Vol. 6, Issue 2, Part C (2024)

This paper sets out findings analysing how owners-managers of small and micro enterprises manage the adoption of circular economy business models in small and micro enterprises operating in a small island state. Small businesses employ between 10 to 49 workers and micro enterprises less than ten workers. The research purpose is to develop a conceptual model on how such businesses align their strategies with circular practices since they are a major economic driver for small island states. This is a grounded theory study, using Corbin and Strauss’s conditional matrix and Charmaz’s constructivist approach. The research was conducted in the unique settings of the small island state of Malta. To understand the role of owners-managers in the adoption of circular practices, in-depth interviews were carried out with forty owners-managers in retail, wholesale, service, logistics and manufacturing sectors. The findings show that the circular economy transition works best where there is an entrepreneurial outlook and that owners’-managers’ entrepreneurial outlook therefore significantly influences the adoption process. While the entrepreneurial outlook of Malta’s owners-managers faces challenges adopting circular business models, there are positive shoots of acceptance and innovation. Owners-managers’ outlook - composed of their attributes, skills, and values - is influenced by external and organisational factors. Data indicates that Malta is currently going through a developmental stage where owners-managers are at varying stages of adopting innovative practices and sustainable values. The study identifies three types of owners’-managers’ outlook in the circular shift of businesses namely the Ecopreneur, the Traditionalist and the Reluctant Adopter. This research provides policymakers with recommendations that will frame policies closer to reality on the ground. Few studies have yet focused on the circular shift of small firms in small island states, generally concentrating on larger firms in bigger countries. This research thus adds to existing knowledge about the circular economy.