Reconceptualising cost structures in construction organisations: insights for circular economy business models adoption

Abstract

Purpose The cost structure is a defining component in the transition towards circular economy business models (CEBMs), as construction organisations face intensifying environmental and economic pressures. However, conventional cost-driven practices still prioritise immediate financial savings. This limits the industry’s ability to adopt CEBM. Hence, this study aims to examine the cost structure attributes of CEBM in construction organisations. Design/methodology/approach This study used an exploratory sequential mixed-methods design, combining semi-structured interviews with senior professionals and a survey of 208 respondents. This study first identified 25 cost structure attributes and then validated them through a survey and confirmatory factor analysis. Findings Five attributes demonstrated significant influence on CEBMs. The cost of waste handling, waste processing and remanufacturing emerged as the strongest determinants. Thus, these findings confirm that altering cost structure for CEBM adoption requires broader organisational changes and early design decisions that reduce waste at source. Practical implications This study advances theory by positioning cost structure as a strategic mechanism rather than a peripheral financial consideration. It provides construction organisations with evidence-based priorities for strengthening resource efficiency and long-term economic performance. It also provides policymakers with a clearer direction on reducing cost-related barriers to the adoption of CEBM. Originality/value This study presents an empirically validated approach for cost structure in CEBM for construction organisations. Hence, it advances both theoretical and practical understanding of CEBM implementation.