Received: 13 June 2020 Revised: 29 August 2020 Accepted: 9 September 2020

DOI: 10.1002/bse.2641

RESEARCH ARTICLE

Circular economy and the policy: A framework for improving

the corporate environmental management in supply chains

Ipek Kazancoglu1 | Muhittin Sagnak2 | Sachin Kumar Mangla3 |

Yigit Kazancoglu4

1
Faculty of Economics and Administrative
Sciences, Business Administration, Ege Abstract
University, Izmir, 903450, Turkey The transition to the circular economy (CE) creates value through the closed-loop
2
Department of Information Management,
systems, reverse logistics, product life cycle management, and clean production in
Izmir Katip Celebi University, Izmir, 35620,
Turkey terms of corporate environmental management. During this transition process, the
3
Knowledge Management & Business Decision organization faces many barriers such as financial, organizational, technology-based,
Making, Plymouth Business School, University
of Plymouth, Plymouth, PL4 8AA, UK social, policy-related, market-based, and logistics-based barriers. The objectives of
4
Department of Logistics Management, Yasar this study are to propose a framework highlighting policy-related barriers for a supply
University, Bornova, Izmir, Turkey
chain in the transition to CE and finally discuss potential implications on enhancing
Correspondence corporate environmental performance of a business. Further, this study evaluates the
Sachin Kumar Mangla, Lecturer in Knowledge
causal relationships between the policy-related barriers using fuzzy Decision-Making
Management & Business Decision Making,
Plymouth Business School, University of Trial and Evaluation Laboratory (DEMATEL) method. The application was conducted
Plymouth, Plymouth PL4 8AA, UK.
in an apparel firm in Turkey. From findings, lack of legislation for efficient CE (C4),
Email: [email protected]
lack of mandatory requirements and responsibilities for manufacturers/suppliers for
the CE (C17), and lack of government support for environmentally friendly policies
(C2) are revealed as the most important barriers, respectively. It is found that lack of
attitude and awareness about CE in government institutions (C19) is the most
influencing factor, whereas lack of effective recycling policies to achieve quality in
waste management (C8) is the most influenced factor. The recommendations were
developed for enhancing the corporate environmental performance of businesses
through incentives and unique rewards, improving communication among stake-
holders, the government's perception of CE and current linear economy, cooperation
with nongovernmental organization (NGOs) and civil actions, the vision of govern-
ment towards circular principles, the circular public procurement, the local govern-
ments in circular policymaking, and awareness of bureaucracy and government
officials.

KEYWORDS

barriers, circular economy, corporate environmental management, fuzzy DEMATEL, policy,

supply chain management

This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium,
provided the original work is properly cited.
© 2020 The Authors. Business Strategy and The Environment published by ERP Environment and John Wiley & Sons Ltd

Bus Strat Env. 2020;1–19. wileyonlinelibrary.com/journal/bse 1

2 KAZANCOGLU ET AL.

1 | I N T RO DU CT I O N The objectives of this study are to address above gaps and needs
by proposing a framework highlighting policy-related barriers for the
The linear economy relies on “take, produce, consume, and waste” supply chain towards a CE and determining the relevance of the iden-
(Galv~ao, de Nadae, Clemente, Chinen, & de Carvalho, 2018; Masi, tified barriers for higher corporate environmental management. The
Kumar, Garza-Reyes, & Godsell, 2018; van Buren, Demmers, van der application was conducted in an apparel firm, which has its origins in
Heijden, & Witlox, 2016), which is not sustainable. According to Germany and located in Turkey. Further, the causal relationships
World Economic Forum and Ellen MacArthur Foundation, circular between the barriers were identified using fuzzy Decision-Making
economy (CE) is an economic model, which is regenerative or restor- Trial and Evaluation Laboratory (DEMATEL) method. Fuzzy DEMATEL
ative of type (Ellen MacArthur Foundation, 2014; World Economic is used to evaluate the barriers in various studies including green and
Forum, 2014, p. 15). CE also contributes to social value by preventing sustainable supply chains (Moktadir, Rahman, Rahman, Ali, &
unhealthy working conditions (van Buren et al., 2016). CE further Paul, 2018) and circular supply chain (Farooque, Zhang, & Liu, 2019).
helps in decreasing pollution, increasing the efficiency of resources, The contributions of this study are claimed as follows:
minimizing energy usage, reducing waste (Ghisellini, Cialani, &
Ulgiati, 2016; Gupta, Chen, Hazen, Kaur, & Santibañez Gonzalez, 2019; i. Identifying the policy-related barriers for supply chains towards
Li, Zhu, Jiang, & Li, 2016), protecting climate change (Stewart & CE in enhancing their corporate environmental performance.
Niero, 2018), having responsible production in the supply chain ii. Evaluating the cause and effect relations of each policy-related
(Jabbour et al., 2020; Li & Ma, 2015), creating eco-design by repairing, barrier.
reusing/refurbishing, recycling, and remanufacturing (Geissdoerfer, iii. Suggesting implications for managers by conducting a real-world
Savaget, Bocken, & Hultink, 2017), optimizing production of renew- application in the textile industry in an emerging economy, Turkey.
able energy, and decomposing waste in reusable resources (van Buren
et al., 2016) for higher value (Lehmann, de Leeuw, Fehr, & This study is composed as follows: Section 2 gives a literature
Wong, 2014) and a significant tool for sustainable development review about corporate environmental management and CE and gov-
(Betancourt Morales & Zartha Sossa, 2020). ernmental policy in transition to CE in supply chains. Section 3 reveals
CE transition requires firms to take innovative actions in supply policy-related barriers in CE to enhance corporate environmental
chains (De Angelis, Howard, & Miemczyk, 2018). This innovation management in supply chains. Section 4 presents the methodology,
includes changes in sustainable business processes ranging from prod- and Section 5 explains an industrial case study and the results of the
uct design to production and delivery to customers (Heyes, Sharmina, study. Section 6 summarizes discussions, and Section 7 includes
Mendoza, Gallego-Schmid, & Azapagic, 2018). Therefore, the existing research implications. Finally, Section 8 explains the conclusion and
business model needs to be transformed (Batista, Bourlakis, Liu, Smart, further research.
& Sohal, 2018; Werning & Spinler, 2020). Companies need to design
their new business models within the value network within the concept
of sustainability in their relations with supply chain members and cus- 2 | LI T E RA T U R E RE V I E W
tomers. Circular business models consist of a series of strategic deci-
sions for products and services to create economic and economic value 2.1 | Corporate environmental management and
(Centobelli, Cerchione, Chiaroni, Del Vecchio, & Urbinati, 2020; Wer- the CE
ning & Spinler, 2020). In this context, CE has started to be integrated
into corporate sustainability reports, business models, and operations Corporate environmental management consists of strategic, opera-
(Betancourt Morales & Zartha Sossa, 2020; Stewart & Niero, 2018). tional, and tactical decisions in all the activities of the businesses to
During the transition of CE in the supply chains, several crucial minimize the negative effects on the environment. Companies inte-
related barriers are anticipated. Few of those barriers are listed as grated environmental management practices with business strategies
institutional, policy-related, operational, financial and economic, (Boffelli, Dotti, Gaiardelli, Carissimi, & Resta, 2019; Cramer, 1998;
infrastructural, technological, customer, and social (Galv~ao et al., 2018; Resta, Dotti, Boelli, & Gaiardelli, 2015). CE, which focuses on resource
Govindan & Hasanagic, 2018; Kok, Wurpel, & Ten Wolde, 2013). and energy efficiency, reduces the flow of materials at every stage of
Govindan and Hasanagic (2018) highlighted the fact that the govern- the value chain (Aranda-Uson, Portillo-Tarragona, Scarpellini, & Llena-
ment has been among the most critical stakeholders affecting the CE Macarulla, 2020). The CE also aims to reduce waste of natural
implementation in supply chains. According to the study conducted resources and more generally protect the environment (climate change,
by Mangla et al. (2018) and García-Quevedo, Jové-Llopis, and Martí- biodiversity conservation) (Stewart & Niero, 2018). In the CE model,
nez-Ros (2020), government policies are one of the important barriers fewer resources are used due to the reduction in the number of
to implement CE. Further supported by Bet et al.'s (2018) study, one resources or the use of recycled raw materials to keep a constant level
of the main barriers is the inadequacy of regulations or policies in the of production (Figge, Thorpe, Givry, Canning, & Franklin-Johnson, 2018).
implementation of CE. Policy-related barriers include legislation, The CE is based on the principles of reduction, reuse, recycling,
taxation, funding, infrastructural, and procurement barriers (Guldmann refurbish, remanufacture, and recovery (Prieto-Sandoval, Jaca, Santos,
& Huulgaard, 2020). Baumgartner, & Ormazabal, 2019).
KAZANCOGLU ET AL. 3

