Abstract
Purpose–The purpose of this paper is to investigate the behavioral tendencies of supply managers when they are faced with uncertainty in making multi-tier sourcing decisions. Design/methodology/approach–This paper uses the literature on multi-tier supply chains and behavioral decision-making to develop a theoretical framework for examining factors influencing a supply manager’s decision to retain control over sourcing in the multi-tier context. An experimental vignette methodology is used to gather data from 259 supply managers.
Findings–Results suggest that supply managers choose to exert less multi-tier control when they have high levels of interpersonal trust in the tier-1 supplier’s sales representative. This effect is accentuated by a high level of familiarity with potential lower-tier suppliers. Under high levels of familiarity with potential lower-tier suppliers, supply managers will exert greater levels of multi-tier sourcing control as the behavioral uncertainty of the tier-1 supplier increases.
Practical implications–Buying firms can enhance their understanding of supply managers’ multi-tier sourcing decision-making and the potential biases associated with it. Suggestions for a more effective use of multi-tier sourcing is provided in the Discussion section. Originality/value–Multi-tier sourcing is an increasingly important area of research and this paper is the first to examine individual supply managers’ behavioral decision-making in the multi-tier context. This paper also contributes to the outsourcing literature by investigating behavioral factors influencing the outsourcing of sourcing activities.
Findings–Results suggest that supply managers choose to exert less multi-tier control when they have high levels of interpersonal trust in the tier-1 supplier’s sales representative. This effect is accentuated by a high level of familiarity with potential lower-tier suppliers. Under high levels of familiarity with potential lower-tier suppliers, supply managers will exert greater levels of multi-tier sourcing control as the behavioral uncertainty of the tier-1 supplier increases.
Practical implications–Buying firms can enhance their understanding of supply managers’ multi-tier sourcing decision-making and the potential biases associated with it. Suggestions for a more effective use of multi-tier sourcing is provided in the Discussion section. Originality/value–Multi-tier sourcing is an increasingly important area of research and this paper is the first to examine individual supply managers’ behavioral decision-making in the multi-tier context. This paper also contributes to the outsourcing literature by investigating behavioral factors influencing the outsourcing of sourcing activities.
Original language | English |
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Pages (from-to) | 385-405 |
Journal | International Journal of Operations & Production Management |
Volume | 39 |
Issue number | 3 |
DOIs | |
Publication status | Published - 2019 |
Keywords
- interpersonal trust
- multi-tier sourcing
- behavioural experiment
- sourcing strategy
- behavioural uncertainty