Paradoxical tensions in sustainable transitions en route to circular economy: the dynamic role Open Access

In a constantly changing world where globalization affects small and medium-sized enterprises, the effects on sustainability and circularity create new opportunities and challenges that need to be addressed by entrepreneurs in national and international contexts. Small and medium-sized enterprises in Sweden are subject to the Sustainable Development Goals and the European Green Deal, which require sustainable transitions for a green and circular business environment and demand solutions to solve current and future challenges (European Commission: Directorate-General for Communication, 2021; UN, 2015). As part of the aforementioned deal, a directive regarding corporate sustainability reporting has entered into force and affects small and medium-sized enterprises, where they need to align with a new reality (Directive, 2022/2464). Furthermore, practical implications are already in place, such as a regulation about eco-design requirements of sustainable products demanding actions, decision-making, assessments and measures to ensure compliance (Regulation, 2024/1781). This recent development enables both a top-down and bottom-up approach to strategy and policy implications, whereas organizations can be proactive or defensive during the decision-making process by the entrepreneurs (Larsson, 2022; Mazzucato, 2024). Moreover, the combination of global value chains and international business sustainability is affecting entrepreneurs, where the embeddedness between international and national business development can lead to a variety of outcomes (Dimitropoulos et al., 2023). Hence, businesses in Sweden that are small and medium-sized need to adapt to the winds of change and be aware of international business and entrepreneurship, where processes, value chains, reporting, business models, external relationships and the circular economy will be affected both today and in the future.

The circular economy has gathered attention from academia, policy and decision-makers and industry in recent years, whereas the rationale of having linear economies has been challenged, opposed and discussed in the entrepreneurial field. This notion involves entrepreneurs and entrepreneurship, where Ratten (2023) explains that opportunities that are related to business can be identified by applying the use of new, existing or recombining resources in an innovative way to enable solutions. Moreover, it is also explained that different types of entrepreneurship exist, such as technological, sustainable and international entrepreneurship, which come with different opportunities and challenges that involve international collaboration and long-term perspectives on economic, environmental and social factors (Ratten, 2023). There are behaviors that combine forward-thinking, risk and innovation over national boundaries, which can create value among entrepreneurs who are part of an international context that involves strategies, directives and regulations (McDougall and Oviatt, 2000; Zucchella et al., 2023). Subsequently, innovation has several future challenges that need to be addressed, and Martin (2016) highlights these with a focus on advances, tensions and general challenges. A possibility with a circular economy is that solutions can be developed for sustainability and circularity, where innovation and business models can be used as a tool for entrepreneurs and businesses to transition from a linear to a circular economy and enable new value opportunities with economic, environmental and social impact (Chabowski et al., 2025; Geissdoerfer et al., 2018a; Nosratabadi et al., 2019; Pillai et al., 2025). Hence, there are barriers and opportunities that small and medium-sized enterprises need to approach and manage to create value.

The phenomenon of paradoxical tensions can arise in businesses and organizations both nationally and internationally, where the circular economy with its economic, environmental and social facets, is challenged with adopted decisions that are connected to strategies that can be proactive or defensive (Alosi et al., 2025; Daddi et al., 2019). This can be reconnected to Larsson (2022) and Mazzucato (2024), who explain that strategy and policy implications are connected to both top-down and bottom-up approaches. The effects of globalization on small and medium-sized enterprises have led to businesses operating on an international level where paradoxes and tensions might arise and demand novel thinking to find solutions and identify opportunities (Prashantham et al., 2018; Reuber et al., 2018; Rygh et al., 2022). Paradoxical tensions may manifest in various forms and contexts during transitions toward a circular economy, as highlighted by Dagilienė and Varaniūtė (2023) and van Bommel (2018), who explore circular and sustainable business models. These perspectives can be linked to the work of Chabowski et al. (2025), Geissdoerfer et al. (2018a) and Nosratabadi et al. (2019), who address the challenges and potential solutions associated with sustainability and the circular economy. To have a further understanding and recent definitions of sustainability and the circular economy, Evans (2023) maintains that sustainability is a future dynamic state, whereas the circular economy closes, slows and narrows looped systems. Hence, both temporal and spatial perspectives interplay in the aforementioned definitions. The degree of sustainability as a paradoxical tension in business modeling is also identified and highlighted by Endregat and Pennink (2021), where focus is on the level of economic, environmental and social sustainability. Other views on paradoxical tensions connected to innovation can be found in Di Paola and Russo Spena (2021), which maintain that different coevolution and dilemmas might arise in businesses where internal wills and understandings of the entrepreneurial development can be confronted by different actors, such as the management or the employees in a business. Hence, the multilevel dimensions of paradoxical tensions in businesses offer a research gap and can give nuances and novelty that can push the current research frontier and enable entrepreneurs, businesses, policy and decision-makers to make informed and updated decisions during sustainable transitions toward a circular economy, enabling new opportunities and possibilities for future generations, whereas businesses can flourish and develop. This can be done both on smaller and larger scales when designing or proposing a new strategy, whilst a minor change can involve few actors, a major change can involve the whole business and eventually also external partners, stakeholders, suppliers, customers or end users which can incorporate a global or international context due to the processes and value chains that small and medium-sized enterprises are part of.

The aim of this research paper is to identify and explore the paradoxical tensions during sustainable transitions toward a circular economy. The research gap in the introduction lays the foundation for the following research question:

To answer the research question, we undertake a qualitative action design research to observe, interview and explore the processes, actors and interactions in different businesses where views from both the management and the employees are raised. These businesses are small and medium-sized enterprises in Sweden affected by globalization and have cross-border connections with various suppliers, stakeholders and partners. In this study, we need to address which paradoxical tensions can arise in an organization, but also where this happens in the organization to answer the research question. A theoretical framework that contextualizes sustainable transitions toward a circular economy will be outlined below, including the concept of paradoxical tensions, with a focus on identification and occurrence, to understand the dynamics when strategic or policy change is imminent. Afterwards, a methodological outline will present the action design research of this paper. This will be continued by sections containing the results, discussion and conclusions with an answer to the research question, ending with practical and theoretical implications as suggestions for future research that will be offered to finalize the research paper.

The theoretical framework in this research paper is three-fold and begins with contextualizing sustainable transitions toward a circular economy. This will be followed by emphasizing the concepts of paradoxical tensions and sustainable transitions to outline which paradoxical tensions exist and where they appear when moving toward a circular economy. This will enable a dynamic approach to the concepts where both internal opportunities and challenges are present, but also the effects of longitudinal developments and external impacts, such as international suppliers, value chains and globalization, when having sustainable transitions toward a set goal or mission.

Sustainable transitions toward a circular economy can bring new challenges and opportunities to an organization, which can lead to paradoxical tensions between different actors and stakeholders. When moving from a linear economy with market efficiency that is cost-driven to a functional circular economy with technical efficiency that is systems, science and technology-driven, new activities can be implemented, adapted or neglected to transition and reach a circular economy (Siderius and Zink, 2022). This shift from traditional views of market equilibrium to evolutionary economics, which relies on dynamic or organic developments toward a set mission, has received attention for decades and emphasizes the role of the entrepreneur in business development (Nelson and Winter, 1982; Schumpeter, 1939). The aforementioned argument has been further advanced by several countries that have outlined diverse strategies for achieving a circular economy through mission-oriented innovation policies. These strategies emphasize areas such as sustainable production and product design, sustainable consumption, supply chains and the use of materials, products and services, nontoxic and circular resource loops, and the role of businesses and other actors as key drivers of innovation and circular business models (Kirchherr et al., 2023; Normann et al., 2024; Government Offices of Sweden, 2020; Pillai et al., 2025; Regulation, 2024/1781). The last focus area is highlighted as the mediator for the former focus areas, including business and other actors that are underlined as critical roles for a sustainable transition, where innovation and circular business models can be the end goal, where the strategy aligns with the Sustainable Development Goals (UN, 2015). The need for alignment with the Sustainable Development Goals is also underlined by Song et al. (2022), who highlight the challenges but also the need for businesses in various sectors to contribute to solving future issues and challenges, which can be both local and global. This is also related to strategy implementation through mission-oriented innovation policies, whereas sustainability, sustainable development or sustainable transitions interplay toward a circular economy (Kirchherr et al., 2023). Hence, as Ratten (2023) explains, individuals who are part of technological, sustainable or international entrepreneurship play a role in solving future issues and challenges, which Martin (2016) and Schumpeter (1939) note, that can be related to sustainable transitions toward a circular economy through different strategy or policy implications.