A CE requires a change in the economic and political system, with understanding CE. The government can push firms to adopt CE poli-
such a change involving even inside of individual companies. The CE cies by setting environmental regulations for each industry (Scupola,
is strongly related to environmental sustainability practices of 2003). Also, the government has an impressive role in improving pub-
companies, with activities such as improved energy efficiency, use of lic awareness and knowledge about the principles of CE
renewable energy and waste recovery, and use of recycled or (Mathiyazhagan, Govindan, Haq, & Geng, 2013; van Buren et al., 2016).
renewable materials in raw material supply (Lieder & Rashid, 2016; Thus, the government should integrate CE legal arrangements into its
Moreno, De los Rios, Rowe, & Charnley, 2016). Thus, the adoption of existing environmental regulation and legislation system. These regu-
CE needs changes in the business models of the enterprises (Pieroni, lations and supporting systems need to cover financial initiatives,
McAloone, & Pigosso, 2019). technical support, incentive policies, collaboration platforms, and
In the circular business model, the target of businesses not only guidelines to monitor and audit a transparent structure within the
includes add economic value but also includes social and environmen- supply chain (Lewandowski, 2016).
tal issues to achieve sustainable development. However, the current Several studies emphasized that governments and regional authori-
corporate environmental management policy of many businesses is ties may play a crucial role in setting a framework to regulate, promote,
aimed at reducing the environmental impact of the company in the and monitor the transition of the CE (Galv~ao et al., 2018; Jia, Zuluaga-
short-term (Korhonen, Nuur, Feldmann, & Birkie, 2018; Lozano, 2020; Cardona, Bailey, & Rueda, 2018; Manninen et al., 2018; van Buren et
Robèrt et al., 2002). In this context, companies not only need to man- al., 2016). Governments have a major stimulating role in promoting
age profit but also need to make a balance between competitiveness, firms in the transition towards CE, via supporting them with needed
environment, and social impacts, in the long run (Ormazabal, technology and infrastructure (Geng & Doberstein, 2008; Manninen
Prieto-Sandoval, Puga-Leal, & Jaca, 2018). Therefore, the adoption of et al., 2018), and developing new legislation, standards, and eco-labels
CE within corporate environmental management creates new oppor- (Prieto-Sandoval et al., 2018). Governments can also promote public
tunities and sustainable practices by using wastes as resources and procurement based on circularity, to promote related laws and
offering collaborative production (Baumgartner, 2018). implement circular business activities (Yuan, Bi, & Moriguichi, 2008).
CE is expanding the existing corporate environmental manage- The European Commission decided to develop a roadmap for
ment systems for businesses to create high economic value from their CE. For example, the European Union (EU) regulations defined strict
material life cycles (Bocken, De Pauw, Bakker, & van der rules for the transportation, storage, and treatment of the used tex-
Grinten, 2016; Stahel, 2016). In that sense, businesses need to design tiles as waste, in accordance with the waste management. Also, there
products and services that comply with social and environmental are restrictions on the import of used clothing in many countries in
principles in CE. Therefore, CE supports both internal and inter- textiles. Macrolevel country-based governmental initiatives are rapidly
organizational sustainable management (Korhonen et al., 2018). evolving to consider the necessity of CE adoption (Bonciu, 2014). The
At the microlevel, the company's sustainable CE practices have Dutch government adopted the Waste to Resources (Gr Van Afval
been shaped through environmental regulations and public incentives Naar Grondstof model) to promote a circular production model
(Aranda-Uson et al., 2020; Ghisellini et al., 2016). At the same time, (Leendertse, 2016). Hartley, Santen, and Kirchherr (2020) investigated
the legislative regulations that governments have made for the CE the policy expectations of the CE based on interviews with 47 experts
should not only be related to recycling and waste management but from the EU. According to the results of this research, the following
also be supportive in design, recyclable products monitoring, and issues were expected by the experts: the expansion of the circular
collection, sorting mechanism as every stage of the supply chain (Jia, supply chain, the tax reduction for the products, the free waste trade,
Yin, Chen, & Chen, 2020; Lazarevic & Valve, 2017). the production in the CE in line with the standards and norms, and
increasing the awareness. Besides, facilitating waste trade based on
virtual platforms and eco-industrial parks should be supported by gov-
2.2 | Governmental policy and transition to CE in ernments. Meanwhile, as an example of government action, the Chi-
supply chains nese central government approved a national policy about CE in 2008
(Masi et al., 2018).
The role of the government is critical to enhance the corporate envi- Perry (2012) emphasized that government authorities should
ronmental management. While it is transitioned from linear to CE, work and coordinate with different stakeholders such as consumers,
governmental policies, regulations, and legislations play important retailers, suppliers, and manufacturers to apply CE in supply chains.
role. Governmental actions have been needed in the development of The role of governments encompassed both legislative and multi-
CE practices in emerging economies. stakeholder processes. At the same time, these authorities should set,
Governmental policies, business practices, and consumer behav- coordinate, and regulate the rules among the multiple levels of supply
ior face fundamental changes during transition to the CE; hence, chain parties and competitors. Tsoi (2010) suggested that multina-
appropriate and consistent policies and strategies need to be tional companies (MNCs), nongovernmental organizations (NGOs),
developed (Manninen et al., 2018; van Buren et al., 2016). Braun, and local governments in the region should work together for sustain-
Kleine-Möllhoff, Reichenberger, and Seiter (2018) mentioned that all able business. Kunz, Mayers, and Van Wassenhove (2018) gave exam-
stakeholders should create value via collaboration and a consensus in ples of local authorities such as municipalities that play a central role
4 KAZANCOGLU ET AL.

