Multi-stakeholder social economy organizations and the circular economy

The transition to a circular economy, defined as an economic system designed to decouple value creation from the consumption of finite resources, through regenerative and restorative production and consumption models that minimize environmental degradation, is one of the most significant challenges facing autopoietic organizations today (Kirchherr et al., 2017). By challenging linear models of production and consumption based on extraction, use and disposal, the circular economy operates as an environmental irritation that demands systemic transformations in the way decision-making communication is organised, managed and evaluated. Beyond technological innovation and regulatory changes, this transition requires organisations to reconfigure their internal decision premises, such as decision programmes, governance structures, and communication channels, particularly when ecological demands must be structurally coupled with social inclusion and economic viability (Nygaard, 2022).

Circular economy research often focuses on for-profit firms, technologies and policy instruments, alongside how organizations internally translate environmental requirements into governance-level stakeholder engagement. Luhmann's social systems theory (SST; 1989; 1995, 2018), on the other hand, deepens our understanding of how circular economy goals become organizationally decidable via decision programmes, understood as conditional or purposive premises that stabilize decision-making communication amidst stakeholder interactions and regulatory conditions (Aal, 2022). Within this perspective, ecological requirements never enter organizations as objective “facts” but as communicative constructs requiring translation into decision premises. Circular economy objectives thus operate as internally stabilized decision programmes rather than as external constraints (Waring and Liyanage, 2026). As autopoietic systems of decision-making communication, organizations recursively reproduce themselves by linking decisions to past decisions (Luhmann, 1995, 2018). Rather than autonomous acts of will or individual preference aggregations, decisions are communicative events conditioned by sedimented structures that make specific choices probable (Valentinov et al., 2021; Valentinov et al., 2019).

From this perspective, ecological challenges and environmental problems acquire social relevance only insofar as they are communicated and processed within organizations as social systems. Sustainability and circular economy objectives can influence organizational operations only when they are transformed into decision premises that orient subsequent decisions, such as programmes, procedures, and governance arrangements (Neisig, 2022; Valentinov and Roth, 2024; Tortia, 2025). In this article, organizations' capacity to contribute to environmental sustainability is understood as resting on the stabilization of decision premises that structure decision programmes and reproduce expectations over time. These sedimented structures increase the probability and legitimacy of sustainability-oriented decisions while enabling organizations to manage trade-offs among ecological sustainability, social inclusion and long-term resilience (Settembre-Blundo et al., 2021; Head, 2022; Jalonen and Uusikylä, 2025).

In accordance with Niklas Luhmann's SST, multi-stakeholder social economy organizations (SEOs) establish their operational boundaries by transforming the fundamental distinction between members and non-members into a primary decision premise that pre-selects who can legitimately participate in internal communication. Rather than treating this boundary as a rigid, exclusionary barrier, these organizations utilize it as a complexity-processing filter through which heterogeneous ecological irritations and external sustainability demands are selectively converted into internally decidable, reproducible circular economy programmes, thereby maintaining the system's autopoietic closure while enhancing its long-term adaptive capacity.

This article examines how decision programmes, as specialized decision premises, translate and consolidate circular economy objectives within SEOs featuring explicit social missions, profit distribution constraints and multi-stakeholder governance involving workers, users, communities and public authorities (Campi et al., 2006; Vidal, 2013, 2014). Within SEOs, democratic participation can increase communicative complexity and internal friction, raising coordination costs and reducing short-term efficiency due to coexisting stakeholder expectations and heterogeneous functional orientations (Hansmann, 1988, 1996). However, participation yields structural complementarities, such as legitimacy, adaptive resilience, resilience and long-term sustainability, by expanding the system's capacity for uncertainty absorption, unobtainable in conventional organizational forms. From a Luhmannian perspective, these tensions represent not mere governance failures, but rather generative conditions for the system's internal elaboration of structural compromises and second-order programmes among diverse functional orientations, particularly regarding ecological sustainability, social inclusion and economic viability.

Compromises provide the framework through which decision-making, via filtering, deferral, compartmentalization, revision and routine reprogramming, functions despite normative plurality. These compromises, trade-offs and second-order programmes foster adaptive, resilient multi-stakeholder governance by internalizing systemic externalities, including conflict costs (cf. The concept of multifunctional tetralemma in Roth and Shedleski, 2026; Roth and Valentinov, 2026). Participatory governance institutionalizes decision premises that differentiate repeatable decision-making and second-order programmes for arbitration, conflict reduction, co-determination, co-production and sanctioning (Tortia, 2026; Valentinov et al., 2026). Ultimately, robust stakeholder interaction enhances adaptive capacity through the internal absorption of environmental complexity (e.g. absorbing NIMBY tensions), structurally ingraining circular economy objectives into governance architectures and routines rather than isolating them as mere technological or managerial innovations (Díaz López et al., 2023).

Drawing on Luhmannian social systems and organization theory, this paper redescribes complex adaptive governance, the social economy and stakeholder participation through decision programming rather than treating them as parallel theoretical pillars. This conceptual shift renders the differentiation of circular economy decision programmes observable, consequential and structurally decidable at the organizational level. Applying a framework based on decision premises, autopoietic communication, ecological irritations and second-order programmes to hybrid, non-profit-maximizing organizations fills a literature gap regarding systemic theoretical applications to the circular economy. Rather than treating sustainability as target-implementation or innovation diffusion, this approach shows how ecological demands are processed via specialized decision programmes that govern self-referential organizational reproduction (van Assche et al., 2014; van Assche et al., 2022; Iliopoulos and Hendrikse, 2009).