Even though the circular economy has been pinpointed as a vision and way forward toward sustainable and circular business models, innovations and systems with economic, environmental and social impacts, there are critiques and barriers associated with the phenomenon and its possibility to create value, which ought to be highlighted and balanced toward the constructive argumentation. Corvellec et al. (2022) weigh in with a critique of the circular economy and business models by outlining political, practical and theoretical issues where global changes are affecting local or national outcomes, values and results. This is further outlined by Borchardt et al. (2024) and Brown (2021), who have a mission approach and emphasize that there could be a drift away from the intended goal or vision, which can lead to uncaptured value. The critical points are the definition of the various concepts, the neglecting of established and already accumulated knowledge, the limited implementation of efficient circular economies, the decision-making and daily actions, and the uncertain effects or impacts on social and environmental sustainability (Borchardt et al., 2024; Brown, 2021; Corvellec et al., 2022). Shepherd et al. (2015) further elaborate that the decision-making process affects the entrepreneur by being in a position where risk and uncertainty are balanced and can lead to new value opportunities for the business. Contextualizing these issues, notions of time and space are necessary in the decision-making process where knowledge is accumulated in an organization (Hayek, 1945). Larsson (2022) adds to this by explaining that temporal and spatial perspectives are necessary in both bottom-up and top-down approaches to strategy and policy, where the entrepreneur operates in the nexus between opportunities and capabilities. This is further outlined by Alosi et al. (2025), who explain that proactive or reactive leadership adapts different decision-making, which is influenced by paradoxical tensions either at the top level or operational level in the organization, with different self- or collective efficacy areas interplaying and enabling acceptance and legitimation of the decisions, where the context is circular economy. Moreover, Alosi et al. (2025) use goal setting theory, which is a bottom-up approach to balance the top-down policies that affect sustainability or circularity strategies, whereas the goal setting theory is explained by Locke and Latham (2002) as an iterative cycle where cognition and performance are integral elements which affect the outcomes.

Chrispim et al. (2024) explain that barriers are also associated with the implementation process, and the main barriers are a lack of financial resources, governmental and regulatory barriers, the lack of interest from stakeholders and the high complexity of the circular economy with a deficiency of knowledge, which can lead to international actors not being interested or willing to change and adapt during the implementation process. On the same note, with the introduction of the European Green Deal, small and medium-sized enterprises need to adapt to a new reality where globalization plays a role in their strategic decisions (European Commission: Directorate-General for Communication, 2021; Rygh et al., 2022). This is further underlined by the adaptations of directives and regulations, such as corporate sustainability reporting and eco-design requirements of sustainable products, which demand attention and the need to comply (Directive, 2022/2464; Regulation, 2024/1781). Hence, institutional change is connected to decision-making and entrepreneurial endeavors, where actions play an important role in enabling new value opportunities through policy implications (Tolbert et al., 2011). Moreover, barriers to the circular economy have also been identified by Ritzén and Ölundh Sandström (2017), where the authors explain that barriers can be operational, structural, attitudinal, financial or technological, which can lead to businesses being left in a linear economy, without adding or improving sustainable or circular elements. The barriers to a circular economy can, in turn, be divided into specific parts and the notion of having a traditional linear economy or business model is challenged by the sustainable transitions toward circularity (Ritzén and Ölundh Sandström, 2017). This argumentation is linked to Geissdoerfer et al. (2018a), who explain that for a traditional business model to be sustainable or circular, there is a need to identify solutions for sustainability or solutions for a circular economy to overcome challenges and enable sustainable business model innovation or circular business models. Subsequently, both major and minor barriers can be addressed by businesses in sustainable transitions toward a circular economy, which includes parts, sections, departments or the whole of the organization, with the national and international actors that are part of the value chain.

Several paradoxical tensions can be identified in an organization where a variety of paradoxical tensions are possible to outline and connect to strategies. The paradoxical tensions in an organization can be linked to strategies, where entrepreneurship, business or companies striving toward a circular economy can lead to proactive or defensive strategies, which can be adopted by the decisions made by the entrepreneurial or business management (Alosi et al., 2025; Daddi et al., 2019). Waldman et al. (2019) also connect decision-making to the role of paradox theory, whereas paradoxes can occur in an organization that affects both the management and the employees, while Uzhegova and Torkkeli (2023) maintain the connection of sustainability and responsibility of decision-making in small and medium-sized enterprises. By integrating business models, the level of sustainability can also lead to paradoxical tensions when an organization has a certain degree of sustainability but is trying to increase it through coevolution or innovation, either locally or globally (Di Paola and Russo Spena, 2021; Endregat and Pennink, 2021). Sustainability and the aim to achieve net zero with its opportunities and challenges have also been connected to both geographical regions and entrepreneurial sectors around the world and can involve technological, sustainable and international entrepreneurship (Crowther and Seifi, 2023; Prashantham et al., 2018; Reuber et al., 2018).

van Bommel (2018) explains that four different categories of paradoxical tensions can occur, which are connected to sustainability and need to be managed and addressed. These four categories of paradoxical tensions are divided into: (i) organizing, (ii) learning or temporal, (iii) belonging or identifying and (iv) performing (van Bommel, 2018).

It is further outlined that paradoxical tensions can be managed through different strategies that focus on acceptance, resolution and suppression, which in turn can lead to alignment, opposition, avoidance, synthesis, temporal separation or spatial separation in the organization (van Bommel, 2018). De Angelis et al. (2018), Farooque et al. (2019) and Lahane et al. (2020) underline the applied and practical sides of the circular economy such as supply chain management, where they indicate that sustainable and circular business models, value chains, design for circularity and innovation can be both drivers and barriers in the sustainable transitions toward a set mission and demands attention. By centering exclusively on supply chain management, Cichosz et al. (2025) have identified paradoxical tensions and where they occur by focusing on the sustainability aspect of supply chain management and highlighting the interplay of strategies, practices and capabilities. Moreover, global value chain relations to sustainability, transparency and corporate social responsibility are highlighted by Dimitropoulos et al. (2023) and Serdijn et al. (2021) as a missing link that affects businesses on an international level. Subsequently, there are different paradoxical tensions identified by Dagilienė and Varaniūtė (2023) in their framework, these are tensions in values or goal settings, innovation adaption degrees, compliance, collaboration in networks, performance orientation and innovation adaption types (Dagilienė and Varaniūtė, 2023). Dagilienė and Varaniūtė (2023) divide the first three paradoxical tensions into a temporal perspective, the following two paradoxical tensions into a spatial perspective and the last paradoxical tension into a mix of temporal and spatial perspectives. The temporal and spatial perspectives have boundaries to time and location in an organization where paradoxical tensions can occur, according to Dagilienė and Varaniūtė (2023), which also aligns with van Bommel (2018). Hence, the framework offered focuses on which paradoxical tensions can be identified and where they arise during sustainable transitions toward a circular economy and can be reconnected to local and global opportunities and challenges.