in organizing and controlling of waste management, recycling activi- especially for small- and medium-sized enterprises, on issues related
ties, and transport in their cities. to waste and water regulations. Jia et al. (2018) described the inade-
Jia et al. (2018) stated that economic incentives to organizations quacy of political support in an emerging economy, Bangladesh.
adopting circular practices may involve subsidies and special exemp- Kok et al. (2013), Dhull and Narwal (2016), and Leendertse (2016)
tions such as tax reduction to ISO 14001 certified companies. Envi- emphasized that lack of government regulations, directives, and gov-
ronmental taxes are environmental tools to support sustainable ernmental guidance impeded the adoption of innovation based on
business (Galv~ao et al., 2018). Companies need to integrate circular CE. To overcome this situation and uncertainty, policymakers should
practices into their environmental management policies to achieve cooperate with all parties of supply chains to create a common vision.
sustainable development goals. Another barrier is the lack of adequate governmental resources for
Dubey, Gunasekaran, Childe, Papadopoulos, and Helo (2019) auditing, regulating, and monitoring firms' circular practices (Azmat &
stated that governments have a significant role as an external driver Ha, 2013). The current legal regulations of the government are based
for achieving sustainability in supply chains. Governmental green pro- on the linear economy, and it constitutes a barrier towards circular
curement and supply programs can also motivate manufacturers to supply chains (Fonseca, Domingues, Pereira, Martins, & Zimon, 2018).
apply CE practices (Jia et al., 2018). At the same time, public procure- Accordingly, the lack of standardized systems for performance evalua-
ment may help to stimulate demand for recycled materials. Mangla tion and ineffective recycling policies under current laws and regula-
et al. (2018) stated that policies covering government procurement tions impede companies to achieve high-quality products within
and material handling processes will be effective in implementing cir- CE. For this reason, appropriate systems should be created to redefine
cular procurement models. The government has the role of being a the performance indicators such as recycling standards in accordance
coordinator, mediator, and facilitator for different parties. At the same with the CE. Existing environmental regulations should not only focus
time, the government needs to establish laws and regulations, develop on recycling policies but also reuse and have difficulty in implementing
economic policies, raise public awareness, and facilitate cooperation the principles of CE (Kane, Bakker, & Balkenende, 2018).
within the supply chain (Lau & Wang, 2009). Aström and Martin (2018) conducted a structured literature
Govindan and Hasanagic (2018) found that governmental actions review study about barriers of CE. In two case studies, they identified
have the greatest impact on CE implementation. This study described and discussed barriers restricting circular practices. They found that
policy-related barriers such as the government's lack of financial sup- there has been a lack of financial justifications as well as procurement
port, training, funding opportunities, incentives, and tax policy for the and outsourcing problems. Braun et al. (2018) conducted an extended
transition from a linear economy to a CE. Stewart, Bey, and Boks (2016) literature review study discussing critical drivers and barriers while
defined four types of legislation and policy barriers. These are involved transforming towards CE in supply chains. Bressanelli, Perona, and
unclear and vague messages about regulation: multiple complex regu- Saccani (2018) identified 24 challenges that may inhibit a supply chain
lations, lack of pressure and lack of control in implementing regula- design for the CE through a systematic literature review. This research
tions, and regulations discouraging innovation. Existing government mentioned that governmental interventions are necessary to enable
policies and regulations are based on a linear economic system and do CE adoption within the supply chain. Su, Heshmati, Geng, and
not contain sufficient information about the circular approach, and this Yu (2013) investigated the indicators, problems, and barriers to imple-
situation may prevent the transition to a CE (Rathinamoorthy, 2019). ment successful CE with a holistic literature review and concluded
Lack of government subsidies and financial incentives prevent that the government does not provide financial supports, taxes, and
companies to have environmental certificates, eco-labels, and training incentives for the adoption of the circular supply chain in China.
(Jia et al., 2018). However, these certifications are useful to imple- Fonseca et al. (2018) carried out research based on a survey of
ment CE and to measure corporate environmental capabilities (Jaeger 99 Portuguese organizations. In a governmental manner, the organiza-
& Upadhyay, 2020; Scarpellini et al., 2020). Depending on the lack of tions highlighted the need for using tax policy to motivate organiza-
legislation in the CE, suppliers can resist change (Azmat & Ha, 2013), tions adjusting CE principles and increasing the governmental
submit misleading documents to obtain certificates, act unethically in initiatives to support CE. Galv~ao et al. (2018) identified the barriers of
production processes such as child labor, and may not act transpar- implementing CE principles as technological, policy and regulatory,
ently in their activities (Vermeulen & Ras, 2006). The control mecha- financial and economic, managerial, performance indicators, customer,
nisms of governments have a transitive effect; initially, the pressure and social and grouped the barriers through content analysis. They
accumulates on producers, and then producers forward the pressure indicated that there is a need to focus on each barrier. Gong, Putnam,
to the suppliers in the supply chain (Seuring & Müller, 2008). You, and Zhao (2020) found that there has been a general lack of gov-
The insufficiency of governmental support systems is another bar- ernmental initiatives for CE implementation.
rier to applying CE. Also, governments are not interested in supporting Zhang et al. (2019) investigated smart waste management barriers
eco-friendly strategies of businesses (Rizos et al., 2016; Su, Heshmati, for the CE in China. The leading finding of this study is regulatory
Geng, & Yu, 2013). Braun et al. (2018) stated that the lack of govern- pressure that is the most significant causal barrier. García-Quevedo
ment support and bureaucracy burden is the barrier for enterprises to et al. (2020) found that the existing regulatory framework and the
implement the CE. Mura, Longo, and Zanni (2020) have highlighted complexity of legal procedures are the most important barriers for
the difficulties related to bureaucracy as a barrier in the CE practices, small- and medium-sized companies in Europe. van Buren et al. (2016)
KAZANCOGLU ET AL. 5

