A STRATEGIC ANALYSIS OF CONSTRUCTION ORGANIZATIONS DURING THE INDUSTRY'S TRANSITION TO A CIRCULAR ECONOMY

Year 2024, Volume: 22 Issue: 54, 2302 - 2331, 15.10.2024

Bora Aldemir , Mina Aslan

https://doi.org/10.35408/comuybd.1472116

Abstract

Current production methods have serious environmental impacts, which concerns the world. This concern has led many authorities, individuals, and organizations to prevent irreversible environmental damage. In response to this issue, the circular economy is revolutionizing production by adopting circular business models that minimize environmental impact. Numerous studies have found construction activities to be environmentally harmful. Mineral raw materials from natural sources are used in most construction procurement and production. Once their useful life is over, these mineral resources are irreparable, non-reusable, and non-recyclable. This scenario violates circular economy principles. This study predicts that the construction industry will become more circular in response to demands, obligations, and directives that encourage environmentally friendly production strategies like the circular economy. Thus, construction companies and design consultants must adapt to the circular economy. PESTEL analysis is used to predict macroenvironmental changes for construction organizations. According to the PESTEL analysis, construction companies must make changes to succeed and survive in transition to a circular construction industry. Integration into more complex business networks, adapting to a service-based economy, improving management skills, and improving workforce capabilities are among these changes.

Keywords

Circular Business Models, Circular Construction, Circular Economy, PESTEL Analysis

İNŞAAT SEKTÖRÜNÜN DÖNGÜSEL EKONOMİYE GEÇİŞ SÜRECİNDE SEKTÖRDEKİ KURULUŞLARIN STRATEJİK ANALİZİ

Abstract

Mevcut üretim yöntemlerinin tüm dünyayı olumsuz olarak etkileyen ciddi çevresel etkileri bulunmaktadır. Bu durum sonucu oluşan endişe; birçok otoriteyi, bireyi ve kuruluşu geri dönüşü olmayan çevresel zararları önlemeye yöneltmiştir. Bu soruna yanıt olarak döngüsel ekonomi, çevresel etkiyi en aza indiren döngüsel iş modellerini benimseyerek üretim yöntemlerini çevre açısından zararsız hale getirmeyi amaçlamaktadır. Çok sayıda çalışma, inşaat faaliyetlerinin çevreye zararlı olduğunu ortaya koymuştur. İnşaat sektöründe yapılmakta olan üretim faaliyetlerinin çoğunda doğal kaynaklardan elde edilen mineral hammaddeler kullanılmaktadır. Kullanım ömürleri sona erdiğinde, bu mineral kaynaklar onarılamazlar, yeniden kullanılamazlar ve geri dönüştürülemezler. Bu durum döngüsel ekonomi ilkelerine ters düşmektedir. Bu çalışma, inşaat sektörünün teşvikler, müşteri talepleri ya da yasal zorunluluklar gibi nedenlerle döngüsel bir ekonomi haline geleceğini öngörmektedir. Bu nedenle, inşaat şirketleri ve mimarlar ve mühendisler gibi müşavir firmalar döngüsel ekonomiye uyum sağlamak zorunda kalacaktır. PESTEL analizi, organizasyonlar için makro çevresel değişiklikleri tahmin etmek için kullanılır. Bu nedenle çalışmada döngüsel ekonomiye geçiş sürecinde inşaat organizasyonları için PESTEL analizi yapılmıştır. Bu analize göre, inşaat şirketleri döngüsel bir inşaat sektörüne geçişte başarılı olmak ve hayatta kalmak için değişiklikler yapmalıdır. Daha karmaşık iş ağlarına entegrasyon, hizmete dayalı bir ekonomiye uyum sağlama, yönetim becerilerini geliştirme ve işgücü yeteneklerini iyileştirme bu değişiklikler arasındadır.

Keywords

Döngüsel İş Modelleri, Döngüsel Yapım, Döngüsel Ekonomi, PESTEL Analizi.