As outlined in the introduction, business models and in particular sustainable and circular business models, are an integral part of the circular economy and can enable sustainable transitions. During the last decades, we have seen several explanations of this concept amongst entrepreneurship and business both nationally and internationally, and Bocken et al. (2016) and Chabowski et al. (2025) explain that circular business models are business model strategies that are aimed at the transition toward a circular economy with the narrowing, slowing and closing of resource loops. Thus, the focus is on strategy as a factor that has to be acknowledged by the organization and the resource loops can affect both national and international partners. It is explained that the solutions for sustainable business models are oriented toward sustainable value, proactive multi-stakeholder management and long-term perspectives, whilst solutions for circular business models focus on closing, slowing, narrowing, intensifying and dematerializing resource loops (Geissdoerfer et al., 2018a). Other explanations of circular business models involve different aspects where sustainability is a recurring factor, as noted by Geissdoerfer et al. (2018b), Ünal et al. (2019) and Zucchella and Previtali (2019), which are linking circular business models to sustainable development. Both drivers and barriers are also highlighted in relation to circular business models and supply chain management, which affects international business and the sustainable transitions toward a circular economy, where the management needs to adapt strategies depending on the opportunity or challenge ahead (De Angelis et al., 2018; Farooque et al., 2019; Lahane et al., 2020). This can in turn be connected to the practical implications of the European Green Deal along with directives and regulations that managers and business owners ought to consider in their strategies, no matter if they are proactive, defensive, top-down or bottom-up (Directive, 2022/2464; European Commission: Directorate-General for Communication, 2021; Regulation, 2024/1781). Moreover, by integrating different resource loops with a focus on cycles, extensions, intensification and dematerialization, solutions might arise for a circular economy, which in turn can lead to circular business models through the use and adaption of strategies for entrepreneurial endeavors, business and strategies (Bocken et al., 2016; Chabowski et al., 2025; Geissdoerfer et al., 2018a, 2020). Subsequently, the connection to strategies leads the organization to the possibility of having paradoxical tensions that need to be managed, as noted by Bocken et al. (2016) and Daddi et al. (2019) and outlined above.

Martin (2016) underlines the role of intrinsic tensions in solving future challenges, with a focus on balancing them in relation to cooperation, competition, open source, intellectual property, exploitation, exploration and open and closed innovation, which involves actors and entrepreneurs on national and international levels. On the other hand, whilst small and medium-sized enterprises are influenced by globalization, tensions connected to global versus local interests, competition against cooperation and economic profit contrasted with social impact create new situations that demand attention (Prashantham et al., 2018). Furthermore, both Kostakis and Tsiouris (2024) along with Throop and Mayberry (2017), explain that tensions are inevitable when navigating from current convictions into the new or unfamiliar paradigm of sustainability, which aligns with the notions regarding levels of sustainability from Di Paola and Russo Spena (2021) and Endregat and Pennink (2021) but also the international entrepreneurship effects from globalization, as outlined by Prashantham et al. (2018), Reuber et al. (2018) and Rygh et al. (2022). The importance of strategies, as well as processes, policies and structures in an organization, is explained by Miles et al. (1978), whereas the authors argue that ongoing transitions in an organization occur when the goals are assessed with the questioning, verifying and redefining of interactions. This development comes with different issues, such as entrepreneurial, engineering and administrative problems, which are in an adaptive cycle that contains a strategic typology with different characteristics (Miles et al., 1978). Therefore, the strategies found in an organization can be connected to the strategies leading up to paradoxical tensions when transitioning toward a circular economy or by working with business modeling or the degree and level of sustainability (Daddi et al., 2019; Di Paola and Russo Spena, 2021; Endregat and Pennink, 2021). Moreover, in the strategic typology presented by Miles et al. (1978), it is noted that three different strategic types are considered stable and labeled as the defender, the prospector and the analyzer. The defender characteristics are connected to the top management and leadership of a business, whilst the prospector characteristics are the opposite of the aforementioned with a focus on innovation, creation and exploiting opportunities, whereas the analyzer characteristics are a mix of the former two and they exist in a continuum between the aforementioned opposites and is linking the strategy together as an intermediary (Miles et al., 1978). Hence, both a top-down and a bottom-up dynamic can exist within an organization where strategies can be adopted, changed or neglected, which involve temporal and spatial perspectives.

Apart from identifying paradoxical tensions in an organization, there is also a need to understand where they occur to manage and relieve tensions. Dagilienė and Varaniūtė (2023) have developed a framework for paradoxical tensions when transitioning toward a circular economy, with a focus on circular business models. The framework by Dagilienė and Varaniūtė (2023) is built on a taxonomy that includes different objects of tension, which are divided into circular business models, circular ecosystems and sustainable business models, business partnership or sustainability management, which can be reconnected to van Bommel (2018) and the different categories surrounding sustainability. Sustainable transitions can be adopted on different strategic levels and interplay with business models and value creation, where the actors can be small and medium-sized enterprises, entrepreneurship, governmental agencies and large firms and are involved both in national and international contexts or settings (Hernández-Chea et al., 2021). This is also connected to responsibility, globalization and business models, including different value building blocks that interplay and can lead to value intentions where the mindset, pursuits or thinking of the owner or manager plays an important role in the decision-making process, while the identification of uncaptured value in sustainable business model innovation can lead to new value creation (Barth et al., 2017; Osmanovic et al., 2024; Prashantham et al., 2018; Reuber et al., 2018; Uzhegova and Torkkeli, 2023). From an international entrepreneurship view, Araujo et al. (2022) explain that an ecocentric mindset focusing on management is key for understanding the uniqueness of place, materiality, sense of place and ecological sensemaking in the decision-making process. By still focusing on entrepreneurship and organizational structure, Foss et al. (2019) offer a judgment-based approach where different actions, beliefs and results interplay in the decision-making process of the entrepreneur. Moreover, Evans (2023) adds that sustainable development consists of four different meta-characteristics, including new values and visions, new policies, long-term systems-level change and new mindsets, which in turn are divided between economic, environmental and social factors. The importance of the mindset is also highlighted by Amit and Zott (2020), where they connect business models to strategies in entrepreneurship. The mindset, particularly the entrepreneurial mindset, plays a vital role in decision-making and new value opportunities, including behavioral, cognitive and emotional elements that interplay (Daspit et al., 2023; Kuratko et al., 2021; Osmanovic, 2025). Subsequently, the different dynamics during sustainable transitions can lead to new challenges and opportunities, where paradoxical tensions can be a result of the aforementioned sustainable transitions and arise in different hierarchical or longitudinal parts of the organization that can be local or global.

According to Audretsch (2012), there are different perspectives of entrepreneurship, such as the organizational view, the performance approach and entrepreneurship as a behavior. These perspectives can be connected to international entrepreneurship and cross-national boundaries, where behaviors that combine forward-thinking, risk, tensions, opportunity identification and innovation that can create value and new value opportunities interplay (McDougall and Oviatt, 2000; Prashantham et al., 2018; Reuber et al., 2018; Zucchella et al., 2023). Moreover, the role of the leadership in enabling sustainable transitions in entrepreneurship and businesses is outlined by Throop and Mayberry (2017), who explains that in order for a business to grow and flourish, there is a need for the leaders or management to behave and act in new and creative ways where the world is constantly changing with new complexities, uncertainties and collaborations that demands attention but also offers opportunities and possibilities which can lead to disruptive or innovative business models. The aforementioned argumentation aligns with the emerging innovation model by Ávila-Robinson et al. (2022), who explain that emerging and incremental technologies can lead to sustainable and open innovation along with business model transformation. Leitch and Harrison (2018) also highlight the intersection of entrepreneurship and leadership, where the entrepreneurial mindset and the style of leadership overlap into entrepreneurial leadership, whereas Volery and Mueller (2018) make further connections to the occurring paradoxical tensions that need to be managed to create new strategies and opportunities, which emphasize the entrepreneur’s behavior and actions. Throop and Mayberry (2017) further underline that to advance, develop and compete in the market, there is a need to change the organization which can lead to natural resistance in the business toward the necessary changes and opportunities that might arise on a national and international scale, which can create issues for sustainable transitions. The authors offer a pyramid model that consists of a lower part of virtues, which is less visible and an upper part of actions, which are visible and where the pyramid model adapts to both individual and organizational levels (Throop and Mayberry, 2017). While moving up in the pyramid model, there is a surface between the visible and nonvisible elements that are separated by the thinking and feeling of the individuals in the organization, which aligns with elements found in the entrepreneurial mindset (Daspit et al., 2023; Kuratko et al., 2021; Osmanovic, 2025). Subsequently, sustainable transitions are explained by Markard et al. (2020) as substantial modifications made to socio-technical systems, such as those related to food, energy and transportation, with the goal of addressing grand challenges in a way that satisfies current needs without jeopardizing the capacity of future generations to fulfill their own needs. Hence, the aforementioned explanation aligns with the concept of sustainability presented by Brundtland (1987), but is more detailed and addresses grand challenges, which is in accordance with Martin (2016) and can lead to different paradoxical tensions in an organization.