explored barriers in the transition to CE and how public policy over- are currently shaping and leading the development of the textile
comes these barriers in the Dutch logistics industry. According to this industry.
study, the short- and long-term policies of the government have an The barriers list is discussed with these experts through inter-
important role to play in institutional and economic barriers. Pan views. Six barriers are removed or merged with other barriers. These
et al. (2015) evaluated several technologies for waste to energy pro- barriers are “Ownership issues for taking advantages of reuse oppor-
cess. In this study, the government's vision and reluctance to take ini- tunities of CE in the supply chain (Govindan & Hasanagic, 2018),” “ser-
tiative were emphasized as the most important challenge to vice providers cannot legally retain ownership of a sold product which
implement the waste to the energy supply chain. makes it difficult to implement CE (Govindan & Hasanagic, 2018),”
Pheifer (2017) identified the microbarrier, mesobarrier, and mac- “existing laws in waste management are not supporting CE (Govindan
robarrier and opportunities encountered in the transition from the lin- & Hasanagic, 2018; Li & Yu, 2011),” “lack of external sustainability
ear economy to the CE by using the interview method. The most audits for contactors (Dhillon, Bentley, & Bukoye, 2016),” “pressure
mentioned barriers in the negotiations are product design, lack of for a lower price (Dhull & Narwal, 2016),” and “difficulties in esta-
reverse supply chain infrastructure, lack of corporate culture, lack of blishing the correct price of products in the supply chain (Lieder &
data, lack of adequate finance, and current government legislation. Rashid, 2016).” As a result, 19 policy-related barriers were finalized.
Riisgaard, Mosgaard, and Zacho (2016) identified another legal barrier Table 1 presents the policy-related barriers to CE for improving the
that consists of the long warranty period for the products that legally corporate environmental management in supply chains.
prevents the use of the used parts for repairing smartphones in
Denmark with 36 interviews.
Given this, governmental policies are significant in managing the 4 | METHODOLOGY
corporate environmental performance of businesses in a CE. On the
other hand, the government also has a significant impact on overcom- Previous studies were investigated, and policy-related barriers for the
ing the barriers related to the adoption of CE in supply chains. CE in the textile industry are identified. Afterward, a group of experts
Therefore, this research is one of the initial efforts evaluating the composed of academia and industry is formed to validate the identi-
policy-related barriers for CE to enhance corporate environmental fied policy-related barriers. The expert opinions were taken by inter-
management in supply chains. views. Then, the data collection stage has started. In this stage, the
second group of experts, referred to as company experts, have been
formed. This is followed by a data collection stage where the data
3 | P O L I C Y - R E L A T E D B A R R I E R S I N CE TO were collected from company experts using pairwise comparisons.
IMPROVE CORPORATE ENVIRONMENTAL Next, fuzzy DEMATEL method was applied. Finally, the results of the
MANAGEMENT IN SUPPLY CHAINS proposed framework are discussed, and implications were proposed.
Figure 1 shows the proposed framework for this research.
The relevant literature for this work was investigated using keywords
such as “CE barriers,” “circular supply chain barriers,” “green supply
chain barriers,” and “sustainable supply chain barriers.” The databases 4.1 | Fuzzy DEMATEL
(Google Scholar, Emerald, ScienceDirect, WoS, and EBSCO) were
explored to search the related research articles. These barriers have DEMATEL method consists of matrices and digraphs to categorize the
been determined as policy-related barriers because they are related to relevant factors as a causal factor, or effect factor, and specify the inter-
governmental regulations, legislation and ruling, and policy. Then, the dependencies among factors. The reason to hire fuzzy logic is its ability
first barrier list was identified with 25 barriers through the literature to overcome the subjectivity and vagueness of human judgment when
review. These barriers were then validated with the inputs of three dealing with uncertainties in the decision-making process. The reason
academics and three industry experts. The academic experts are com- to select DEMATEL is its advantages in determining the interrelation-
posed of university professors from textile engineering, supply chain ships among criteria to provide a better understanding of the elements
management, and logistics, law, and public policy. The academician of the system (Gabus & Fontela, 1972, 1973). The major advantage of
who is working on law and public policy is also the consultant in the DEMATEL for barrier analysis over other methods such as ISM and
Ministry of Industry. The industrial experts are three supply chain AHP is that it can produce reliable results with minimum data and
experts from the textile sector. These experts are the supply chain define a flexible pattern (Yang & John, 2003). It is a widely used tech-
managers of the three companies with the largest volumes of textile nique for barrier studies to determine causal relationships (Farooque et
export in the Aegean Region. One of the industrial experts is also a al., 2019; Kaur et al., 2018). Also, fuzzy DEMATEL is useful in dealing
member of the executive board of the Clothing Manufacturers' with human bias and ambiguity involved in studying the interrelation-
Association. Two experts are also the executive board of Aegean ships between barriers (Mangla, Kumar, & Barua, 2016). Therefore, in
Textiles and Raw Materials Exporters' Associations, which has a this study, the DEMATEL technique is integrated with fuzzy logic to uti-
semigovernmental structure. These experts have business experience lize the advantages of both in a decision-making process. There have
of more than 15 years. The associations that have been considered been a set of factors, C = {C1, C2, …, Cn}, in the DEMATEL method. The
6 KAZANCOGLU ET AL.

TABLE 1 Policy-related barriers for CE to improve corporate environmental management in supply chains

Barrier list Description Literature

C1—Financial incentives of the Environmental taxes, tax exemptions, low- Masi et al. (2018), Kok et al. (2013), Dhull
governments are prepared towards the interest rates, loans and credit, and and Narwal (2016), and Jakhar, Mangla,
linear economy funding options are financial incentives Luthra, and Kusi-Sarpong (2019)
for successfully implementing CE and
inclusion in the legislation. The lack of
funding options, tax rebates, and
complimentary taxation norms may
hinder the implementation of circular
business models.
C2—Lack of government support for The government regulations should adopt Dhull and Narwal (2016), Luthra, Mangla,
environmentally friendly policies eco-friendly policies and do not provide Xu, and Diabat (2016), and Kaur, Sidhu,
specific benefits; therefore, the existence Awasthi, Chauhan, and Goyal (2018)
of environmentally friendly policies will
support and enhance the transition to a
circular economy.
C3—Lack of policies towards sustainable The government's ability to encourage Govindan, Kaliyan, Kannan, and Haq (2014),
and circular public procurement green products in the CE is possible Luthra et al. (2016), and Delmonico,
through green public procurement. In this Santos, Pinheiro, Castro, and
way, it contributes to the closed energy Souza (2018)
and material cycles in the supply chain
and prevents environmental impact and
waste generation during the product life
cycle. However, most public institutions
have limited sustainable and circular
public procurement incentives.
C4—Lack of legislation for efficient CE. Legal legislations such as obligations and Rossi, Germani, and Zamagni (2016) and
norms must be clear, formal, coherent, Kaur et al. (2018)
compulsory, and necessary to adopt CE.
The lack of norms and obligations to
respect or the lack of specific compulsory
regulations may prevent an efficient
transformation to circular business
models.
C5—Concerns regarding liabilities, The government should regulate the Kok et al. (2013), Kaur et al. (2018), and
responsibilities, and ownership on governance problem, such as Masi et al. (2018)
governance responsibilities and ownership, according
to the value and benefit in the value
chain when the circular economy model
is adopted. These problems may inhibit
the implementation of CE.
C6—Inadequate incentives discourage The type of incentives should not only be Su, Heshmati, Geng, and Yu (2013) and
enterprises to apply CE in the supply limited with economics but also embrace Govindan and Hasanagic (2018)
chain incentives towards know-how,
technology, and education of human
resources. Thus, a weak or limited type of
incentives makes it problematic for
enterprises to move from linear to CE.
C7—Lack of standards for refurbished Because the government does not define a Govindan and Hasanagic (2018) and van
products standard for refurbished products, there Weelden, Mugge, and Bakker (2016)
is no consistency in quality. This may
even inhibit the marketing of refurbished
products.
C8—Lack of effective recycling policies to Recycling policies are not sufficient and Kok et al. (2013), Masi et al. (2018), and
achieve quality in waste management effective to ensure high quality in Govindan and Hasanagic (2018)
recycling and waste management. Thus,
the reputation of recycled products can
be low on behalf of consumers.
KAZANCOGLU ET AL. 7

TABLE 1 (Continued)

Barrier list Description Literature

C9—Lack of implementation laws for the Most of the implementation laws on CE are Su, Heshmati, Geng, and Yu (2013), Li and
CE within the supply chain subject to personal opinions than based Yu (2011), and Govindan and
on technical expertise and there is no Hasanagic (2018)
mechanism to evaluate how much the
law is enforced.
C10—Existing legislation does not The existing environmental laws are Li and Yu (2011) and Govindan and
support the CE in waste management inadequate to implement CE within waste Hasanagic (2018)
management such as collection,
classification, and recycling.
C11—Competition laws prevent Competition laws are based on a linear Govindan et al. (2014), Kok et al. (2013),
cooperation within the supply chain economy, and they do not allow and Masi et al. (2018)
cooperation within the supply chain
especially for the design of reverse
logistics and products.
C12—Government's vague vision in CE The government's ambiguous vision about Pan et al. (2015) and Govindan and
implementation the CE blurs the objectives and indicators Hasanagic (2018)
in the supply chain. Thus, the national
vision in terms of goals and indicators
become vague.
C13—Lack of standards for assessing the Governments do not set common standards Govindan and Hasanagic (2018), Masi
CE performance within the supply chain not only to evaluate company specific but et al. (2018), Kok et al. (2013), Su,
also to supply chain performance towards Heshmati, Geng, and Yu (2013), and
CE. Because regulation and Bressanelli et al. (2018)
circumstances are internationally
unbalanced, the set of common standards
will be lacking soon.
C14—Lack of recycling and recovery For reverse logistics, which is the most Bicket et al. (2014)
infrastructure in reverse logistics significant component of the CE,
activities infrastructure is required to enable the
effective collection of used products. The
most important barrier in waste
management is the lack of infrastructure
in waste collection and processing. For
this purpose, tools such as landfill tax,
producer responsibility, and retrieval
plans should be implemented in reverse
logistics.
C15—Circular economy principles are not Because the government determines the Masi et al. (2018), Kok et al. (2013), and
harmonized with policies on innovation environmental regulations for the Dhull and Narwal (2016)
industry, it can promote or deter the
adoption of innovation. There is a lack of
vision in the government towards a
transition to the circular economy and its
integration with innovation.
C16—Failure to raise awareness in the The government may play an active role in Su, Heshmati, Geng, and Yu (2013), van
society regarding circular economy such raising public awareness. The government Weelden et al. (2016), Dhull and
as reuse/recycle/remanufactured should make attempts to ensure that Narwal (2016), Kaur et al. (2018), and
products customers are aware of green products Govindan and Hasanagic (2018)
and CE. In this way, consumers will begin
to learn about the effects of industries on
the environment. However, because of
the inadequate awareness for the CE, the
customers will be less demanding for
environmentally sensitive products and
do not segregate waste.