Examples given in the discussion section illustrate how circular economy decision premises institutionalize repeatable ecological communication and structures for second-order observation. This occurs when conditional programmes restructure procurement rules, reporting routines, arbitration procedures and member decision-making rights. Governance committees, environmental statements, ethical codes and sustainability accounting represent autopoietic, self-referential structures differentiated to process structural couplings triggered by environmental irritations driving ecological transitions. The study specifically analyses member-owned agricultural cooperatives since, within the social economy, these marketing, processing and production cooperatives exert the greatest environmental impact and present precisely those challenges relating to governance programmes, stakeholder decision-making and structural stability challenges that are recursively linked to circular economy processes and are, in turn, transformed by them (Iliopoulos and Cook, 1999; Iliopoulos and Hendrikse, 2009).

Based on these premises, the main research questions are formulated as follows: (1) how circular economy objectives can become decidable through their encoding into conditional and purposive programmes (strategies, governance rules, reporting practices), enabling autopoietic self-referential decision-making without external determination, (2) how multi-stakeholder governance acts as a generative mechanism that internalizes heterogeneous expectations as operative decision premises through structural coupling, with governance structures emerging recursively alongside programmes, (3) how to reframe the tensions between democratic participation and circular economy objectives as structurally complementary: participatory complexity fuels the formation of second-order programmes and sustains long-term adaptive capacity, thereby making resilience a process of continuous autopoietic programme reproduction rather than an equilibrium state.

Section 2 introduces Luhmann's theory of ecological communication and decision programmes, followed by a literature review on the circular economy and multi-stakeholder governance (Section 3). Sections 4 and 5 conceptualize the framework of analysis, linking environmental irritations to decision programming and multi-stakeholder self-organization, which is then applied to agricultural cooperatives (Section 6) before concluding with managerial and policy implications, and limitations that point towards future research developments (Section 7).

Niklas Luhmann's social systems theory offers a distinctive approach to analyzing the relationship between organizations and their environment. Modern society is understood as functionally differentiated into relatively autonomous systems, such as the economy, politics, law, science and education, each of which operates according to its own binary code and communicative logic (Luhmann, 1995; Mingers, 2002). Organizations do not belong exclusively to a single functional system but operate as structurally coupled systems that selectively process expectations from multiple social domains (Gren and Zierhofer, 2003).

In Ecological Communication, Luhmann (1989) famously argued that ecological problems do not directly constrain social systems. Nature does not “communicate” with society; rather, ecological issues become socially relevant only through communication within social systems, particularly science, politics, law and economics (Hall et al., 2017). For organizations, this means that environmental sustainability is not an external imperative that authoritatively determines behaviour, but a communicative construct that must be translated into decision premises and decision programmes (Newig et al., 2013).

In Organization and Decision (Luhmann, 2018), organizations are autopoietic systems composed exclusively of decisions. As structural constraints pre-selecting the horizon of possibility, decision premises channel the autopoietic reproduction of the organizational system by recursively linking past selections to future operations. Consequently, decisions do not occur in isolation; they are operationally closed communicative events conditioned by crystallized premises, such as conditional or purposive programmes, communication channels and personnel structures. These premises absorb uncertainty and stabilize the system's self-referential processing amidst overwhelming environmental complexity and irritations (Aal, 2022).

While conditional programming looks backward at established facts (if the input matches the criteria, the output is predetermined) to stabilize expectations and ensure legal or bureaucratic consistency, purposive programming looks forward and allows learning to achieve a desired state. In the context of ecological sustainability, programmes serve as mechanisms through which organizations translate widespread environmental concerns into operational decision-making criteria (Grothe-Hammer and Berthod, 2016).

The circular economy introduces highly complex, uncoordinated environmental irritations into organizational communication. Manifesting as resource scarcity, climate change and ecosystem degradation, these ecological perturbations lack inherent communicative capacity, requiring translation into manageable decision premises to become actionable. Only by converting these external noises into internal structures can autopoietic systems process uncertainty and stabilize sustainability-oriented operations (Iacovidou et al., 2021; Abu-Bakar and Charnley, 2024).

Shifting away from a normative adoption, this systemic-theoretical approach examines how circular practices become decidable and reproducible within the self-referential communication of SEOs (Bertassini et al., 2021; de Oliveira Vieira and Guarnieri, 2025; Otasowie et al., 2025), where ecological irritations intersect with existing social-distributive structures (Campagnaro and D'Urzo, 2021). Within these autopoietic systems, conditional and purposive programmes, such as environmental reporting or ethical procurement, operate as structural mechanisms linking ecological sustainability with stakeholder expectations. Rather than eliminating internal conflict, these programmes absorb uncertainty by providing a structured context for recursive communication (Otasowie et al., 2025; Díaz López et al., 2023).