Ghisellini et al. (2016) further add the involvement of actors in society and their capacities to substitute or adapt patterns and establish or create collaborations locally or globally, when transitioning toward a circular economy. To understand the opportunities and challenges of the circular economy, there have been several literature reviews conducted during the last decade with different focuses, such as trends and gaps in the circular economy (Homrich et al., 2018), comparisons of circular economy and sustainability concepts (Geissdoerfer et al., 2017), key elements with guide for action (Chrispim et al., 2023), sustainability and global value chains (Dimitropoulos et al., 2023; Serdijn et al., 2021), sustainable supply chain management (Cichosz et al., 2025), circular supply chain management (Lahane et al., 2020) and exploration of circular economy origins, advantages, disadvantages, modeling, principles and implementation (Ghisellini et al., 2016). Chrispim et al. (2024) underline the complexity of the operationalization toward a circular economy, and different factors interplay, such as awareness and perceptions of stakeholders, that impact decision-making and behaviors. Therefore, by applying the aforementioned definition, it is noticeable that the term circular economy consists of an interplay of different elements, operationalizations, processes and factors that can cross national borders and ought to be considered and revised during sustainable transitions toward a circular economy. This leads to paradoxical tensions potentially arising amongst individuals, countries, systems, actors or society, which demands a pragmatic approach to where paradoxical tensions can occur.

Different barriers and opportunities are connected to sustainable transitions, such as changes in whole systems, the interaction between several and multiple systems, resistance or decline, social and consumer practices and governance (Coenen et al., 2012; Markard et al., 2020). Aagaard et al. (2021) also highlight the importance of business models for sustainable transitions with a focus on innovation and value creation, whereas the authors offer a spiral framework consisting of a connection between business models and sustainable transitions. The spiral framework intercepts time and scope with boundary conditions and the innovation and implementation of business models interplaying, giving a multilevel display of the possibilities of sustainable transitions in the operationalization of the entrepreneurial process, according to Aagaard et al. (2021), which aligns to the temporal and spatial perspectives of paradoxical tensions as explained by Dagilienė and Varaniūtė (2023) and van Bommel (2018). Furthermore, three propositions are outlined by Borrello et al. (2020) to have sustainable transitions toward a circular economy, whereas the authors explain that a unified narrative is needed, instead of diverse schools of thought, to enable policy change, which is followed by the transition into multiple circular systems that are socio-technical and lastly, going from eco-efficiency to eco-effectiveness to enable, foster and nurture sustainability. This argumentation can also be related to the Sustainable Development Goals, as well as the European Green Deal, legislation, mission-oriented innovation policies and the need for businesses to adapt to a changing world (Directive, 2022/2464; European Commission: Directorate-General for Communication, 2021; Mazzucato, 2024; Regulation, 2024/1781; UN, 2015). Hence, sustainable transitions are linked to the circular economy in several ways, with an arsenal of possibilities and prospects to operationalize different actions of strategies in the entrepreneurial process, which can create value through business modeling, innovation, policy implications and systems changes, but also the occurrence of paradoxical tensions.

The strategies in an organization can have a multilevel display between the management, leadership, staff, consultants and employees, which can affect the outcomes and the processes, designs, implementations or structures that, subsequently, can lead to various spillover effects such as paradoxical tensions. The interplay of paradoxical tensions with sustainable transitions when moving toward a circular economy in a business is, as noted above, closely linked to strategies, entrepreneurship and entrepreneurial endeavors such as business modeling and innovation, levels of sustainability, the entrepreneurial mindset, globalization or locality and decision-making, which needs attention to outline the possibilities and opportunities, but also the barriers and challenges which might arise during the sustainable transitions toward a circular economy. Thus, identifying which paradoxical tensions exist in an organization and where they occur can lead to a further understanding of the dynamic processes and development of sustainable transitions toward a circular economy. This understanding can be a pathway to value creation and enable new strategies to be implemented.

To summarize the theoretical framework, an illustration of paradoxical tensions in sustainable transitions toward a circular economy is outlined in Figure 1. This illustration conceptualizes how the temporal and spatial perspectives of paradoxical tensions can be identified and occur in an organization during sustainable transitions toward a circular economy. The paradoxical tensions are the colored circles, which highlight the different tensions that can be identified and occur, that are interplaying between the temporal and spatial perspectives in the figure. Subsequently, the sustainable transitions are balanced between the paradoxical tensions in the figure, whereas the end goal or mission is a circular economy.

The methodological approach in this research paper is qualitative and based on action design research (Sein et al., 2011). Action design research originates from a tradition of participatory inquiry, where researchers and practitioners collaborate to solve real-world problems, and is motivated because of the need to generate practically relevant knowledge through iterative engagement and reflective learning (Sein et al., 2011). This approach is further inspired by observations, interviewing, case studies, formative research and exploratory studies with a focus on reflexivity, pragmatism and storytelling drawn from Alvesson and Sköldberg (2017), Bell et al. (2022), Bryman et al. (2022), Farjoun et al. (2015), Pollock (2021) and Vastine et al. (2005), which is highlighted below to support the methodological process. The action design research methodology consists of four stages: (i) problem formulation, (ii) building, intervention and evaluation, (iii) reflection and learning and (iv) formalization of learning, according to Sein et al. (2011), whereas the operationalization of the four stages is found below.

Figure 2 presents the action design research with its practical adaptation for the methodological approach.

The five cases in the sample group are from a project and described, outlined and anonymized in Table 1, where an overview can be found of the formative research, in accordance with Vastine et al (2005). The reasons for the cases being in the project are divided between the need to adapt to new policies, involving directives and regulations and the proactive will to change from a linear economy to a circular economy. Hence, some of the cases have already begun their sustainable transitions toward a circular economy when entering the project, whilst others are at early stages of this journey. As part of the problem formulation, the preintervention phase is subcategorized with sustainability and circularity (S and C in the table), whereas the businesses that are either using sustainability or circularity concepts on their respective web pages or social media are marked out in the table. The business analysis phase is subcategorized into the number of individuals who are part of the management and the number of individuals who are employees. The feedback session phase is regarding whether the business has chosen one or more focus areas to work with in the project to reach its goals. The postintervention phase is a question regarding whether the businesses are still working with and implementing the strategy they have proposed at an earlier stage and how this is practically operationalized.

The practical adaptations of the methodological approach in this research paper started with a sample group consisting of five separate case studies with small and medium-sized enterprises in different industries that have different opportunities and challenges. All the businesses are part of a project with the end goal or mission of enabling a circular economy, whereas the businesses are given tools, coaching, feedback and education to reach the individually set objectives for each business. Hence, each case study is a Swedish small or medium-sized enterprise that has actively engaged in shifting strategies toward a circular economy, and subsequently, interventions are offered from the project, where decisions have both a local and global effect on actors. As researchers, we were invited and allowed to conduct qualitative action design research where the setup in each of the cases was systematic and in line with the four stages by Sein et al. (2011).

The case study design, which Bell et al. (2022) explain is a possible approach to understanding organizations, systems or workplaces, offers a suitable fit to the sample group because detailed and intensive examinations can be identified and recognized for the analysis. Subsequently, the logic behind the businesses actively engaging in designing and implementing new strategies lies in the need for change in the respective industry, which apart from focusing on circular economy and circular business models, also applies to resource-efficient production, energy transitions and digitalization that are offered as focus areas by the project. Hence, the problem formulation, which is the first stage according to Sein et al. (2011), demands a pragmatic approach because each business case has already identified a problem. Pragmatism principles revolve around a problem-solving notion that is process-oriented and involves temporal and spatial perspectives, as outlined by Farjoun et al. (2015), where there is a paradoxical element in which individuals can both follow and align with ideas and rules but also question and be skeptical of the same. Hence, the first stage of the problem formulation rests on the conception that there is a problem-solving notion that demands a pragmatic approach and can lead to paradoxes in which individuals might align or deviate from the set or proposed strategy, which could create tensions in the organization.

