Circular Economy in Pharmaceutical Industry Through the Lens of Stimulus Organism Response Theory

Abstract

Purpose: The purpose of this study is to explore circular economy (CE) initiatives and apply the stimulus-organism-response theory to find the socio-political drivers and enablers of CE in the pharmaceutical industry. CE as a concept was relatively not studied much with respect to socio-political interests from operations management perspectives. This was especially so in the pharmaceutical industry. Design/methodology/approach: This research study was anchored in the theoretical conversation of stimulus-organism-response theory to find the socio-political interests and enablers of the regenerative CE principles. These were the functions of remanufacturing, reuse and recycle. For this research study, data was collected in two steps. First, eight industry practitioners were interviewed to understand the CE practices in the pharmaceutical industry. Then 166 chiefs of production and operations functions from 124 pharmaceutical companies were surveyed. The quantitative data was empirically analyzed using SmartPLS3 software. Findings: This research study revealed that pressure from suppliers and other public stakeholders were driving regenerative CE practices in the pharmaceutical industry. The results further stated that CE enablers such as green information technology systems and internal environmental management were critical for making pharmaceutical manufacturing operations circular. Research limitations/implications: This research study measured the constructs on a formative scale. Studies measuring socio-political interests, CE enablers and sustainability practices constructs on a formative scale were much required for the development of the CE theory. This research study output could be applied across geographies and industries to measure the indicators of CE. Practical implications: This research study indicated that in the context of the pharmaceutical industry, there was an overemphasis on the remanufacture and reuse principles. However, the focus on recycling principles was mostly subdued. For managers and regulators in the pharmaceutical sector, this research study provided clear insights that for more effective CE implementation. This was based on an effective application of recycling practices in the critical functions in pharmaceutical industry. Originality/value: Earlier research studies on green and environmental manufacturing were focused on linear production models. To provide clear and robust foundations for CE theory, this research study considered operations management from the perspective of the value chain. This comprised the entire circular production model. Earlier research studies had treated socio-political interests, CE enablers and sustainability practices as reflective constructs. This study was one of the foremost to measure these constructs on a formative scale.