Circular Ecosystem Orchestration and Institutional Change in the Fashion Industry

ABSTRACT Transitioning towards a circular economy largely depends on lead firms' ability to orchestrate a circular ecosystem. Despite an ever‐expanding literature on the orchestration mechanisms for delivering circular value, it remains unclear how these microlevel mechanisms interact with and drive macroinstitutional change. This study addresses this gap by developing a circular ecosystem orchestration framework for institutional change. Initial mechanism dimensions—standardising, nurturing and negotiating—and subsequent categories are deductively derived from extant literature and then enhanced inductively through an analysis of 15 leading fashion firms' sustainability reports, encompassing the fast fashion, luxury and sportswear segments. Findings provide a more granular and conceptually holistic orchestration framework, revealing a novel ‘building’ dimension and highlighting the concurrent, mutually reinforcing interactions between mechanisms. At the institutional level, all dimensions directly target the normative pillar to foster shared circular norms and values, while nurturing and standardising dimensions additionally target the cognitive and regulatory pillars, respectively. The resulting framework bridges the existing micro–macro disconnect, lays the foundations for future cross‐sectoral research and provides strategic guidance for managers seeking to effect systemic change and advance circularity.