The second stage of building, intervention and evaluation was practically oriented and demanded a reflexive approach in each case study, in accordance with Alvesson and Sköldberg (2017) and Sein et al. (2011), because every business has its own uniqueness and operates in different industries with various amounts of internationalization. The data collection consisted of field visits to the business premises, during which whole days were spent at each location to observe, interview and explore the management and employees for the business analysis, whereas formal and informal walks and talks were possible at the respective business premises. This aligns with pragmatic approaches where exploration, deviancy and innovation are part of the process-oriented view (Farjoun et al., 2015). The first half of each day was in a qualitative interview set up with the management, exclusively consisting of two to three people in each business and lasted for three hours. The second half of the day was oriented toward the employees who were working with production, operationalization, customers, service and output. Interviews, feedback and questions were raised with the employees, depending on how and if they were available, where notes were taken continuously. Hence, two-fold data collection and artifacts emerged, covering a broad spectrum of management and employee insights from different departments, sections or divisions of the respective business.

The third stage of reflection and learning was parallel to the already conducted stages, whereas analysis of the collected data was conducted regularly, as well as feedback was given to each business in feedback sessions consisting of shorter meetings which were either online or at business premises with the management (Sein et al., 2011). This is in line with relations between micro and macro levels of analysis in pragmatism, where recursion or iterations are part of the analysis process (Farjoun et al., 2015). Again, reflexivity was a key principle, in accordance with Alvesson and Sköldberg (2017), because data collection and emerging artifacts had to be analyzed in relation to the theoretical framework and given as feedback to the businesses to continue their journey toward a circular economy. This was also enabled due to the feedback sessions being decided at a later stage, which opened time for thoughts and insights before feedback was given.

The fourth and final stage of formalization of learning was concluded following the completion of stages one to three in each business case. During this phase, paradoxical tensions and their points of occurrence were identified based on the collected data and emerging artifacts, ultimately leading to the results presented through the action design research in this study (Alosi et al., 2025; Bryman et al., 2022; Dagilienė and Varaniūtė, 2023; Sein et al., 2011; van Bommel, 2018). As noted above, by utilizing a pragmatic approach, temporal and spatial perspectives in this stage have been outlined along with paradoxes where individuals both align and deviate from the set goal or mission (Farjoun et al., 2015). Both the data collection from the management and the data collection from the employees were approached with the same attention to understand, describe and capture different phenomena that appeared during the field visits to the business premises.

Due to the sampling group being part of a project that enables intervention, formative research was also used to complement the action design research, in accordance with Vastine et al. (2005). This consists of four separate phases, which are formative research, planning, refinement and feedback and implementation of intervention, that align with the action design research stages and offer a methodological structure that is rooted in established methods, which are carried into the results section to highlight the novelty of the findings. Subsequently, formative research has had practical implications in the online screening of websites and social media accounts of respective businesses before the intervention by the project. During the intervention, the formative research enabled the identification of paradoxical tensions and where they occur whilst conducting the business analysis and feedback session with the management and employees. Ultimately, after the intervention, there is an opportunity for the businesses to further engage in the project and work with sustainable transitions toward a circular economy by streamlining and adapting the resources toward set goals. The formative research facilitates a micro approach in relation to the management and employees in which their own individual knowledge, insights and expertise is highlighted, along with a macro approach which is the context in where the organization is operating, as noted by Farjoun et al. (2015), which provides nuances and gives a deeper understanding to the aim of this research and enables an answer to the research question.

The operationalization of the methodological approach with all four stages can be found in Figure 3 above. In the first stage, the respective businesses already have a problem formulation where the management has proposed a strategy for sustainable transitions toward a circular economy. The second stage is the business analysis, which is the main data collection stage, where interviews are conducted with the management and the employees. The interviews were scheduled for three hours with the management and three hours with the employees, whereas all the interviews were conducted during one working day. This is followed by a feedback session where the management receives feedback from reflection and learning from the business analysis. Each of the cases had its business analysis coded into different keywords to discover thematic patterns, following the approach outlined by Bryman et al. (2022). The process enabled the identification of paradoxical tensions and their occurrences, thereby contributing to addressing the research question of this study. The feedback session was scheduled for two hours, and the management was given the option to conduct this feedback session online if necessary and easier due to an already established contact. Finally, management decides on the proposed strategy, which is the culmination and formalization of the past stages. For validity, reliability and replicability reasons, the same approach was applied throughout the study to enable each of the businesses to engage and participate on the same terms and conditions (Bell et al., 2022; Bryman et al., 2022). However, due to each of the businesses having their own uniqueness and differences, adaptations have been made which primarily resulted in differences when it comes to amount of interviews conducted with the management and the employees. This is mainly due to some of the businesses having work conducted outside of the business premises, businesses having working shifts during the day or the management or the employees needing to be on standby and leave. Hence, the authors acknowledge that bias and limitations exist with the chosen methodology and opt for transparency and openness throughout the research process.

The practical implication from the case overview indicates that only one of the businesses is promoting their sustainability work online through websites or social media, whereas none of the businesses are focusing on circularity as a means of communication or information in their public channels. The business analysis shows a variety of the size of respective businesses, where the management explicitly consists of two to three individuals, whilst the business cases can be divided into two groups based on the number of employees. The 12 individuals who are part of the management in the businesses consist of two females and ten males. Three businesses have fewer than 20 employees and the smallest business has around ten employees. Two businesses have more than 20 employees, and the largest business has around 40 employees in total. Moreover, the majority of the employees are male, with some departments or sections in the businesses having only male employees. From the feedback session, all except for one business have decided on a focus area to continue working toward a circular economy within the project. Each business opts for the focus area that it deems most important, but the project can intervene or compromise if there are deviations from the business analysis. However, the businesses ultimately decide and have the last word on the decision of the focus area. The chosen focus areas are divided between automation, circularity, digitalization and resource-efficient production, where one of the businesses is yet to decide. All the businesses are part of a general focus area, which is strategy and culture, that is integrated into the project. Notably, even though the feedback session is with the management, when the project continues, both the management and the employees are part of the interventions that can occur, such as workshops, coaching or education. Finally, every business has decided to continue working with their proposed strategy, and some are making changes and adaptations whilst others are continuing on with the primary idea. One of the businesses has, through the project, taken in an automation expert who is further assisting the business and its strategy. Also, another business has opted for more assessments and coaching from the project to advance further. The data collection was conducted from the second half of 2023 until the first half of 2024. Notably, the project ends in 2026, and the businesses still have the option to refuse or quit working with their proposed strategy and, in the postintervention phase, make a decision on stopping the development and opting out.

The results from the methodological approach are presented in the next section with a storytelling approach, in accordance with Pollock (2021). This includes the different categories surrounding paradoxical tensions and sustainability by van Bommel (2018), along with the paradoxical tensions framework by Dagilienė and Varaniūtė (2023) and the paradoxical tensions model by Alosi et al. (2025) to answer the research question. The aforementioned references from the theoretical framework are used as the foundation for the analysis, where conclusions are drawn based on the alignment or deviation from the theoretical framework. The results section also includes quotations from different managements and employees to integrate individual views along with a conceptualization of the different roles and actions where paradoxical tensions are identified and occur, which relies on the strategic typology by Miles et al. (1978) and its international context to offer practical implications from this study.

Several different observations have been relevant in the results, which can be connected to paradoxical tensions during sustainable transitions toward a circular economy in small and medium-sized enterprises in Sweden. Some of the findings are expressed by the management, whilst other findings are linked to the employees and can be explained as technological and nontechnological artifacts, which are dependent on the industry in which the business operates and have both national and international perspectives. Due to sustainable transitions toward a circular economy being linked to local and global contexts, there are also findings underlining the effects and outcomes of policies, strategies, directives and regulations from the global level to stakeholders, requirements, value chains and de-globalization on the local level, where the business cases find themselves in between the extremes. To set the stage, this results section will begin with highlighting different quotations from the business cases and then follow up with presenting the categories of paradoxical tensions, the paradoxical tensions framework and the paradoxical tensions model, along with the strategic typology, which also will include visualizations.

