How Environmental Innovations Emerge and Proliferate in Supply Networks: A Complex Adaptive Systems Perspective

Through a qualitative study of two firms' supply networks, we develop a theory of the process by which environmental innovations emerge and proliferate in supply networks. To overcome limitations of current supply network innovation theories, which focus on the diffusion of existing innovations, we employ a complex adaptive systems perspective, which addresses how such innovations come into being in the first place and how they spread in a network over time. Our findings suggest a process model, in which temporally connected processes cross from the organizational to the network level, creating and spreading environmental innovations in supply networks. This model and its corresponding theoretical propositions were generated through an abductive research methodology. Our key insight is that development of environmental innovations in supply networks is an emergent phenomenon. Once in the network realm, the process ceases to be under the control of the dominant buying firm. Instead, self‐organization and decentralized coordination prevail.