Document Type : Research Paper

Authors

• laya olfat ¹
• seyed sourosh ghazinoori ²
• maghsood amiri ¹
• TAHEREH MIRHOSEINI ³

¹ Professor, Department of Industrial Management, Faculty of Management and Accounting, Allameh Tabataba'i University, Tehran, Iran

² Professor, Department of Technology Management and Entrepreneurship, Faculty of Management and Accounting, Allameh Tabataba'i University, Tehran, Iran

³ Ph.D. Student in Industrial Management, Department of Operations Management and Information Technology, Faculty of Management and Accounting, Allameh Tabataba’i University, Tehran, Iran

Abstract

The limited natural resources of the Earth have presented various industries, including the dairy industry, with increasing challenges in the sustainable and efficient use of resources. The high consumption of water, energy, and raw materials, as well as the significant production of waste—especially organic waste—in this industry, has exposed it to environmental pressures. To improve organizational performance, new approaches for the optimal use of resources have been introduced, one of the most important of which is the concept of the circular economy. In recent years, researchers have attempted to combine this concept with other management frameworks to create an effective approach for enhancing organizational performance. In this regard, the present study aims to identify and model the concepts of the circular economy from the perspective of the EFQM 2020 Excellence Model in the dairy industry. For this purpose, first, the key indicators of the circular economy were identified using a systematic literature review and interviews with experts, and then these indicators were classified within the EFQM framework with the help of a panel of experts. Finally, confirmatory factor analysis was used to assess the validity of the designed model. The results indicate an appropriate fit of the model and meaningful relationships between the components. The findings of this study can serve as a model for establishing an excellence approach in the dairy industry based on a circular economy and can play an effective role in formulating national and industrial policies.
Introduction
As industrialization has progressed, the production sector has increasingly faced the challenge of diminishing non-renewable resources (Akhimien et al., 2021). Given the finite nature of these resources, it is crucial to adopt diverse strategies to maximize their use, as they are essential to maintaining economic activity. This has led to a growing focus on the interaction between economic and ecological systems. A new approach is needed to manage resource consumption and pollution to ensure the sustainability of both biological and socio-economic systems (Pourasghar et al., 2019). Historically, economies have operated on a linear model—based on extraction, production, and disposal. In contrast, the circular economy has emerged as a modern paradigm aimed at reducing the negative impacts of the linear model. It focuses on minimizing waste and maximizing resource efficiency (Suhaib & Fayaz, 2023). This concept promotes reducing, reusing, and recycling materials throughout production, distribution, and consumption processes to achieve sustainable development (Pourasghar et al., 2019). Given these considerations, this research seeks to identify and model key indicators related to the circular economy by reviewing relevant literature, including books, scholarly articles, and online resources, as well as conducting interviews with field experts. The identified indicators are then categorized within the EFQM 2020 Organizational Excellence Model. Finally, the model’s statistical validity is evaluated using confirmatory factor analysis, with input from industry managers.
Research Background
Research on the circular economy is still in its early stages, characterized by considerable diversity and fragmentation. Some studies focus on redesigning business models according to circular economy principles (Bocken et al., 2016), while others explore product design (Atlason et al., 2017) or examine strategic shifts and the identification of implementation barriers (Bjørnbet et al., 2021; Grafström & Aasma, 2021; Karali & Shah, 2022; Koide et al., 2022; Padilla-Rivera et al., 2021; Rincón-Moreno et al., 2021; Salmenperä et al., 2021). The expanding research in this area highlights the increasing integration of circular economy principles with other management frameworks, particularly in the realm of organizational excellence. The shift of manufacturing firms toward circular practices, coupled with substantial changes in industrial operations, has broadened the scope for research in this field. These transformations are not merely extensions of existing practices; they require fundamental shifts in organizational thinking, operations, and business logic. However, many organizations still struggle with how to implement circular economy principles effectively. This highlights the need for a comprehensive and practical model. The present study addresses this gap by proposing a model grounded in organizational excellence, specifically using the EFQM 2020 framework.
Method
This study employed a mixed-methods approach, combining a systematic literature review, expert interviews, and confirmatory factor analysis. The first phase involved conducting a systematic literature review to identify and explore the key dimensions and components related to circular economy excellence. Systematic reviews are essential for assessing the current state of knowledge in emerging research fields (Boland, 2013; Templier & Paré, 2015). In addition to the literature review, semi-structured interviews with field experts were conducted to gain a more nuanced understanding of circular economy principles and how they can be applied effectively. In the second phase, qualitative data were synthesized into a structured questionnaire. Quantitative data were then collected and analyzed to examine the relationships between the identified variables (Creswell, 2005). Confirmatory factor analysis was used to assess the validity of the indicators and to verify the overall structure of the proposed model.
Discussion and Results
The findings suggest that the proposed model fits the data well, with all paths showing statistical significance. The model consists of three main components:

Orientation: Organizational Culture and Leadership, Purpose and Strategy
Execution: Stakeholder Engagement, Sustainable Value Creation, Performance Management
Outcomes: Stakeholder Perceptions, Strategic and Operational Results

Key performance indicators identified include waste management, the use of renewable energy, employee engagement, and circular product design. The model achieved a Goodness-of-Fit (GOF) index of 0.707, indicating strong empirical validity. By combining the EFQM 2020 framework with circular economy principles, this study presents a comprehensive model that supports both environmental and economic sustainability. The results emphasize the importance of fostering a culture of innovation, implementing green strategies, and maintaining effective communication with stakeholders. Additionally, the use of advanced technologies and information systems can enhance decision-making capabilities. The model offers a strategic roadmap for the dairy industry and other sectors within the food industry.
Conclusion
This study provides a validated framework for implementing circular economy practices in the dairy industry, grounded in the EFQM 2020 organizational excellence model. By integrating these two approaches, organizations can drive continuous improvement and achieve long-term sustainability. Organizations are encouraged to adopt the identified indicators and take concrete actions to reduce waste, optimize resource use, and create sustainable value. Future research should explore the application of this model in other industries and test its effectiveness with larger and more diverse samples to increase generalizability.

Keywords

• Linear economy
• circular economy
• EFQM 2020
• systematic literature review

Main Subjects

• Industrial management