The initial findings are related to the circular economy as an end goal or mission where all the business cases have an expressed will from the management that they have taken a strategic standpoint in beginning to change. This change is moving from a linear to a circular economy, even if it can have an international impact on suppliers or value chains, due to directives and regulations which are imminent or already implemented. Hence, there are similarities and differences in the approach to sustainable transitions toward a circular economy in which the business cases find themselves in. By needing to change, the management can adopt either a proactive or reactive stance to meet the new requirements, which are further outlined and conceptualized below. This is also the main reason for establishing contact with the project and beginning the journey of sustainable transitions toward a circular economy, because the project becomes a foundation of knowledge, benchmark and resources. One example of this is directly addressing the issue that businesses, and in particular the management, face:

This top-down approach to strategy is common throughout the business cases and relates to policy implications, but the balance between what is already done and what needs to change in terms of strategy can vary between organizations. Another business management underscores the necessity of adopting a new strategy to remain competitive in both national and international markets, while simultaneously recognizing the importance of implementing bottom-up changes to facilitate this transformation:

This can, in turn, be broken down into smaller pieces, such as some businesses being more prone to work with business modeling, which is the main factor in the sustainable transitions, whilst others are more oriented toward resource-efficient production, energy transitions or digitalization of processes, depending on their industry sector, globalization and past experiences. This leads instead to a bottom-up approach where the suppliers, products and services create a basis on which strategies are adapted depending on whether suppliers, resources or materials can be exchanged, removed or updated. However, the above quotations also enable paradoxical tensions to arise internally when the respective management does not have a clear idea of the next step of the business due to influences coming from above and below and there is a need to have a spatial awareness to navigate sustainable transitions toward a circular economy. This has also laid the foundation for when the feedback session leads to a clearer picture of what is identified in the respective business and where or how it is possible to further advance toward their objective.

Another aspect of the findings is connected to the operationalization of value creation within the business cases, which is linked to both sustainable transitions and sustainable or circular business models, where a higher sustainable value is sought from the strategies that are proposed or planned. Although, this process is iterative, where trial and error or small-scale pilots are used to test the national or international markets. This is related to value intentions, which are needed for economic, environmental or social development and are decided by the management of the respective business. A business case highlighting issues with acting on value intentions is shared between the management:

The decision-making from the management is the execution that results from the accumulation of the operationalization and ends the strategic rationale with a proactive or reactive stance, which effectively interplays with the behavioral, cognitive and emotional elements of the entrepreneurial mindset. Identifying opportunity and willingness to take risks play a role in decision-making because strategic changes might lead to paradoxical tensions. As noted earlier, this can also lead to paradoxical tensions where the management takes on too many tasks and has an overwhelming workload that gets more intensive due to the sustainable transitions toward a circular economy. To summarize the previous examples, the management has a proposed strategy, values intentions for sustainable transitions and makes decisions based on their entrepreneurial mindset as part of the strategy toward a circular economy.

The results, which are highlighted and explained by the employees, are connected to the specialized knowledge of the operational processes of the respective businesses and the identification of uncaptured value within the organization. The employees possess knowledge, insights and expertise about the operationalization, daily works, value chains and routines of the business which are accumulated over time. Moreover, the employees are aware of the possible consequences and how this can impact the business if problems or issues arise in the operationalization. The specialized knowledge, insights and expertise about the processes in the business lead to a reaction to the strategy proposed by the management, which can be both positive and negative from the employees. One example of this comes from an employee after an internal business meeting:

The previous quotation also reflects approaches that can either be proactive or reactive, and come from the employees if there is no need or possibility to act, which is also a possible reason for paradoxical tensions in the organization. From the same business, there are more views highlighted by the employees when it comes to specialized knowledge, insights and expertise:

The identification of uncaptured value is instead a reaction to the value intentions of the management, which can align with the specific knowledge that the employees have or lead to new or innovative ways of thinking or doing business to enable new value opportunities with a higher sustainable value that can both involve global actors or by narrowing to a local context. This is exemplified by the employees intercepting different elements of the operationalization of the business, and they are well aware of lead times, delivery, customers and end users. Hence, a dichotomy is created where the employees can mirror the management and either align or refuse changes and strategy proposals, depending on the competence and information exchanged, which could lay the foundation for paradoxical tensions. The former business case also underlines the possibility of relaxing and relieving paradoxical tensions among employees that can occur in the organization. This is further noted in one of the businesses where the management is preparing interviews to hire new employees:

As noted previously, the possibility of having paradoxical tensions can be something attractive and lead the business forward if the vision or end goal is common and shared in the organization. Moreover, while reflecting on the current and future employees, there are more nuances explained, which indicate a spectrum of possibilities and opportunities that exist within the organization:

Hence, the results indicate that there is an interplay between different actors and roles within the organization that leads the business toward a circular economy by utilizing different strengths, aiming at the same goal or mission, where the management and employees have different opportunities and challenges to address, which can lead to paradoxical tensions. This is happening whilst the business cases need to navigate in an environment where both local and global contexts are affecting the organization. Ultimately, the employees respond with advantages and disadvantages, or pros and cons, such as opportunities and challenges, to the strategy and the identification of uncaptured value in the sustainable transitions toward a circular economy.

By applying the categories of paradoxical tensions surrounding sustainability, which is described by van Bommel (2018), there are different findings that can be sorted into each of the categories of organizing, learning or temporal, belonging or identifying and performing. Figure 4 presents a visualization of the findings, which are divided into the categories of paradoxical tensions, according to van Bommel (2018). The categories include findings from management and the employees in the respective business cases. Notably, the use or change of current business models is a recurring factor that is placed in two categories and has a duality in being part of both organizing and performing, whereas a continuation of this can be found in the paradoxical tensions framework below. Which paradoxical tensions that can be identified in an organization can be divided into categories and also highlight the diverse opportunities and challenges that need to be addressed when proposing a new strategy and having sustainable transitions toward a circular economy.

For a deeper overview of the aforementioned findings, Table 2 presents a visualization where the paradoxical tensions framework by Dagilienė and Varaniūtė (2023) is used to present the results. The business cases in this research have several identified paradoxical tensions, which are divided between tensions in values or goal settings, innovation adaption degree, compliance, collaboration in networks, performance orientation and innovation adaption types, according to the framework, where the different perspectives are connected to the respective paradoxical tensions. The temporal and spatial perspectives underline the hierarchical and longitudinal occurrence of paradoxical tensions. This further highlights the national and international diversity and competition that an organization needs to work with when a new strategy is proposed, and they work with sustainable transitions toward a circular economy.

The results also indicate that there are one or more individuals in each organization, both amongst the management and the employees, who are navigating in an intermediary position, where they are managing and relaxing tensions when strains occur in the sustainable transitions toward a circular economy. Hence, the paradoxical tensions in the organization vary, as noted above. One of the businesses explains this phenomenon:

The paradoxical tensions model by Alosi et al. (2025), with its proactive and reactive elements, is used to highlight the results in this study. The additions to the paradoxical tensions model are integrating the intermediary position in the decision-making process where temporal and spatial perspectives interplay, as visualized in Figure 1, which can be found in the theoretical framework and is used for the results. Hence, the paradoxical tensions model that is presented below in Figure 5 highlights the iterations of the decision-making process in which the organization is navigating between temporal and spatial perspectives, which include the management, the employees and the intermediary position. The blue cross exemplifies when decisions are made during sustainable transitions, whereas the paradoxical tensions model offers a visualization of when an organization navigates through temporal and spatial perspectives toward a circular economy.