References

• Abad-Segura, E., Fuente, A. B., González-Zamar, M.-D., and Belmonte-Ureña, L. J. (2020). Effects of Circular Economy Policies on the Environment and Sustainable Growth: Worldwide Research. Sustainability, 12(14), 5792–5819.
• Aboulamer, A. (2018). Adopting a circular business model improves market equity value. Thunderbird International Business Review, 60(5), 765–769. https://doi.org/10.1002/tie.21922
• Adams, K. T., Osmani, M., Thorpe, T., and Thornback, J. (2017). Circular economy in construction: Current awareness, challenges and enablers. Proceedings of the Institution of Civil Engineers - Waste and Resource Management, 170(1), 15–24.
• Agyekum, K., Amudjie, J., Pittri, H., Dompey, A. M. A., and Botchway, E. A. (2023). Prioritizing the principles of circular economy among built environment professionals. Built Environment Project and Asset Management, ahead-of-print(ahead-of-print), ahead-of-print.
• Ahmed, S., Majava, J., and Aaltonen, K. (2024). Implementation of circular economy in construction projects: A procurement strategy approach. Construction Innovation, 24(7), 204–222.
• Arup. (2016). The Circular Economy in the Built Environment. ARUP.
• Atta, I., and Bakhoum, E. S. (2024). Environmental feasibility of recycling construction and demolition waste. International Journal of Environmental Science and Technology, 21(3), 2675–2694.
• Badraddin, A. K., Rahman, R. A., Almutairi, S., and Esa, M. (2021). Main Challenges to Concrete Recycling in Practice. Sustainability, 13(19), 11077–11092.
• Benachio, G. L. F., Freitas, M. do C. D., and Tavares, S. F. (2020). Circular economy in the construction industry: A systematic literature review. Journal of Cleaner Production, 260, 121046.
• Berge, S., and von Blottnitz, H. (2022). An estimate of construction and demolition waste quantities and composition expected in South Africa. South African Journal of Science, 1–5.
• Boyer, R. H. W., Hunka, A. D., and Whalen, K. A. (2021). Consumer Demand for Circular Products: Identifying Customer Segments in the Circular Economy. Sustainability, 13(22), 12348.
• Chizaryfard, A., Trucco, P., and Nuur, C. (2021). The transformation to a circular economy: Framing an evolutionary view. Journal of Evolutionary Economics, 31(2), 475–504.
• Compañero, R. J., Feldmann, A., and Tilliander, A. (2021). Circular Steel: How Information and Actor Incentives Impact the Recyclability of Scrap. Journal of Sustainable Metallurgy, 7(4), 1654–1670.
• de Sousa, G. C., and Castañeda-Ayarza, J. A. (2022). PESTEL analysis and the macro-environmental factors that influence the development of the electric and hybrid vehicles industry in Brazil. Case Studies on Transport Policy, 10(1), 686–699.
• Ekins, P., Domenech Aparisi, T., Drummond, P., Bleischwitz, R., Hughes, N., and Lotti, L. (2020). The circular economy: What, why, how and where. The OECD Centre for Entrepreneurship.
• Ellen MacArthur Foundation. (2023). What is a circular economy? What Is a Circular Economy? https://ellenmacarthurfoundation.org/topics/circular-economy-introduction/overview
• European Commission. (2015). Closing the loop—An EU action plan for the Circular Economy. European Commission. https://eur-lex.europa.eu/resource.html?uri=cellar:8a8ef5e8-99a0-11e5-b3b7-01aa75ed71a1.0012.02/DOC_1&format=PDF
• European Commission. (2019). The European Green Deal. Accessed: August 25, 2024 https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal_en
• Finch, G., and Marriage, G. (2019). Non-orthogonal Light Timber Frame Design: Using Digital Manufacturing Technologies to Facilitate Circular Economy Architecture. In F. Bianconi and M. Filippucci (Eds.), Digital Wood Design: Innovative Techniques of Representation in Architectural Design (pp. 1087–1115). Cham: Springer International Publishing.
• Franco-García, M.-L., Carpio-Aguilar, J. C., and Bressers, H. (2019). Towards zero waste, circular economy boost: Waste to resources. Cham: Springer.
• Garusinghe, G. D., Perera, B. A., and Weerapperuma, U. S. (2023). Integrating Circular Economy Principles in Modular Construction to Enhance Sustainability. Sustainability, 15(15), 11730.
• Ghisellini, P., Ripa, M., and Ulgiati, S. (2018). Exploring environmental and economic costs and benefits of a circular economy approach to the construction and demolition sector. A literature review. Journal of Cleaner Production, 178, 618–643.
• Ghisellini, P., and Ulgiati, S. (2020). Circular economy transition in Italy. Achievements, perspectives and constraints. Journal of Cleaner Production, 243, 118360.
• Giorgi, S., Lavagna, M., Wang, K., Osmani, M., Liu, G., and Campioli, A. (2022). Drivers and barriers towards circular economy in the building sector: Stakeholder interviews and analysis of five European countries policies and practices. Journal of Cleaner Production, 336, 130395.
• Gravagnuolo, A., Angrisano, M., and Fusco Girard, L. (2019). Circular Economy Strategies in Eight Historic Port Cities: Criteria and Indicators Towards a Circular City Assessment Framework. Sustainability, 11(13), 3512.
• Guerra, B. C., Shahi, S., Mollaei, A., Skaf, N., Weber, O., Leite, F., and Haas, C. (2021). Circular economy applications in the construction industry: A global scan of trends and opportunities. Journal of Cleaner Production, 324, 129125.
• Haque, S. E., Nahar, N., and Haque, Md. S. (2024). A study on the waste generation rates and recycling potential for the construction and demolition waste in Dhaka, Bangladesh. Environmental Monitoring and Assessment, 196(2), 183.