(Continues)
8 KAZANCOGLU ET AL.

TABLE 1 (Continued)

Barrier list Description Literature

C17—Lack of mandatory requirements and The government should set mandatory Rossi et al. (2016), Ghisellini et al. (2016),
responsibilities for manufacturers/ requirements and responsibilities for and Moktadir et al. (2018)
suppliers for the CE companies to regulate the circular
transition. In that sense, the conformance
of companies towards the requirements
and responsibilities of CE should be
certified and should be controlled by
government authorities.
C18—Perception of bureaucracy towards To elaborate unnecessary and inefficient Rossi et al. (2016), Bet et al. (2018), and
CE bureaucratic procedures, it should be Mura et al. (2020)
easier to define the product, waste
regulations, and the implementation of
laws.
C19—Lack of attitude and awareness The awareness and knowledge of the Xue et al. (2010) and Masi et al. (2018)
about CE in government institutions government officials are strong drivers to
adapt to the CE. Government officials
should be more aware and
knowledgeable about the CE.

Abbreviation: CE, circular economy.

FIGURE 1 Proposed framework

KAZANCOGLU ET AL. 9

relevant criteria are compared pairwise by experts to symbolize the X

n
R= tij : ð6Þ
mathematical relations (Wu & Lee, 2007). Because of the vagueness i=1
and subjectivity of human judgment when dealing with uncertainties in
the decision-making process, triangular fuzzy numbers (lij, mij, and rij) The data set is graphed to generate a cause–effect diagram. Hori-
and corresponding linguistic terms identifying the degree of effect of zontal axis shows (D + R) values, which refer to the importance level.
each criterion over others are used. Table 2 shows fuzzy linguistic The vertical axis represents (D − R) values, which classifies each crite-
scales. rion as either cause or effect group. If the value of (D − R) is positive,
The linguistic terms are transferred into fuzzy numbers. Then, the then the factor is referred to as cause factor, and if negative, as effect
average of pairwise comparisons is defuzzified into crisp values using factor (Wu & Lee, 2007).
Converting Fuzzy Data into Crisp Scores (CFCS), which was proposed
by Opricovic and Tzeng (2003).
After the defuzzification process, solution steps are applied step- 5 | AN INDUSTRIAL CASE STUDY
by-step as follows:
This paper focuses on the application, which was conducted in an
Step 1: The average of pairwise comparisons constitute nxn direct apparel firm located in Izmir, Turkey. The reason to select a firm in
relation matrix, Z. Zij represents the degree of the influence of ith fac- the apparel industry is the criticality of the environmental impact
tor to jth factor, that is, Z = [Zij]n × n. because of the resource used and contribution to the total waste. In
Step 2: Using Formulas 1 and 2, the normalized direct relation matrix, the United Kingdom, Netherlands, and Scandinavian countries, it is
X, that is, X = [Xij]n × n, and 0 ≤ Xij ≤ 1 is found. predicted that 61% of the garments become wastes, 84% of the
remaining can be reused, and 16% of the remaining can be recycled
(FFACT, 2014), which means that the environmental impacts of the
X = s
Z, ð1Þ apparel industry should not be neglected, especially in terms of cli-
mate change. On the other hand, Turkey is the sixth largest pro-
1 ducer for the apparel industry worldwide and the largest textile
s= , i, j = 1,2, …, n: ð2Þ
max P
n
1≤i≤n zij manufacturer in Europe. In 2017, Turkey is stated as the fifth larg-
j=1
est exporter for textile products. Approximately one million people
are merchandising, and retail is included. The industry has the
greatest foreign trade surplus and is the leading industry in the
Step 3: Using Formula 3, total relation matrix, T, is found. I symbolize gross domestic product and domestic input use. The sector leads
the identity matrix. with high-tech use, flexible production capability, and qualified
workforce (Textile Focus, 2019).
The firm is a global company operating in more than 100 countries
T = XðI −X Þ −1 : ð3Þ with four manufacturing facilities and yielding around 3.2$ billion in
sales. They may be remarked as a part of the circular production sys-
tem because they used padding made from a minimum of 60%
Step 4: Using Formulas 4–6, row totals (D), and column totals (R) of recycled materials for all its clothing lines and accessories. The com-
T are found, respectively. pany has its origins in Germany and located in Turkey as a foreign
direct investment. There have been some differences between the
company's activities in two countries. The home country, Germany,
T = tij , i, j = 1, 2,…, n, ð4Þ has better adopted into CE; however, the host country, Turkey, has
been in the introduction phase. There have been some policy-related
X
n
barriers in Turkey, which makes the adoption process harder.
D= tij , ð5Þ
j=1 Hervani, Helms, and Sarkis (2005) pointed out the fact that
because the application and the scales are specific to the organiza-
tions, there is no generally applicable tool or approach for generalizing
TABLE 2 Fuzzy linguistic scale the results. Consistent with this, the proposed framework including
Linguistic terms Triangular fuzzy numbers 19 policy-related barriers may be generalized and used in different

Very high influence (VH) (0.75, 1.0, 1.0)

applications. However, the application is specific to the company,
which means that the results may be different when applied in
High influence (H) (0.5, 0.75, 1.0)
another company. Also, it may not be practical to use a large sample
Low influence (L) (0.25, 0.5, 0.75)
size because of limited expertise. Some published studies collected
Very low influence (VL) (0, 0.25, 0.5)
data from four or fewer experts (Xia, Govindan, & Zhu, 2015). Besides,
No influence (No) (0, 0, 0.25)
in their research, Lin (2013) conducted DEMATEL analysis by
10 KAZANCOGLU ET AL.

collecting data from four, three, and eight experts, respectively. This which refer to the importance level. The vertical axis represents (D − R)
means the DEMATEL method can be applied with a limited amount of values, which classifies each criterion as either cause or effect group. If
data (Sivakumar, Jeyapaul, Vimal, & Ravi, 2018), and the results were the value of (D − R) is positive, then the factor is referred to as cause
specific to the organization. factor, and if negative, as effect factor (Wu & Lee, 2007) (Figure 2).
Fuzzy DEMATEL method involves pairwise comparisons. The According to the prominence causal diagram in Figure 2:
pairwise comparisons were conducted with the consent of the Board of
Directors. Five authorities carried out pairwise comparisons: the supply 1. The cause group consists of financial incentives of the govern-
chain manager, the green logistics team leader, the vice supply chain ments that are prepared towards the linear economy (C1), lack of
manager, the sustainability manager, and the member of the executive government support for environmentally friendly policies (C2), lack
board, who are responsible for sustainable supply chain activities within of legislation for efficient CE (C4), concerns regarding liabilities,
the company. The authorities have been determined as experts because responsibilities, and ownership on governance (C5), existing legisla-
of their experience in the field (20, 14, 16, 12, and 15 years, respec- tion does not support the CE in waste management (C10), govern-
tively). Table 3 shows information about company experts. ment's vague vision in CE implementation of the CE in the supply
Table 4 shows a pairwise comparison matrix for one of the com- chain (C12), lack of standards for assessing the CE performance
pany experts. Table 5 presents the direct relation matrix, X, and finally, within the supply chain (C13), failure to raise awareness in the
Table 6 shows the total relation matrix. society regarding circular economies such as reuse/recycle/
Using Equations 4–6, row totals (D) and column totals (R) of total remanufactured products (C16), perception of bureaucracy
relation matrix were found, respectively. The data set is graphed to towards CE (C18), and lack of attitude and awareness about CE in
generate a cause–effect diagram. Horizontal axis shows (D + R) values, government institutions (C19). Among these, lack of attitude and