The aforementioned intermediary position acts as a filter or buffer in the operationalization, daily works, value chains and routines when decisions, feedback or proposals are moving top-down or bottom-up in the organization. Hence, a dimension is noted in the findings that adds a spectrum of possibilities that benefit both the management and the employees in the business cases and enable the strategy to be adapted and implemented. The individuals holding the intermediary position are noted to lead or manage team meetings, being the contact point when issues arise or taking the initiative when the daily works, value chains or routines are failing or not going according to plan in the operationalization. This is further highlighted by a business, which underlines the local and global opportunities and challenges:

From an international context, there are findings connected to the European Green Deal where the business cases have a proactive or reactive stance which creates a dichotomy, as noted previously, with a top-down and bottom-up approach that affects the business cases and creates paradoxical tensions that can be temporal or spatial. Primarily, all business cases are aware of the need to adapt when directives or regulations that are connected to the European Union are implemented. However, even if there is awareness, only one of the business cases has been proactive and acted earlier than needed on the future changes. The aforementioned business case has decided to take the lead and provide annual sustainability reports before the necessary implementation without being asked or requested by external stakeholders. The other business cases are in a position where they are aware of the European Green Deal, along with some directives and regulations, but have not acted before questions or requests are raised by external stakeholders. The reasons behind this are either a lack of resources, benchmarks or knowledge, whereas a reactive approach enables more time to adapt and compare the business to others in the industry.

Secondly, no matter if the business cases are proactive or reactive, there is also an effect coming from the business toward external stakeholders. This is related to the material, services or products that are bought or supplied, and the business cases can request certain information, indicators, measurements, assessments or parameters. By doing this, the external stakeholder either will or will not provide what is asked for, leading to more knowledge about the sustainability factors of the material, services or products, alternatively to a shift to a new external stakeholder that can provide the necessary feedback. This is related to eco-design requirements of sustainable products, where the business cases either identify new external stakeholders or broaden the current stakeholder engagement by adding new potential partners.

Subsequently, it is noted in the business cases that the findings can be both technological or nontechnological artifacts, which are connected to the already established working conditions and operations in respective businesses or within their industrial field, with no clear divide between them. The results are conceptualized in Figure 6 with a visual that highlights the dynamic interplay found in the business cases and is based on the strategic typology by Miles et al. (1978), which includes the defender, the prospector and the analyzer as types which are integral in an organization and its strategic work in an international context.

The results from the earlier section will be discussed here and reconnected to the theoretical framework to answer the research question of this research paper and present the novelty through an established theoretical lens. From the categories of paradoxical tensions, the framework with paradoxical tensions and the conceptualization of the different roles and actions, several explorations ought to be discussed that have been observed during the research. The discussion will be three-fold around sustainable transitions toward a circular economy, followed by the paradoxical tensions that have been identified and where they are occurring.

The sustainable transitions toward a circular economy, which is a practical challenge and opportunity for the business cases in this study, are rooted in the Sustainable Development Goals and the European Green Deal (European Commission: Directorate-General for Communication, 2021; UN, 2015), which is affecting decision-making and strategies that can lead to paradoxical tensions. Hernández-Chea et al. (2021) have explained that sustainable transitions can be adopted on different strategic levels, which can be noticed in the current business cases because moving toward a circular economy is the strategy input and affects the businesses top-down, whereas sustainable transitions include an interplay of different actors in the organization and the decisions, feedback and ideas are moving up and down through the business which involve the management and the employees in the organization, as noted by Miles et al. (1978). This is also offering a bottom-up approach where different temporal and spatial perspectives affect the decision-making process, in accordance with Larsson (2022), where the role of the entrepreneur is to balance risk and uncertainty to create new value opportunities (Shepherd et al., 2015). Subsequently, the decision-making process can be proactive or reactive, as outlined by Alosi et al. (2025) in their paradoxical tensions model, which further emphasizes the temporal and spatial perspectives that an organization needs to navigate through in its institutional change (Tolbert et al., 2011). This argumentation is visualized in Figure 5 in the results section, which is an adaptation and development of Figure 1 in the theoretical framework and opens up the research topic for further studies and advancements in the future to understand paradoxical tensions in sustainable transitions toward a circular economy.

In emphasizing the novelty of this study, the strategic typology of Miles et al. (1978) contributes to the conceptual framework presented in Figure 6, offering a theoretical lens to understand how strategies are implemented during sustainable transitions toward a circular economy. The authors outline three different strategic types, with the defender characteristics closely aligned with the management practices in the respective business, while solutions, policies and proposed strategies are positioned as mechanisms for future development. The employees are on the other hand linked to the prospector characteristics, where their specialization and, in some cases, long-standing experience within their respective industrial fields provide them with a competitive edge and accumulated knowledge. This aligns with Hayek (1945), when it comes to identifying uncaptured value, exploiting opportunities and being innovative, no matter if the business is a leading technological organization or has less technological capabilities. The identified intermediary position, which we label as the dynamic role in this research paper, due to its capabilities and characteristics which enable fluid, coevolutionary and innovative sustainable transitions toward a circular economy can be reconnected to the analyzer characteristics in the strategic typology, but without giving a professional or working position title to the role in itself. However, as noted by Miles et al. (1978), the analyzer characteristics are a mix of the former and they operate in a continuum between the extremes in the organization, which is very much the reality for the individuals who have taken up the intermediary position in the respective business and balances the different strategies which are proposed whilst identifying and relieving paradoxical tensions. Ultimately, the dynamic role has relevance for international entrepreneurship, as it can be pivotal in small and medium-sized enterprises, where it acts as a boundary spanner across diverse markets and regulatory contexts, aligning with Chabowski et al. (2025). By harmonizing sustainability efforts across different countries and cultures, the dynamic role can help to mitigate tensions that arise from heterogeneous international standards.

Reconnecting to the aim of this research paper, it can be noted that sustainable transitions toward a circular economy are enabled through dynamic multilevel interactions between different actors and roles. This is made possible by identifying and relieving paradoxical tensions in the business, which leads to economic, environmental and social values being considered during the sustainable transitions and offers a higher level of sustainability for the business or a shift from a linear to a circular economy. In answering the research question, we have understood that several different paradoxical tensions are identified at the same time during sustainable transitions toward a circular economy. Moreover, paradoxical tensions occur in different places in the organization, where an intermediary role is acting, managing and relaxing the tensions. Although, this research paper does not capture all aspects of paradoxical tensions, it enables a view where an intermediary is enabling sustainable transitions toward a circular economy by informal acts in the organization. The following two parts of the discussion will focus on the identifications and occurrences of paradoxical tensions to underline the contribution toward the theoretical framework and enable nuances of the answer to the research question.

We begin by identifying paradoxical tensions categories surrounding sustainability, outlined in Figure 4, and provide an overview of the business cases in this research paper. In accordance with van Bommel (2018), there are paradoxical tensions that have been divided into different categories, which highlight the goals, values, dynamics and flexibility that an organization goes through when promoting a strategy that is connected to sustainability and aims for a circular economy. This also extends into goal setting theory and the decision-making process, in accordance with Alosi et al. (2025), but also to Borchardt et al. (2024) and Brown (2021) with their focus on missions and mission-oriented innovation policies. Due to the business cases being asked to provide information regarding corporate sustainability reporting from companies that already need to report, the sustainable transitions toward a circular economy have been affected by the directive, which in turn is also leading to paradoxical tensions (Directive, 2022/2464). This is further connected to transparency and the regulation about eco-design requirements of sustainable products, where current and future suppliers are affected because set assessments or measurements are used and can create new value chains if involved stakeholders cannot comply, which leads to new opportunities and challenges (Dimitropoulos et al., 2023; Regulation, 2024/1781; Serdijn et al., 2021).