Building on earlier foundational contributions (Shrivastava, 1995), recent literature on organization and management rethinks ecological transformation, shifting the circular economy from a model of technological innovation towards a broader issue of governance, characterized by institutional complexity and systemic resilience (Bertassini et al., 2021; Díaz López et al., 2023; Abu-Bakar and Charnley, 2024). This paradigm shift reflects a wider movement in management studies toward complexity-informed approaches capable of addressing the interdependence between ecological sustainability, organizational adaptation and social legitimacy (Valentinov, 2021). Within this field, contemporary stakeholder theory conceptualizes organizations as embedded governance systems tasked with balancing heterogeneous expectations, conflicting temporal horizons and multiple dimensions of value creation (Blomberg et al., 2023; Neisig, 2024; Roth and Shedleski, 2026; Roth and Valentinov, 2026; Valentinov et al., 2026). Consequently, circular transitions depend on an organization's capacity to establish communicative structures that couple actors operating under different functional logics, including economic, political, scientific and community-based systems (MacDonald et al., 2022; DasGupta and Roy, 2023). Similarly, research on SEOs and cooperatives highlights that participatory governance increases internal complexity while simultaneously strengthening resilience, legitimacy and long-term adaptive capacity (Tortia and Troisi, 2021; Lund and Novkovic, 2023; Michaud and Audebrand, 2022).

Concurrently, sustainability literature increasingly adopts systems-based perspectives, arguing that circular transitions emerge from recursive interactions between organizations and their institutional, ecological and social environments (Iacovidou et al., 2021; Jalonen and Uusikylä, 2025). In this context, adaptive governance and organizational resilience are understood less as static equilibrium conditions than as ongoing processes of systemic adaptation under ecological pressure and uncertainty (Hofmann and Jaeger-Erben, 2020; Victoravich et al., 2023; Otasowie et al., 2025). This shift underscores the need for organizations to develop internal capacities for learning and recursive adjustment, rather than relying exclusively on centralized optimization models (Head, 2022; Jalonen and Uusikylä, 2025).

While recent studies have begun to explore the relevance of complexity approaches to sustainability transitions (Neisig, 2022; Miller, 2023; de Oliveira Vieira and Guarnieri, 2025), there is a lack of the systematic application of Luhmann's concepts of ecological communication, autopoiesis, structural coupling and decision programmes to the organizational governance of the circular economy in SEOs, especially concerning how ecological requirements become internally processable and organizationally decidable within the self-referential communication structures that stabilize sustainability-oriented governance arrangements as durable organizational decision premises (Waring and Liyanage, 2026). Much of the literature examines stakeholder engagement and circular economy transitions primarily through normative or resource-based lenses, treating organizations either as arenas for negotiating interests or as structures responding strategically to external pressures (Valentinov et al., 2019; Rendtorff, 2024; Valentinov and Schultz, 2025).

In research on SEOs, although cooperatives and social enterprises are recognized as compatible with sustainability transitions due to their participatory governance and territorial embeddedness, the mechanisms by which these characteristics translate into operational decision structures remain theoretically underdeveloped (Tortia and Troisi, 2021; Tortia, 2026). Existing studies often describe stakeholder participation as normatively desirable without fully explaining how participatory complexity translates into repeatable organizational programmes, governance routines and communication structures capable of stabilizing sustainability-oriented decisions under uncertainty and conflict (Sacchetti and Borzaga, 2021; Hannachi et al., 2020).

The article therefore contributes to the literature in a few original ways. First, it reframes the circular economy as a problem of organizational communication and programmability rather than merely one of technological innovation or external compliance. Ecological sustainability becomes organizationally relevant only when translated into internal decision premises capable of guiding future decisions recursively. Second, the article reconceptualizes stakeholder participation not primarily as a normative democratic principle but as a structural mechanism for increasing communicative density and expanding the organization's repertoire of decision programmes. Participatory governance thereby functions as a complexity-processing mechanism that enables organizations to internalize heterogeneous ecological and social expectations. Third, contributing to debates on adaptive governance, this study reframes organizational resilience as the recursive reproduction and revision of decision programmes under environmental irritations, rather than static equilibrium. Consequently, internal conflicts, coordination costs and governance tensions are not pathologies, but constitutive disruptions stimulating second-order programmes like arbitration and sustainability accounting. Finally, this article advances social economy literature by demonstrating how multi-stakeholder governance architectures offer structural advantages for processing ecological complexity. These structures allow environmental sustainability, social inclusion and economic continuity to functionally coexist within a single autopoietic system through the recursive stabilization of sustainability-oriented decision premises.

By connecting stakeholder theory, adaptive governance, circular economy research and Luhmann's systems theory, the article thus develops an original conceptual framework capable of explaining how circular economy objectives become communicatively stabilized, organizationally reproducible and institutionally durable within SEOs (Settembre-Blundo et al., 2021).

In Luhmann's Organization and Decision (2018), whilst decision programmes are themselves a type of decision premise alongside personnel and communication channels, decision premises are the most fundamental category that preselects and limits decision programmes. Decision programmes are operational, rule-like crystallizations, a formalized subset of decision premises through which premises become operative orientations for sequential decision-making within autopoietic communication flows.

Within SEOs, adaptive governance is a mode of complexity management grounded in the recursive production of organizational decisions. SEOs constitute self-organized networks of heterogeneous social actors representing unique localized interests (Sharma-Wallace et al., 2018; DasGupta and Roy, 2023). Rather than emerging from central coordination or autonomous acts of individual will, adaptive governance arises from the differentiation and structural coupling of decision programmes that orient operations without determining specific outcomes (Lovan et al., 2017; Luhmann, 1995, 2018). Participatory and deliberative governance increases the density of communication within the system's boundaries, enabling programmes to selectively link decisions and absorb uncertainty (Wagenaar, 2007). Consequently, the prior stabilization of stakeholders' heterogeneous expectations as legitimate decision premises establishes the framework upon which specialized decision programmes, including organizational routines (Nelson and Winter, 1982), can emerge, consolidate and recursively reproduce the system's autopoietic communication flows (van Assche et al., 2014).