TABLE 3 Information about company experts

Expertise Department Number of years of experience in the company Total work experience in years Gender
Supply chain manager Supply chain 14 20 Male
Green logistics team leader Supply chain 12 14 Female
Vice supply chain manager Supply chain 11 16 Male
Sustainability manager Supply chain 9 12 Female
Member of the executive board Management 15 15 Male

TABLE 4 Pairwise comparison matrix of one of the company experts

C1 C2 C3 C4 C5 C6 C7 C8 C9 C10 C11 C12 C13 C14 C15 C16 C17 C18 C19
C1 NO VH VH L VL VH H VH H VH VL VL VL L H L H H H
C2 VL NO VH VH H VH H VH VH VH L H NO H H H VH H H
C3 L VH NO L VH VH VH VH L VL VL L NO L H L H L L
C4 VH VH VH NO VH VH H VH VH VH L H L H H H VH L L
C5 L L L H NO L H H L VL L L L L H L L VL VL
C6 VL NO VL L VL NO VL L VH VL L H VL H H H H VL L
C7 NO VL L H H VL NO L L NO VL L VL L L VL L VL VL
C8 VL VL VL H VL L H NO H H VL L VL VL L L L VL VL
C9 VL VH L VL VL L H H NO VL L H VL H H H H H H
C10 H L L H VL H H VH VH NO L VH L H VH VH VH VH VH
C11 VL VL H H NO L L L L VL NO VL NO H L L L H H
C12 VH VH H VH VL H H VH H H H NO VL H H VH H VH VH
C13 VL VL VL L NO H L L L VL L VL NO L VH L H L VL
C14 VL L VL VL NO L H H VH L H L L NO H L H L L
C15 VL VL L L L L H VL L VL L VL VL VL NO L L VL VL
C16 VH VH H H H H VH H VH H L VH VL L H NO H H H
C17 H L H H VH VH H VH VH H L H H L H L NO L L
C18 VH VH VH VH H VH H H VH VH L H L H H H H NO VH
C19 VH VH VH VH H VH H H VH VH L H L H H VH H VH NO

Abbreviations: H, high influence; L, low influence; NO, no influence; VH, very high influence; VL, very low influence.
 KAZANCOGLU ET AL.

TABLE 5 Direct relation matrix, X

C1 C2 C3 C4 C5 C6 C7 C8 C9 C10 C11 C12 C13 C14 C15 C16 C17 C18 C19
C1 0.00 0.06 0.07 0.05 0.03 0.06 0.05 0.07 0.05 0.06 0.04 0.04 0.04 0.04 0.04 0.05 0.05 0.04 0.04
C2 0.04 0.00 0.07 0.07 0.05 0.06 0.05 0.06 0.07 0.07 0.03 0.04 0.01 0.05 0.05 0.04 0.06 0.04 0.04
C3 0.05 0.07 0.00 0.04 0.06 0.07 0.06 0.06 0.05 0.04 0.04 0.04 0.01 0.05 0.04 0.04 0.05 0.03 0.04
C4 0.07 0.07 0.06 0.00 0.07 0.07 0.05 0.07 0.07 0.07 0.04 0.04 0.04 0.05 0.05 0.04 0.07 0.05 0.04
C5 0.04 0.04 0.04 0.05 0.00 0.04 0.05 0.05 0.04 0.04 0.05 0.04 0.04 0.04 0.05 0.04 0.05 0.04 0.04
C6 0.04 0.01 0.04 0.05 0.04 0.00 0.04 0.04 0.06 0.04 0.04 0.04 0.04 0.05 0.05 0.04 0.05 0.04 0.04
C7 0.02 0.04 0.04 0.05 0.05 0.04 0.00 0.04 0.05 0.01 0.03 0.04 0.04 0.04 0.04 0.03 0.05 0.03 0.03
C8 0.04 0.04 0.04 0.05 0.04 0.04 0.04 0.00 0.04 0.05 0.03 0.04 0.04 0.04 0.04 0.04 0.05 0.03 0.03
C9 0.04 0.07 0.05 0.04 0.04 0.04 0.05 0.04 0.00 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.05 0.04 0.04
C10 0.05 0.05 0.04 0.05 0.04 0.04 0.05 0.07 0.06 0.00 0.04 0.06 0.04 0.05 0.06 0.05 0.06 0.06 0.06
C11 0.04 0.03 0.05 0.04 0.02 0.04 0.03 0.04 0.04 0.04 0.00 0.04 0.00 0.04 0.04 0.04 0.05 0.05 0.04
C12 0.06 0.06 0.05 0.06 0.03 0.04 0.04 0.06 0.04 0.05 0.05 0.00 0.04 0.04 0.04 0.06 0.04 0.06 0.06
C13 0.04 0.04 0.04 0.04 0.01 0.04 0.05 0.04 0.05 0.04 0.03 0.04 0.00 0.05 0.06 0.05 0.05 0.03 0.03
C14 0.04 0.04 0.04 0.04 0.01 0.05 0.05 0.05 0.06 0.05 0.04 0.03 0.05 0.00 0.05 0.03 0.05 0.04 0.04
C15 0.04 0.04 0.04 0.04 0.05 0.05 0.04 0.03 0.04 0.04 0.04 0.03 0.04 0.04 0.00 0.05 0.04 0.03 0.03
C16 0.07 0.06 0.04 0.04 0.04 0.04 0.06 0.04 0.05 0.04 0.04 0.06 0.04 0.03 0.05 0.00 0.05 0.04 0.05
C17 0.05 0.04 0.05 0.05 0.07 0.07 0.05 0.07 0.07 0.04 0.05 0.04 0.05 0.05 0.05 0.04 0.00 0.05 0.03
C18 0.06 0.05 0.05 0.07 0.05 0.06 0.04 0.04 0.05 0.06 0.05 0.04 0.03 0.04 0.04 0.04 0.05 0.00 0.07
C19 0.06 0.06 0.06 0.06 0.04 0.06 0.04 0.04 0.05 0.06 0.03 0.04 0.03 0.04 0.04 0.07 0.04 0.07 0.00
11
 12