• Herrador, M. (2024). Assessment of the first-ever circular economy framework of Cambodia: Barriers, international opportunities and recommendations. Journal of Cleaner Production, 438, 140778.
• Huang, B., Wang, X., Kua, H., Geng, Y., Bleischwitz, R., and Ren, J. (2018). Construction and demolition waste management in China through the 3R principle. Resources, Conservation and Recycling, 129, 36–44.
• Husgafvel, R., Linkosalmi, L., Hughes, M., Kanerva, J., and Dahl, O. (2018). Forest sector circular economy development in Finland: A regional study on sustainability driven competitive advantage and an assessment of the potential for cascading recovered solid wood. Journal of Cleaner Production, 181, 483–497.
• Illankoon, C., and Vithanage, S. C. (2023). Closing the loop in the construction industry: A systematic literature review on the development of circular economy. Journal of Building Engineering, 76, 107362.
• Illankoon, C., Vithanage, S. C., and Pilanawithana, N. M. (2023). Embodied Carbon in Australian Residential Houses: A Preliminary Study. Buildings, 13(10), 2559.
• Joensuu, T., Edelman, H., and Saari, A. (2020). Circular economy practices in the built environment. Journal of Cleaner Production, 276, 124215.
• Johnson, G., Scholes, K., and Whittington, R. (2008). Exploring corporate strategy: Text and cases. Essex: Pearson education.
• Kazmi, R., and Chakraborty, M. (2023). Identification of parameters and indicators for implementing circularity in the construction industry. Journal of Engineering and Applied Science, 70(1), 77.
• Lacy, P., Long, J., Spindler, W., Lacy, P., Long, J., and Spindler, W. (2020). Introduction: The path to transformation is circular. The Circular Economy Handbook: Realizing the Circular Advantage, 1–14.
• Medaglia, R., Rukanova, B., and Zhang, Z. (2024). Digital government and the circular economy transition: An analytical framework and a research agenda. Government Information Quarterly, 41(1), 101904.
• Mhatre, P., Gedam, V. V., and Unnikrishnan, S. (2023). Management insights for reuse of materials in a circular built environment. Waste Management and Research, 42(5), 369–405.
• Mostaghel, R., Oghazi, P., and Lisboa, A. (2023). The transformative impact of the circular economy on marketing theory. Technological Forecasting and Social Change, 195, 122780.
• Palea, V., Santhià, C., and Miazza, A. (2023). Are circular economy strategies economically successful? Evidence from a longitudinal panel. Journal of Environmental Management, 337, 117726.
• Pan Wei, Chen Le, and Zhan Wenting. (2019). PESTEL Analysis of Construction Productivity Enhancement Strategies: A Case Study of Three Economies. Journal of Management in Engineering, 35(1), 05018013.
• Rainatto, G. M., Lopes de Sousa Jabbour, A. B., Cardoso Machado, M., Chiappetta Jabbour, C. J., and Tiwari, S. (2024). How can companies better engage consumers in the transition towards circularity? Case studies on the role of the marketing mix and nudges. Journal of Cleaner Production, 434, 139779.
• Reusable Packaging Association. (2023). Circular Economy Legislation: The International Experience. https://www.reusablepackaging.org/insights/circular-economy-legislation-the-international-experience/
• Shpak, N., Melnyk, O., HORbAL, N., Ruda, M., and Sroka, W. (2021). Assessing the implementation of the circular economy in the EU countries. 9(1), 25–39.
• Sudarsan, J. S., and Gavali, H. (2023). Application of BIM in conjunction with circular economy principles for sustainable construction. Environment, Development and Sustainability, 26(3), 7455–7468.
• Sumikura, Y., and Katsumi, T. (2022). Material reuse and recycling in construction works in Japan. Journal of Material Cycles and Waste Management, 24(4), 1216–1227.
• Tserng, H.-P., Chou, C.-M., and Chang, Y.-T. (2021). The Key Strategies to Implement Circular Economy in Building Projects—A Case Study of Taiwan. Sustainability, 13(2), 754.
• Turkyilmaz, A., Guney, M., Karaca, F., Bagdatkyzy, Z., Sandybayeva, A., and Sirenova, G. (2019). A Comprehensive Construction and Demolition Waste Management Model using PESTEL and 3R for Construction Companies Operating in Central Asia. Sustainability, 11(6), 1593.
• United Nations. (2015). Transforming our world: The 2030 Agenda for Sustainable Development. Accessed: August 25, 2024, https://sdgs.un.org/2030agenda
• Washington State University Libraries. (2023). PESTEL Analysis -Industry Research. https://libguides.libraries.wsu.edu/c.php?g=294263&p=4358409
• Worthington, I., and Britton, C. (2009). The business environment. Essex: Pearson education.
• Yadav, J. S., Saini, A., Hussain, S., and Sharma, V. (2024). Estimation of ultimate bearing capacity of circular footing resting on recycled construction and demolition waste overlaying on loose sand. Journal of Building Pathology and Rehabilitation, 9(1), 25.
• Yüksel, I. (2012). Developing a multi-criteria decision making model for PESTEL analysis. International Journal of Business and Management, 7(24), 52.
• Zorpas, A. A. (2020). Strategy development in the framework of waste management. Science of The Total Environment, 716, 137088.
• Zuofa, T., Ochieng, E. G., and Ode-Ichakpa, I. (2023). An evaluation of determinants influencing the adoption of circular economy principles in Nigerian construction SMEs. Building Research and Information, 51(1), 69–84.