, Firmo carried out 55 interviews and took part in more than a dozen industry events in construction and dredging. He also analysed hundreds of news articles, reports and other documents. He spent one semester at SCANCOR, Stanford University, which was critical in developing and writing the thesis’s fourth paper, on institutional structures.
The third paper, co-authored with Tina Saebi, received a best paper recognition at the Academy of Management Annual Meeting 2025 in Copenhagen.
The thesis was supervised by Professor Ragnhild Kvålshaugen and Professor Lena E. Bygballe.
The Centre for Sustainability and Energy congratulates Hugo Firmo on his PhD.