In this context, stakeholder self-organization is understood in terms of autopoietic systems that reproduce themselves through recursive decision communication. Self-organization does not primarily denote decentralized action per se, but rather the progressive stabilization of heterogeneous expectations as decision premises within organizational boundaries (Hahn and Nykvist, 2017; van Assche et al., 2022). Adaptive governance functions by selectively reducing complexity while preserving the system's structural coupling to environmental irritations, developing routines that absorb uncertainty under radical environmental fluctuations (Boyle et al., 2001; Dietz et al., 2003; Folke et al., 2005; Victoravich et al., 2023). By formalizing restricted control parameters, this governance architecture promotes systemic homoeostasis, balancing self-referential production against the natural and social environments through stabilized operational trade-offs (Mukerjee, 1966; Roth and Valentinov, 2020).

Systemic resilience is generated by the capacity of decision programmes to absorb environmental disturbances, reorganize internal communication and maintain autopoietic reproduction (Crocker, 2007; Folke et al., 2005; Lampel et al., 2014). Small-scale adaptive mechanisms, anchored in decision premises and routines, manage complexity within organizational boundaries (van Assche et al., 2022; Tortia and Troisi, 2021). Order emerges through self-organization and autopoiesis as subsystems adapt to mutual perturbations via recursive trial and error (Prigogine and Stengers, 1984; Luhmann, 1989, 1995, 2018; Hall et al., 2017; Roth and Valentinov, 2020; Valentinov et al., 2021). Arising from replicated programmes and recursive communication, routines stabilize expectations and absorb uncertainty without deliberation, embedding operations into organizational memory (Nelson and Winter, 1982). Conversely, innovation modifies or replaces existing programmes, transforming decision premises to meet new functional demands (Nelson and Winter, 1982; Hodgson, 2003; Witt, 2011; Foss et al., 2012; Díaz López et al., 2023).

In SEOs, social and organizational innovations are shaped to address social and, in perspective, also environmental and sustainability problems through collaboration with like-minded stakeholders, civil society organizations, local businesses and higher education and research (Tortia et al., 2020; Díaz López et al., 2023). Horizontal interaction builds effective coordination capacities through collective action and local roots, extending adaptation and resilience toward environmentally sustainable goals (Tortia, 2025). The emergence of dedicated decision programmes makes it possible to combine organizational objectives with task-dependent constraints and local interactions, enabling the development of more suitable interconnected routines (Garcia-Valdecasas, 2022; Foster and Metcalfe, 2012; Matthies et al., 2019; Bellandi et al., 2021). Emergent properties result from causally cumulative processes and irritations at different institutional levels, while different initial conditions reinforce idiosyncratic path-dependence, as positive and negative feedback becomes embedded in organizational history (Kapp, 1976; Antonelli, 1997).

As complex systems, organizations can feature incomplete connectivity where localized interactions dominate, triggering divergent operational paths, conflicts and internal disputes (Tortia and Troisi, 2021). These complex stakeholder interactions can delay structural adaptation, encourage opportunistic behavior and complicate deliberation, elevating coordination costs (Hansmann, 1996). Furthermore, multiplying decision premises breeds second-order coordination problems. To manage the systemic tensions generated by high participatory communication density, inclusive governance structures in SEOs must differentiate second-order decision programmes, such as arbitration, incentive routines and sanctions (Ostrom, 1990; Papadopoulos and Warin, 2007; Tortia et al., 2020; Valentinov, 2015), as spelled out in the following sections.

Although organizations in which more than one stakeholder actively participates in governance remain a limited phenomenon, they are more widespread in the social economy than in traditional economic activities, a fact that is directly linked to their need and ability to achieve social and environmental goals (Leviten-Reid and Fairbairn, 2011; Michaud and Audebrand, 2022; Sacchetti and Birchall, 2018; Lund and Novkovic, 2023). From the perspective of Luhmann's theory of organization, multi-stakeholder cooperatives and social enterprises can be conceptualized as decision-making systems that institutionalize a plurality of decision premises through governance structures (Luhmann, 2018; Tortia, 2026). Compared to traditional firms, SOEs more frequently stabilize heterogeneous stakeholder expectations as legitimate premises for decisions, thereby expanding the organization's decision programmes repertoire (Zoppelletto, 2024).

When environmental sustainability is formalized as a goal programme, it selectively orients organizational communication without prescribing concrete outcomes (Luhmann, 1989, 2018). Autonomous self-organization and self-positioning of stakeholders in governance can internalize heterogeneous stakeholder expectations as operative decision premises, self-reinforcing feedback mechanisms that reduce complexity and support enhanced adaptive capacity (resilience) through internal programme revision (Luhmann, 1989, 1995, 2018; Anzola et al., 2017; Tortia, 2026). Those stakeholders most sensitive to these sustainability goals are expected to assume a leadership role. In energy communities, for instance, users are expected to lead cooperatives producing and distributing renewable energy (Capellán-Pérez et al., 2018). Leadership thus emerges as a systemic effect of the alignment between goal programmes and ecological communication, rather than as a function of individual authority and initiative.