Both the management and the employees are integrated into the practices and operationalization, which the respective businesses navigate through on the journey toward circularity, where paradoxical tensions can be identified (van Bommel, 2018). Moreover, value building blocks are relevant in the results and conceptualization, and subsequently, the need for value intentions whereas the owners or managers have a mindset that is aimed toward sustainability and business models, as noted by Barth et al. (2017), is also integral in the conceptualization to capture and create economic, environmental and social value. This also aligns with international businesses and the management of the business, where ecocentric approaches can lead to developments that are not only focusing on the economic aspect of the entrepreneurship (Araujo et al., 2022; Chabowski et al., 2025). Furthermore, identifying uncaptured value is critical in the sustainable transitions toward a circular economy, where the employees offer specific knowledge and insights about the business and the value opportunities, and the management gets information that can lead to adaptations or changes to the proposed strategy. The aforementioned argumentation aligns with the identification of uncaptured value in the operationalization of sustainable business model innovation (Osmanovic et al., 2024). Subsequently, this enables the decision-making of the management because feedback loops are created with the employees who have expertise and special knowledge about the operationalization, daily works, value chains and routines in the businesses and the organization, which enables coevolution and innovation, as argued by Di Paola and Russo Spena (2021) and Endregat and Pennink (2021). However, there is also a connection to supply chain management, as noted by Cichosz et al. (2025), and its practical implications of drivers and barriers on the circular economy (De Angelis et al., 2018; Farooque et al., 2019; Lahane et al., 2020; Pillai et al., 2025). This is practically executed in the business cases by adopting the entrepreneurial mindset of the management where the behavioral, cognitive and emotional elements interplay in the decision-making process (Daspit et al., 2023; Kuratko et al., 2021; Osmanovic, 2025).

It is noted that the paradoxical tensions framework by Dagilienė and Varaniūtė (2023) offers a foundation for identifying different paradoxical tensions in this research paper, which is presented in Table 2. The framework and the identified paradoxical tensions indicate alignments, where the uniqueness of the business cases shows the variety of paradoxical tensions, where the paradoxical tensions can both be used to relieve tensions and strains and to promote the strategy. Moreover, Dagilienė and Varaniūtė (2023) divide the paradoxical tensions into different perspectives, which are temporal, spatial or both, and this enables us to view where the paradoxical tensions arise in an organization. We can outline from the results that paradoxical tensions occur in the organization among the management and employees, but with an intermediary role that enables sustainable transitions by relieving tensions and strains. The temporal and spatial divide is noted in our business cases, where some paradoxical tensions cause strains while others promote the strategy and motivate the organization. These occurrences and dimensions are managed both internally and externally by orienting and alleviating the paradoxical tensions, where top-down and bottom-up approaches interplay, in accordance with Alosi et al. (2025) and Larsson (2022). Moreover, the occurrences also relate to the iterative cycle by Locke and Latham (2002), which focuses on cognition and performance when navigating toward a set goal. Hence, individuals in respective businesses have taken up and adopted an intermediary position that enables them to navigate and integrate with both the management and the employees to identify and relieve tensions in the organization through different forums, settings and interactions. This can also be connected to the thinking, opportunity identification and the roles of paradoxes that are outlined by Daddi et al. (2019), Prashantham et al. (2018) and Waldman et al. (2019). The relationship to national and international markets is also related to the European Green Deal (European Commission: Directorate-General for Communication, 2021) along with sustainability and global value chains (Dimitropoulos et al., 2023; Serdijn et al., 2021), where the business cases can opt for a supplier within the European Union that maintains the same or a similar standard instead of keeping value chains that are spread over different jurisdictions with heterogenous standardizations.

The intermediary position has, in this research paper, been highlighted as a position of trust or confidence and gives the organization a reference point on which strategies can rely during the operationalization of the entrepreneurial process, which includes decision-making. The person or persons holding the intermediary position are sometimes referred to as the spider in the web, the doer or jack of all trades, where they navigate, integrate and moderate the perspectives of both extremes into the greater good of the business when moving toward a circular economy. The identified intermediary position in this research paper is the main novelty, and we have labeled this as the dynamic role because of its capabilities and characteristics, which lead the business forward in a fluid, coevolutionary and innovative way, which can be reconnected to technological, sustainable and international entrepreneurship, in accordance with McDougall and Oviatt (2000), Prashantham et al. (2018), Ratten (2023), Reuber et al. (2018), Rygh et al. (2022) and Zucchella et al. (2023).

To highlight the novelty and originality of this research paper, the conclusion will focus on what is new and also underline what aligns with the theoretical framework, with biases and limitations of the conducted study presented for transparency reasons.

The novelty can be found in the dynamic multilevel interactions established within a business when a new strategy is proposed, that can move the organization forward toward a circular economy by enabling and maintaining sustainable transitions in accordance with the European Green Deal (European Commission: Directorate-General for Communication, 2021), which can create new value opportunities with a higher level of sustainability than before by utilizing an intermediary. Small and medium-sized enterprises are part of a national and international context through different suppliers and value chains that demand attention to be given to several factors within and outside of the organization, which can be related to strategies and policies, but also directives and regulations (Directive, 2022/2464; Regulation, 2024/1781). The perspectives are both hierarchical and longitudinal, where different paradoxical tensions move up and down through the organization, while sustainable transitions are a constant over time for the business and are enabled by having an intermediary position that identifies and relieves paradoxical tensions. The identification of the intermediary position, highlighted as the dynamic role in this research paper, plays a key part in enabling the temporal and spatial perspectives. This reconnects with the design and implementation of sustainable business model innovation that operates across international settings toward a circular economy (Chabowski et al., 2025; Geissdoerfer et al., 2018a).

The alignment with the theoretical framework can be noticed in the different strategic levels, as argued by Hernández-Chea et al. (2021), but also in the value intentions and mindset of the leaders or management and the identification of uncaptured value, which have been outlined by Barth et al. (2017) and Osmanovic et al. (2024). Furthermore, the dynamic multilevel interactions align with the notion of coevolution and innovation, which can lead to a higher level of sustainability (Di Paola and Russo Spena, 2021; Endregat and Pennink, 2021). The paradoxical tensions framework by Dagilienė and Varaniūtė (2023) also aligns with the findings in this research paper, along with the paradoxical tensions categories surrounding sustainability by van Bommel (2018), indicating similarities in how businesses operationalize their strategic work. The paradoxical tensions model by Alosi et al. (2025), with its focus on proactive and reactive factors, is also aligned with the results in this research paper. However, we are contributing to the intermediary position between the proactive and reactive factors, which can be integrated into their model. Moreover, the different roles in respective businesses in this research paper can be linked to the strategic typology by Miles et al. (1978), with the different characteristics of the defender, the prospector and the analyzer.

The limitations of this research paper can be found in the methodological approach, where action design research can be difficult to generalize to different geographical or industrial contexts, due to the uniqueness that can exist in various regions and industries, whereas the subjectivity or objectivity of the researcher can also affect the study because of practical involvement during field visits, which affects reflexivity (Alvesson and Sköldberg, 2017; Sein et al., 2011). This has been kept in mind throughout the research process to minimize the negative effects of the limitations, but it still ought to be highlighted here for validity, reliability and replicability reasons.

This research paper can be a stepping stone for future research focusing on paradoxical tensions in sustainable transitions toward a circular economy, whereas both the novelties and other parts of the theoretical framework can be further studied. The identified dynamic role with multilevel interactions is a topic of interest in this research paper and demands more academic attention, which can lead to new and developed practical or theoretical implications in the future. This can be done by further adding a layer of technological, sustainable or international entrepreneurship, alternatively by focusing on certain geographical locations, such as the countries that are affected by the European Green Deal, which focuses on businesses that have connections across national borders (European Commission: Directorate-General for Communication, 2021; Prashantham et al., 2018; Reuber et al., 2018; Rygh et al., 2022). Figure 6 can be used as a starting point in the proposed research suggestion and eventually be adapted, changed or updated with new empirical data.

Moreover, the theoretical framework highlights business models as a concept that can enable sustainable transitions toward a circular economy, which can be noted by Bocken et al. (2016), Corvellec et al. (2022), Geissdoerfer et al. (2018a), Lahane et al. (2020) and Nosratabadi et al. (2019), where the strategies chosen by the businesses in this research paper have shown interest in the use or change of current business models, which demand further attention. Hence, the influence of business models as a practical implication and tool for sustainable transitions toward a circular economy can be of interest to future research with a focus on business models developed for national or international markets, where the business models could be sustainable, circular or have innovative elements.

To summarize, there are possibilities and opportunities to both continue research from the novelty in this research paper and by resuming to study aspects of the already established theoretical framework, which demands more academic attention, to have a sustainable development.

The authors acknowledge Pontus Lindström at TEK Kompetens and the project Industry in West for enabling this research.