What internal challenges does ABC face in shifting to a circular business model?

• A. Tall organizational structure and autocratic leadership style conflict with needs of circular model.
• B. Moderate structure with flexible leadership.
• C. Flat organizational structure and participative leadership.
• D. Strong alignment between structure and circular needs.

Answer: (A)

Circular business models require distributed decision-making, cross-functional collaboration, and a long-term perspective. A tall organizational structure with autocratic leadership creates silos, slows approvals, and limits empowerment, making it hard to redesign processes like reverse logistics, product take-back, and partnerships that circularity depends on. That mismatch is the internal challenge ABC faces when shifting to a circular model.

Options describing a moderate structure with flexible leadership, a flat structure with participative leadership, or strong alignment with circular needs describe conditions that would support the transition rather than hinder it, so they don’t pose the internal barrier at issue here.