Production processes in SEOs can generate negative environmental externalities that run counter to sustainability objectives. The “not in my backyard” (NIMBY) problem is partially mitigated because the local embedding of members across the system's operational boundary increases sensitivity to internal and external environmental costs (Sacchetti and Borzaga, 2021; Ellerman and Gonza, 2019). During ecological transitions, the heightened internal complexity generated by multi-stakeholder governance enhances adaptive capacity, allowing the autopoietic system to process environmental irritations through internally differentiated decision programmes (Luhmann, 1989, 1995, 2018). Ecological disruptions are thus translated into decision-relevant communication and handled via revised conditional programmes. When multiple stakeholders share control, second-order structures, such as arbitration, joint decision-making and conflict-resolution committees, emerge as auxiliary decision programmes designed to absorb uncertainty under competing premises (Ostrom, 1990; Rupasingha et al., 1999; MacDonald et al., 2022).

The recursive stabilization of decision programmes functions as an internal complexity-reduction mechanism, narrowing the range of acceptable choices to make organizational communication selective and reliable without external optimization. The structural coupling of heterogeneous stakeholder expectations within dense communication flows progressively consolidates sustainability-oriented decision premises, rendering circular economy objectives organizationally decidable and reproducible (Edelenbos et al., 2018). This high communicative density couples ecological, social and economic functional orientations into open-ended organizational processes without fixed equilibrium states (Valentinov et al., 2021; Tortia and Troisi, 2021; Valentinov and Roth, 2024). Sustainability emerges through the continuous autopoietic reproduction and selective revision of decision programmes under environmental irritations (Luhmann, 2018). Adaptive capacity and resilience replace optimization as operative criteria, while institutionalized premises constrain future choices to prevent opportunistic deviations (Ostrom, 1990; Ruzavin, 1994; van Assche et al., 2014; Hannachi et al., 2020; Tortia and Troisi, 2021).

SEOs involving various stakeholders can also achieve sustainability goals through co-production and co-creation, which require the interaction of different social groups within decision programmes and provide solutions to planning, implementation and realization needs (Newig et al., 2013; Miller, 2023). Although the needs of customers, users and communities do not always align with sustainability objectives, the explicit integration of the latter into decision programmes can serve as a structural foundation for organizational communication (Pestoff, 2012, 2020), which combines top-down directives and planning with the active participation of stakeholders (Blandi, 2018; Jalonen et al., 2020).

Social economy organizations are known for their strong roots in local communities and regions. Members or employees are deeply embedded in the local context and bear both the benefits and the direct costs of the economic activities they carry out (Ellerman and Gonza, 2019). Relatedly, since SEOs are mostly labour-intensive, human capital is their most important resource, making them particularly well suited to job creation at the community level (Pérotin, 2013). From a Luhmannian perspective, this territorial embeddedness does not function primarily as a normative virtue but as a structural condition for communication, enabling organizations to transform environmental complexity into internally decidable alternatives (Luhmann, 1989, 2018; Strongman, 2012; Miller, 2023; de Oliveira Vieira and Guarnieri, 2025; Otasowie et al., 2025). Territorial embeddedness establishes trust-based relational contexts (Granovetter, 1973), accumulating local social capital while minimizing transaction costs and institutional inefficiencies (Sabatini et al., 2014). Consequently, trust and relational intensity function as informal decision premises that reduce systemic uncertainty and coordination costs, facilitating the autopoietic routinization of closed-loop decision programmes under conditions of bounded rationality (De Bernardi et al., 2023).

Decision programmes as premises for the formation of organizational routines and governance rules play a central role in this process. Community cooperative and social cooperative models, developed across several countries including Belgium, Italy, France and Spain, instantiate this logic through formalized decision premises, whose autopoietic reproducibility does not depend on individual intentions or external mandates but on the recursive self-reproduction of the organisation's decision-making communication (Barna et al., 2023; Lund and Novkovic, 2023).

In the absence of collective decision premises stabilizing stakeholder expectations through involvement in governance, the communicative complexity generated by heterogeneous functional orientations (social, ecological and economic) would risk exceeding the organisation's internal capacity for self-regulation, reducing the probability that sustainability-oriented programmes will consolidate and reproduce themselves over time (Ostrom, 1990; Sacchetti and Borzaga, 2021). In Luhmann's (2018) framework, organizational routines and governance architectures structurally couple heterogeneous stakeholder expectations as decision premises. This transforms participatory complexity from communicative overload into a generative condition for the recursive production of adaptive capacity within autopoietic decision-making flows.

Through this relational context, SEOs develop decision programmes tailored to circular environmental renewal. Strong relational intensity generates relational capital, driving social capital production and trust-based capacity (Sabatini et al., 2014; Tortia et al., 2020; Rendtorff, 2024). By institutionalizing this intensity within organizational boundaries through autopoietic communication flows, the system codifies environmental complexity, stabilizing comprehensive decision programmes oriented toward circular economy goals.

Organizational decision programmes specify which environmental irritations, such as waste, resource scarcity and emissions, are recognized as relevant and how they are translated into binding decisions. Stakeholder participation thus functions as a programmatic mechanism, compensating for contractual incompleteness by internalizing coordination through communication rather than market exchange (Miller, 2023). The autonomous draughting of environmental statements or codes of ethics, though not legally required and binding, can account for environmentally sensitive transactions with all key stakeholders, contributing to an environmental balance sheet as a decision programme instrument. In line with Luhmann's concept of “ecological communication”, these programmes do not definitively solve environmental problems, but rather institutionalize the organisation's capacity to make decisions on ecological issues, thereby enabling the production of collective goods (e.g. renewable energy generation) and the use of natural resources as common goods (hydroelectric power generation) relevant to the circular economy for sustainable development in the context of community commons (Bertassini et al., 2021; Miller, 2023).

