Shaping Digital Transformation beyond Circularity

Abstract: Motivation and PurposeWhile recognizing circular economy and the intuitive appeal that reusing parts of discarded products has for sustainability, Vargo emphasizes in his paper "Beyond Circularity" (Vargo, 2021) that this model adheres and perpetuates a model of economy that is at the root of unsustainability: the make-buy-destroy-rebuy model of goods. As alternative mental and economic model, he presents Service-Dominant (S-D) Logic conceptualizing economic activity in terms of service-for-service exchange with service defined as applying one´s resources for the value of another. And thus, promoting an economic model in which value is provided through service and suggesting that it can be provided independently from material goods. This shift towards providing service instead of embedding it into material goods (e.g. CDs for music or videos) is accelerated by digitalization and the associated opportunity to improve sustainability beyond the circular economy as part of digital transformations. The question of "how to shape digital transformation beyond circularity" is where this research starts. Initially the understanding of the properties and mechanisms of digital transformations is summarized. Afterwards the key dimensions and value constellations of service and service provision are outlined drawing on the theoretical lens of Service-Dominant Logic, Service Science and Service Dominant Architecture (Normann & Ramirez, 1993; Spohrer, Maglio, Vargo, & Warg, 2022). Finally, the service perspectives are conceptually integrated and recommendations for “shaping digital transformation beyond circularity” are derived.Methodology and Approach A conceptual paper with theory synthesis as research design is picked to achieve conceptual integration across multiple theories and concepts (Gilson & Goldberg, 2015; Jaakkola, 2020; Lukka & Vinnari, 2014, 2016; MacInnis, 2011). To outline, structure and understand the fragmented field of digital transformation, its nature, mechanism and its effects, literature reviews are applied as domain theory. Based on the reviews of Vial (Vial, 2019), Nadkarni (Nadkarni & Prügl, 2021), and Hanelt (Hanelt, Bohnsack, Marz, & Antunes Marante, 2021), the core elements of digital transformation are elaborated. For carving out the key dimensions and value constellations of service, service provision, value cocreation and service innovations Service-Dominant Logic, Service Science and Service Dominant Architecture are chosen as method theories. Through conceptual integration of the different perspectives, theoretical knowledge and implications for the practical implementation of "shaping the digital transformation beyond circularity" are built up.Findings In digital transformations, organizations operate in complex value constellations and diverse relationships. This research offers a concept for promoting digital service provision instead of embedding it in material goods and thus for “shaping digital transformation beyond the circular economy”. The key findings are that the success of less natural resource-based, human-centered and sustainable digital transformations depends on fundamental changes in mindsets, economic models and processes. The focus of technology-driven transformations is not on the digital mapping of existing linear processes, but on the mobilization of actors on the path to creating their own value in complex relational value constellations. The core task of management is therefore the reconfiguration of outputs, roles, rules and relationships.

Keywords: Digital transformation, beyond circularity, S-D Logic, Service Science, Service Dominant Architect

DOI: 10.54941/ahfe1006412

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