TABLE 6 Total relation matrix, T

T C1 C2 C3 C4 C5 C6 C7 C8 C9 C10 C11 C12 C13 C14 C15 C16 C17 C18 C19
C1 0.21 0.27 0.28 0.27 0.22 0.28 0.26 0.29 0.28 0.26 0.22 0.22 0.20 0.24 0.25 0.24 0.27 0.22 0.22
C2 0.24 0.22 0.28 0.29 0.24 0.29 0.26 0.29 0.30 0.27 0.21 0.23 0.17 0.25 0.25 0.23 0.28 0.22 0.23
C3 0.24 0.27 0.21 0.26 0.24 0.28 0.26 0.27 0.27 0.23 0.21 0.22 0.17 0.23 0.24 0.22 0.26 0.21 0.21
C4 0.30 0.30 0.31 0.26 0.28 0.32 0.28 0.32 0.33 0.29 0.24 0.26 0.22 0.27 0.28 0.26 0.32 0.25 0.24
C5 0.23 0.23 0.24 0.25 0.17 0.25 0.24 0.25 0.25 0.22 0.21 0.20 0.19 0.22 0.23 0.21 0.25 0.20 0.20
C6 0.21 0.19 0.23 0.24 0.20 0.19 0.22 0.23 0.25 0.21 0.19 0.20 0.17 0.22 0.22 0.20 0.24 0.19 0.19
C7 0.18 0.21 0.21 0.22 0.20 0.21 0.16 0.21 0.22 0.17 0.17 0.18 0.17 0.19 0.20 0.18 0.22 0.17 0.17
C8 0.21 0.22 0.22 0.24 0.20 0.23 0.22 0.19 0.24 0.22 0.18 0.20 0.17 0.20 0.21 0.20 0.23 0.18 0.18
C9 0.23 0.25 0.24 0.24 0.21 0.24 0.24 0.24 0.21 0.22 0.20 0.21 0.19 0.22 0.22 0.21 0.25 0.20 0.20
C10 0.26 0.27 0.27 0.29 0.23 0.28 0.26 0.30 0.30 0.22 0.23 0.26 0.21 0.26 0.28 0.25 0.29 0.25 0.24
C11 0.20 0.19 0.21 0.22 0.16 0.21 0.19 0.21 0.21 0.20 0.14 0.19 0.13 0.19 0.20 0.19 0.22 0.19 0.18
C12 0.26 0.26 0.26 0.28 0.22 0.26 0.24 0.28 0.27 0.25 0.22 0.19 0.19 0.23 0.24 0.24 0.26 0.23 0.23
C13 0.21 0.21 0.22 0.23 0.17 0.23 0.22 0.22 0.24 0.20 0.18 0.19 0.13 0.21 0.23 0.20 0.23 0.18 0.18
C14 0.21 0.23 0.23 0.24 0.18 0.24 0.23 0.24 0.26 0.22 0.19 0.19 0.18 0.17 0.23 0.20 0.24 0.19 0.19
C15 0.20 0.21 0.22 0.23 0.20 0.23 0.21 0.22 0.23 0.20 0.19 0.19 0.17 0.20 0.17 0.20 0.22 0.18 0.18
C16 0.26 0.26 0.24 0.26 0.22 0.25 0.25 0.25 0.27 0.23 0.21 0.23 0.19 0.22 0.24 0.19 0.26 0.21 0.22
C17 0.25 0.25 0.27 0.28 0.25 0.29 0.26 0.29 0.30 0.25 0.23 0.23 0.21 0.25 0.26 0.24 0.23 0.23 0.22
C18 0.26 0.26 0.26 0.29 0.23 0.28 0.24 0.26 0.28 0.25 0.22 0.23 0.19 0.24 0.24 0.23 0.27 0.19 0.24
C19 0.26 0.27 0.27 0.28 0.23 0.28 0.24 0.26 0.28 0.26 0.21 0.23 0.19 0.24 0.24 0.25 0.26 0.25 0.18
KAZANCOGLU ET AL.
KAZANCOGLU ET AL. 13

FIGURE 2 Prominence causal diagram

awareness about CE in government institutions (C19), perception To validate the findings, an in-depth interview is conducted with
of bureaucracy towards CE (C18), and existing legislation that does the same company experts who were involved in sustainable supply
not support the CE in waste management (C10) are mostly chain operations to figure out whether the results are in accordance
influencing barriers. with their current problems. The findings of this study were found in
2. The effect group consist of lack of policies towards sustainable line with the expectation of the company experts. Sections 6 and 7
and circular public procurement (C3), inadequate incentives dis- were addressed discussions and implications.
courages enterprises to apply CE in the supply chain (C6), lack of
standards for refurbished products (C7), lack of effective recycling
policies to achieve quality in waste management (C8), lack of 6 | DI SCU SSIONS
implementation laws for the CE within the supply chain (C9), com-
petition laws prevent cooperation within the supply chain (C11), According to the findings of the study, discussions, and implications
lack of recycling and recovery infrastructure in reverse logistics were developed based on the most important, mostly influencing,
activities (C14), and CE principles that are not harmonized with and mostly influenced barriers. The legislation is gaining an important
policies on innovation (C15). Among these, lack of effective role as it becomes more stringent for sustainability within corporate
recycling policies to achieve quality in waste management (C8), environmental management. Lack of legislation for efficient CE
lack of standards for refurbished products (C7), and inadequate (C4) is revealed as the most important barrier because it has the
incentives discourage enterprises to apply CE in the supply chain most significant relationship among all factors. This is in parallel with
(C6) are mostly influenced barriers. the findings of Masi et al. (2018), Govindan and Hasanagic (2018),
3. Lack of mandatory requirements and responsibilities for manufac- and Mangla et al. (2018), where the significant barrier to the transi-
turers/suppliers for the CE (C17) is located on X-axis; therefore, it tion of a CE is stated as insufficient environmental laws and regula-
cannot be categorized in cause or effect groups. tions. Similarly, Pheifer (2017) stated that the current government
4. Lack of legislation for efficient CE (C4) is revealed as the most legislation system is designed for a linear economy. Especially, lack
important barrier because it has the most significant relationship of a concrete, consistent, and rigid legal framework prevents SMEs
among all factors. Lack of mandatory requirements and responsi- from engaging in CE activities (Rizos et al., 2016) and implementation
bilities for manufacturers/suppliers for the CE (C17) and lack of of corporate environmental management practices.
government support for environmentally friendly policies (C2) are Lack of mandatory requirements and responsibilities for manufac-
the second and third most important barriers. turers/suppliers for the CE (C17) and lack of government support
14 KAZANCOGLU ET AL.