The application of Luhmann's theoretical framework to agricultural cooperatives with a high environmental impact reveals how their mutualist structure, defined by collective ownership, democratic governance and member-benefit priority, functions as a foundational decision premise. In neo-institutional terms, the property rights and inherent frictions of this mutualist design (e.g. free-riding, time horizons, portfolio effects) constitute the primary structural condition shaping all subsequent organizational operations (Hansmann, 1996; Valentinov, 2007; Tortia, 2018). Rather than just external constraints, this governance architecture serves as a systemic condition of possibility that absorbs environmental irritation and preselects viable decision paths through personnel, programmes and communication channels (Cook, 1995, 2018; Chaddad and Iliopoulos, 2013; Grashuis and Su, 2019).

In Luhmannian terms, mutualistic governance acts as a structural coupling mechanism that stabilizes expectations regarding communication legitimacy, acceptable outcomes and permissible decision programmes, thereby steering organizational autopoiesis. Consequently, this mutualist structure serves as a foundational decision premise, conditioning the organizational environment before specific programmes are formulated. It delimits the space of viable alternatives, allowing collective benefits, equitable distribution, or sustainability objectives to emerge as operational crystallizations in conditional or purposive programming. This governance architecture thus functions as a systemic condition of possibility for sustainability-oriented, multi-stakeholder decision programmes (Fonte and Cucco, 2017; Grashuis and Su, 2019).

By pre-shaping the horizon of admissible alternatives, mutualistic autopoietic systems constitute generative decision premises within agriculture. The spatial and temporal proximity between farming and the physical ecosystem functions as structural coupling that increases the likelihood of environmental degradation being registered as a system-internal irritation. In Luhmannian terms (1989), such ecological irritations cannot directly determine organizational behaviour; instead, they must be translated into internally decidable alternatives and stabilized as decision premises oriented toward circular economy objectives through the recursive reproduction of decisions within the cooperative's boundaries. Consequently, differing ownership and control configurations generate distinct structural conditions for this process of irritation recognition and premise stabilization, as evidenced by cooperative governance literature (Chaddad and Cook, 2004; Chaddad and Iliopoulos, 2013).

The reuse of agricultural residues, organic waste and wastewater constitutes an environmental irritation. Once processed within the cooperative's communication system, it triggers conditional programmes regulating resource flows and purposive programmes targeting closed-loop production, biomass energy self-sufficiency, or minimized external dependencies (Jokila, 2025). The mutualistic premise is generative because the structural coupling between member-borne ecological degradation costs and governance channels reduces the complexity of translating external irritations into internally decidable alternatives. By constraining the decision space, this premise increases the probability of sustainability-oriented programmes, stabilizing the recursive reproduction of circular economy decision premises through the system's autopoietic communication (Bijman et al., 2013; Deng et al., 2021; Cechin et al., 2013).

The mutualistic ownership configuration establishes decision premises that constrain the decision horizon, rendering sustainability-oriented programmes more communicatively accessible than in investor-owned firms, where the code of capital return systematically minimizes ecological concerns (Jokila, 2025). Rather than aligning individual motivations, this structural variation pre-selects communicatively admissible alternatives; the mutualistic premise increases the probability of circular economy programmes by reducing the system's internal complexity (Luhmann, 2018). Furthermore, the internal differentiation of decision rights between boards and management determines the sequence and organizational admissibility of communication (Bijman et al., 2013). This allocation shapes the structural conditions under which circular economy programmes can be formulated and recursively reproduced as autopoietic decisions.

Different ownership configurations establish distinct horizons of admissible alternatives (Hart and Moore, 1996; Chaddad and Cook, 2004), serving as foundational decision premises that structurally couple the economic system with the organization. Socializing capital via indivisible collective reserves creates a structural condition that excludes distributional alternatives from the decision horizon; this reduces internal complexity and conflict from competing member expectations, stabilizing long-term circular economy programmes (Tortia, 2018). By constraining the space of admissible communication, collective reserves secure the temporal continuity of organizational operations and enhance the probability of recursive programme reproduction (Deng et al., 2021). Trust and relational density, functioning as informal decision premises, further absorb uncertainty when stabilizing heterogeneous member expectations. However, organizational growth and heightened internal complexity can erode these informal premises, exerting structural pressure to formalize decision premises through explicit programmes, governance rules and communication channels (Nilsson et al., 2012).

Conversely, members' private land ownership establishes a decision premise that structurally couples the cooperative with its physical environment, making long-term ecological sensitivity organizationally probable. This framework ensures that environmental degradation, soil depletion and water scarcity are registered as system-internal irritations and translated into sustainability-oriented programmes, rather than being excluded as noise. This configuration differs systematically from investor-owned firms, where the economic code of capital return establishes decision premises that may downplay ecological considerations. Consequently, combining private land ownership, socialized capital and mutualistic governance gives rise to a distinctive architecture of decision premises that increases the likelihood of ecological irritations being translated into circular economy programmes (Iliopoulos and Cook, 1999; Cook, 1995; Valentinov, 2007).

