Towards a theory of self-organizing supply chain clusters

Supply chain clusters achieve viability by exploiting geographical concentration to gain efficiencies in matching supply and demand. Although the benefits of operating in these environments are understood, little is known about how supply chain clusters form and adapt. From a systems theory perspective, causal events lead to this formation and adaptation and facilitate sustained operation in modern business settings. This paper extends this understanding by theorizing key antecedents responsible for supply chain cluster formation and adaptation, conceptualizing individual firms as agents. Through a characterization of agents as either passive or active, we construct propositions and a conceptual model. The modelling, supported by causal loop diagrams, details the interactions between agents that lead to cluster formation and adaptations to contextual changes in supply chain clusters. These findings can guide policy design that is more effective in enabling the emergence and sustained existence of supply chain clusters through facilitated causal interactions.