for environmentally friendly policies (C2) are the second and for enhancing corporate environmental performance (Dahan, Doh,
third most important barriers, respectively. Similarly, Govindan and & Teegen, 2010). Firms declared that they need guidance and sup-
Hasanagic (2018) highlighted that governmental regulation is the main port from governmental and NGOs especially to guarantee the
factor influencing a corporate environmental management behavior, traceability and transparency with the suppliers (Perez-Aleman &
such as reducing waste, supporting cleaner production, consumption, Sandilands, 2008). As suggested by Bloom (2015), governmental
and end of life management. The government can guide, encourage, and NGOs may design incentives and unique rewards for success-
and force producers to take on environmental responsibility policies ful models and examples to provide and disseminate the adoption
(Aström & Martin, 2018). Besides, it is stated that the government to CE among the suppliers. Hence, “inadequate incentives
needs central planning and strong legislation to promote and imple- discourage enterprises to apply CE in the supply chain (C6)” was
ment circular economic principles (Abubakar, 2018). Govindan found as the most influenced barrier. Increasing the scope and
et al. (2014) found that the lack of governmental support to adopt envi- context of such incentives and rewards will act as a catalyst in
ronmentally friendly policies as one of the most important barriers to transition to CE as well as actions regarding climate change and
the implementation of green supply chain management. sustainability.
Lack of attitude and awareness about CE in government institu-
tions (C19) is the most influencing factor, located at the top of the
Cause Group. Bet et al. (2018) also mentioned that the lack of regula- 7.2 | Improving communication among
tion or policy for CE depends on the insufficiency of government stakeholders
institutions in their knowledge and awareness of CE. In this context,
the level of knowledge and awareness of consumers about CE Khan and Nicholson (2014) revealed that communication is a key fac-
develops depending on the level of awareness and knowledge of the tor to sustain relationships among stakeholders in the supply chains.
government and its institutions. As a result, the government can In line with this, van Hoof and Thiell (2015) suggested several differ-
develop infrastructure for companies and create awareness for cus- ent methods and tools such as compliance days, meetings with sup-
tomers to emphasize the importance of CE. pliers, personal visits, and use of intranet and e-communication
Lack of effective recycling policies to achieve quality in waste systems, to keep an effective communication. Hence, central and local
management (C8) is the most influenced barrier, located at the bot- government needs to keep healthy communication with all parties of
tom of the effect group. The government may force companies to the circular supply chain to enhance corporate environmental perfor-
take measures to collect products or wastes from customers by mance. This is in parallel to the following barriers: “lack of legislation
reversing material flow in reverse logistics (Harrington, 2006). The for efficient CE (C4)” and “lack of mandatory requirements and
fact that a government authority does not enact legislation responsibilities for manufacturers/suppliers for the CE (C17).”
supporting reverse logistics as a voluntary initiative is the biggest
barrier in developing the sector (Aurdahl, 2016). While Aurdahl
(2016) stated that the significant barrier to the adoption of reverse 7.3 | The government's perception of CE and
logistics is the lack of appropriate legislation, Agyemang et al. (2019) current linear economy
revealed that one of the most important barriers in the successful
transition of enterprises to CE is insufficient government policies Two most influencing barriers are “perception of bureaucracy towards
and regulations related to the collection and processing of recycla- CE (C18)” and “lack of attitude and awareness about CE in govern-
ble materials and products. Uncertainty in current regulation and ment institutions (C19),” respectively. The current economies and leg-
legislation can make it complicated to identify waste and use valu- islations are based on linear economies. The reason underneath this
able resources placed in the waste stream (Korhonen et al., 2018). situation is that the government still lacks the urgency to adopt
CE. The government should change the way they perceive the eco-
nomic system and transform their vision from linear to CE. Therefore,
7 | RESEARCH IMPLICATIONS the government should understand the differences between circular
and linear supply chains and transform their visions from linearity
In this section, managerial implications for managers and policymakers to circularity.
for corporate environmental management are developed.

7.4 | Cooperation with NGOs and civil actions

7.1 | Incentives and unique rewards
In developed countries, in addition to the central and local govern-
The governments should behave as a mandatory and voluntary ments as the regulatory institutions, NGOs have an important power
body, bridging the stakeholders and facilitating mechanisms for sus- and role to convince firms to act in line with sustainability principles
tainable and circular supply chains (Perry, 2012). Cooperatively, for corporate environmental management (Distelhorst, Locke, Pal, &
firms need support and assistance from governmental and NGOs Samel, 2015). Thus, the universities, NGOs, and other civil actions
KAZANCOGLU ET AL. 15

have an important duty to act as a pressure group in emerging econo- the transformation of the legislations from linearity to circularity and
mies because they will work on convincing both firms within the sup- thus can be contributed to the “lack of legislation for efficient CE
ply chains and the government at the same time. They make take (C4),” which was the most important barrier found in this study.
roles even in lobbying. The conferences and symposiums may have a
significant contribution to the promotion of CE and its effects on sup-
ply chains. All these activities may contribute to the two most 7.8 | Awareness of bureaucracy and government
influencing barriers based on our results: “perception of bureaucracy officials
towards CE (C18)” and “lack of awareness and attitude about CE in
government institutions (C19).” Such cooperation is mandatory not The second most influencing barrier was “lack of awareness and atti-
only in transition to CE but also to deal with climate change and to tude about CE in government institutions (C19).” Xue et al. (2010)
decrease greenhouse gas emissions. mentioned that government officials could gain CE knowledge via
awareness-raising activities like workshops, newsletters, TV, and other
media, to reach a higher awareness level of CE. Their study empha-
7.5 | The vision of government towards circular sized that it is critical to make government officials more aware of
principles their responsibilities both for the preparation and for application of
CE for corporate environmental management schemes underlying the
The government should not limit their actions only with recycling but public policy. Therefore, increasing the awareness of state officials on
encompass to reduction, reuse, redesign, remanufacture, and recover, topics such as CE, climate change and carbon emissions will enable
as implied by Govindan and Hasanagic (2018), who claimed 6R princi- governments to achieve sustainability goals.
ples had presented better results throughout the world in terms of To sum up, governments' role should not only be limited with leg-
corporate environmental management. In these cases, legal owner- islation and regulations but also act as the motivator and supporter
ship, collection, and other related issues should be clarified. Hence, through establishing standards, infrastructural investments, and incen-
the government should also prepare necessary and related legislation tives for the transition to CE for enhanced corporate environmental
regarding refurbishment, remanufacture, and reuse. The universities management. Also, legal arrangements must be clear, formal, coher-
and research institutions should emphasize the scope of corporate ent, and compulsory to achieve higher corporate environmental
environmental management and circular supply chains. The proposed performance levels.
scope envision will help to deal with the second and third most
influenced barriers according to in the study, which were “lack of stan-
dards for refurbished products (C7)” and “lack of effective recycling 8 | CONC LU SION
policies to achieve quality in waste management (C8),” respectively.
The transition to CE creates value through the closed-loop systems,
reverse logistics, eco-design, product life cycle management, clean
7.6 | The circular public procurement production, and climate-neutral economy. However, there are several
types of barriers that impede companies in transition to the CE. The
The third most important barrier was “lack of government support for policy-related barriers are one of these important categories that need
environmentally-friendly policies (C2).” Thus, public procurements to be investigated. Thus, this study aims to close these gaps by
should be based on CE and principles of corporate environmental sus- depicting policy-related barriers impeding companies in the transition
tainability. The public bids or procurements should contain criteria to the CE within the corporate environmental management context in
focused on circularity. The public procurement constitutes a signifi- supply chains.
cant part in the emerging economies. Therefore, as asserted by De The contribution of this study is to propose a framework that
Groene (2015), the support of legislation on public procurement consists of initially defining the policy-related barriers that exist in
towards circularity will help to transform the whole supply chain and supply chains within the transition to CE, secondly, revealing the
local industries to focus on circular aspects. cause and effect relationships among the barriers, and finally,
implementing the research in the textile industry from an emerging
economy perspective, Turkey. The proposed framework is generic in
7.7 | The local governments in circular the sense that it can be implemented in supply chains of various
policymaking sectors such as food, durable goods, and automotive during the
transition to CE.
The local governments are more agile to reflect circularity within their This research conducts a case study in the apparel industry to
legislation. The reason is that local governments are capable of rapidly reveal applicability and illustrates the cause and affects relationships
revising their legislation according to the necessities. Hence, the local among barriers using fuzzy DEMATEL. According to the findings, the
necessities, constraints, and resilience of circular supply chains can be lack of legislation for efficient CE (C4) is revealed as the most impor-
strengthened. Further, decentralization can have an important role in tant barrier because it has the most significant relationship among all
16 KAZANCOGLU ET AL.

factors. Lack of mandatory requirements and responsibilities for man- Bet, B., Kas, J., Truijens, D., Lee, S. V. D., Broere, J., Leising, E., … Wang, Y.
ufacturers/suppliers for the CE (C17) and lack of government support (2018). Barriers and best practices for the circular economy. SMO
Promovendi – Circular Minds 2017/2018.
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Withana, S. (2014). Scoping study to identify potential circular
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