As organizations process internal complexity generated by their own first-order decision premises, auxiliary second-order decision programmes, such as environmental accounting, certification and waste-valorization agreements, are recursively produced. Rather than resolving structural tensions between competing member interests, these meta-level premises stabilize internal communication paths, ensuring the system's autopoietic reproduction despite persistent contradictions between circular economy logics and linear production cycles. Iliopoulos and Hendrikse (2009) provide empirical evidence that influence costs from conflicting interests generate governance costs requiring precisely this type of auxiliary programmatic coordination. Furthermore, member-based governance structures operate as structural coupling communication channels that achieve progressive stabilization via recursive decision communication. This enables the organization to selectively process environmental irritations, including competitive and regulatory pressures, into internally decidable alternatives, as Bijman et al. (2014) document for EU cooperatives.

The following sequences illustrate how Luhmann's (1989) theory of ecological communication and decision premises applies to four concrete organizational instruments, showing how environmental irritations are translated into stable, repeatable decision premises within social systems.

Environmental statement. Irritation: Rising water consumption in processing facilities triggers system-internal resonance via farmer-member complaints regarding irrigation capacity (Newig et al., 2013). Communication: The board translates this irritation into decision-relevant communication, initiating an internal audit. Premise: The organization adopts a formal environmental statement, establishing a decision premise that restricts the horizon of future operational possibilities. Repeatability: Annual reviews become a conditional programme; exceeding consumption thresholds automatically activates predefined corrective procedures, eliminating the need for new decision communication (Settembre-Blundo et al., 2021).

Code of ethics. Irritation: A supplier's prohibited chemical inputs generate environmental perturbations that threaten the organization's structural coupling with its relevant public (Ostrom, 1990). Communication: The governance committee processes the irritation as a communication-relevant ethical conflict, initiating a supplier review. Premise: A code of ethics formalizes binding procurement conditions, operating as a structural restriction on future choice. Repeatability: This code functions as a conditional programme embedded in standard routines, executing automatic supplier exclusion upon criteria violation without ad hoc deliberation (Iliopoulos and Hendrikse, 2009).

Sustainability accounting. Irritation: External regulatory pressures regarding emissions and waste penetrate the organization's operational closure as noise. Communication: Management observes this noise, translating regulatory requirements into an internal governance agenda (Grothe-Hammer and Berthod, 2016). Premise: A sustainability balance sheet is adopted as a purposive programme, binding the system to specific circular economy and resource objectives (Bertassini et al., 2021). Repeatability: Quarterly reporting cycles institutionalize second-order programmes, making deviations from targets automatically decision-relevant for subsequent operational cycles (Valentinov et al., 2021).

Governance committee. Irritation: Biofuel investment costs cause internal conflict, threatening to paralyze the system's autopoiesis. Communication: Disputes are channelled into a dedicated environmental governance committee, functionally differentiating ecological communication from routine operational management (Bijman et al., 2013). Premise: Committee arbitration procedures are formalized as decision premises that absorb the uncertainty of conflicting expectations. Repeatability: Standardized protocols ensure future investment conflicts recursively activate the same procedural sequence, stabilizing expectations and transforming undecidable alternatives into routine operations (Hannachi et al., 2020).

This article examined the role of social economy organizations in the development of the circular economy by adopting a social systems theory perspective inspired by Niklas Luhmann, with a particular emphasis on decision programmes as stabilized organizational premises of decision-making. Rather than treating the circular economy as a set of externally imposed constraints or regulatory prescriptions, the analysis conceptualized transitions to sustainability as endogenous organizational processes based on communication, programme formation, stakeholder interaction and recursive decision-making. Given the diversity of theories involved in this study, emphasis has been placed on programmes as the primary analytical concept and governance as its empirical and managerial counterpart.

The findings contribute to recent management debates on stakeholder engagement, adaptive governance, organizational resilience and complexity-informed sustainability transitions. Contemporary management theory increasingly interprets organizations not as mechanically controllable entities pursuing single objectives, but as adaptive governance systems required to process heterogeneous stakeholder expectations, ecological uncertainty, and institutional complexity simultaneously. In line with these recent theoretical developments, the present study shows that circular economy transitions cannot be understood solely as technological innovations or strategic responses to environmental pressures. Rather, they depend on the organization's capacity to transform ecological and social demands into internally reproducible decision premises capable of guiding future organizational behaviour over time.

Multistakeholder governance, understood as an emergent and self-referential process unfolding within operational closure, rather than as the application of a pre-established governance blueprint, has therefore been interpreted in terms of self-organization, adaptive governance, and resilience (Tortia, 2025), representing an empirical translation of Luhmann's concepts of programme differentiation, structural coupling and second-order auxiliary programmes such as arbitration, sanctions, monitoring systems and conflict-resolution procedures (Luhmann, 2018). From this perspective, multistakeholder governance does not “cause” circularity in a linear or deterministic manner. Rather, it modifies the structural conditions within which organizational communication occurs by increasing the density, diversity and recursive stabilization of decision premises.

This approach contributes to recent managerial theories emphasizing systems thinking, organizational resilience and stakeholder complexity management. The shift in circular economy analysis from technological or managerial choices toward organizational communication and programme formation implies not only that organizations internalize sustainability objectives, but also that organizations selectively process ecological complexity through governance structures capable of filtering, prioritizing, routinizing and stabilizing environmental concerns. In this way, Luhmann's systems theory helps explain how circular economy transitions become organizationally possible within SEOs as communication-based processes structurally coupled with economic, political, scientific and community subsystems.

In this interpretation, stakeholder participation in SEOs is not primarily treated as a normative ideal or democratic value in itself, although these dimensions remain important. Rather, stakeholder participation acts as a structural mechanism for absorbing uncertainty, broadening organizational sensitivity to ecological irritations and reducing the complexity of future decisions by establishing stable expectations regarding acceptable organizational conduct. Participatory governance therefore contributes to organizational effectiveness not despite its complexity, but partly because of it: by increasing the diversity and intensity of communicative inputs, multistakeholder governance expands the organization's capacity to recognize ecological problems and transform them into operationally manageable programmes.

Regarding the first research question, the analysis demonstrates that circular economy objectives become organizationally decidable only when translated into internal decision premises. In SEOs, ecological concerns do not directly determine organizational behaviour; rather, they acquire operational relevance through their encoding into conditional and purposive programmes, strategies, governance rules, reporting practices and routines that recursively guide organizational communication over time. These programmes reduce environmental complexity to manageable premises, enabling sustainability to function as a durable structural commitment rather than a symbolic aspiration, while preserving both the operational closure and adaptive capacity of the organization.

As for the second research question, multistakeholder governance plays a generative rather than merely legitimating role in the emergence and stabilization of circular economy decision programmes. By expanding the density and diversity of internal communication, it internalizes heterogeneous social and ecological expectations as operative decision premises. Stakeholder self-organization therefore acts as a mechanism of structural coupling between the organization and its external environment, enabling circular economy criteria to become progressively embedded within governance architectures, operational routines and strategic programmes. Governance structures are not external instruments imposed upon organizations, but emergent outcomes of recursive communicative processes that co-evolve with organizational programmes over time.

In response to the third research question, systemic tensions from democratic participation and stakeholder inclusion, such as coordination costs due, for example, to conflicting expectations, slower decision-making, and internal communicative complexity, are not organizational inefficiencies or governance failures. Instead, these tensions serve as generative conditions for organizational resilience and adaptive learning. They trigger the differentiation of second-order decision programmes, including arbitration procedures, sustainability accounting, and conflict-resolution mechanisms, enabling the autopoietic system to recursively process changing ecological and social irritations. Circular economy objectives and democratic governance thus exhibit structural complementarity: participatory complexity drives long-term adaptive capacity by enhancing the system's internal ability to process environmental uncertainty and institutional change.

The study therefore contributes to management theory in several respects: first, to stakeholder and governance theory by reconceptualizing stakeholder engagement not merely as a source of legitimacy or social responsibility, but as a communicative and organizational mechanism for processing ecological complexity; second, to circular economy management studies by shifting the analytical focus from technological innovation and incentive alignment toward the recursive formation of decision premises within organizational communication systems; third, to resilience and adaptive governance research by explaining resilience not as equilibrium or stability state, but as the organization's capacity to reproduce and revise decision programmes recursively in response to ecological irritations and stakeholder pressures.

The article also contributes to the literature by explaining why multi-stakeholder SEOs may possess structural advantages in sustainability transitions. Their governance architectures allow environmental sustainability, social inclusion and economic continuity to coexist within the same communicative system through the recursive stabilization of sustainability-oriented decision premises. In this sense, SEOs emerge as particularly suitable organizational contexts for the institutionalization of ecological communication because they can legitimize non-economic objectives and stabilize them as binding organizational premises without sacrificing long-term economic viability.

At the managerial level, this Luhmannian framework shows that SEO sustainability transitions depend not on individual leadership or technological adoption, but on deliberately redesigning the decision premises structuring organizational communication. Rather than treating sustainability as an external compliance obligation or reputational strategy, managers and cooperative boards must embed circular economy criteria into the core governance architecture. Practically, this requires revising statutes, governance regulations and operational procedures to institutionalize sustainability objectives as binding conditional and purposive programmes, ensuring formalized communication channels systematically translate ecological irritations into decision-relevant information. Consequently, sustainability accounting, environmental committees, inter-stakeholder coordination routines and conflict-resolution procedures are not merely administrative tools; they are second-order programmes that stabilize internal complexity, organizational learning and recursive decision-making over time.

The study also suggests that managers operating in complex stakeholder environments should prioritize the design of governance rules capable of maintaining communicative openness while simultaneously reducing decisional uncertainty. Organizational resilience in sustainability transitions depends less on centralized control and more on the organization's ability to institutionalize distributed learning processes, monitor ecological irritations continuously and revise programmes recursively in response to changing environmental and social conditions. From this perspective, effective management in circular economy transitions increasingly becomes a matter of organizational programmability, communicative coordination and adaptive governance design.

At the policy level, the analysis suggests that public support for circular economy transitions in SEOs should move beyond purely incentive-based instruments such as subsidies, tax reliefs and certification schemes, focussing instead on building the institutional infrastructure within which sustainability-oriented decision premises can emerge and stabilize. Policymakers should therefore prioritize legal and institutional frameworks capable of supporting multistakeholder governance models, sustainability reporting systems and participatory decision-making structures that translate ecological irritations into internal decision premises within organizational boundaries.

The main limitation of this study lies in its conceptual nature. Although the theoretical framework offers a coherent explanation of how circular economy objectives emerge and stabilize within organizations, empirical research is needed to examine how programmes operate in practice across different organizational and institutional contexts. Future research could therefore focus on comparative case studies, longitudinal analyses of programme evolution and empirical investigations of how specific governance arrangements influence the stability, adaptability and effectiveness of circular economy programmes in social economy organizations.