The Role of social agency in supply chain management decision-making

Abstract

Global supply chains have expanded in both their size and embeddedness in the markets. The formation and development of relationships with suppliers and buyers has become key to sustaining competitiveness, whereas firms within the chains face increasing needs and demands from both internal and external stakeholders. Accordingly, decision-making within supply chains is expected to meet various objectives regarding, for example, organizational sustainability and performance. To answer the challenges related to the decision-making, researchers in the field of supply chain management have recently been concerned especially with the theme of human behavior. Processes of individual decision-making in the context are often found to be irrational with relation to organizational aims and unexpected in their consequences on the level of supply chains. Yet, explanations with reference to individual psychology and social mechanisms relevant to the phenomena have received little attention, leaving the decision-making inefficient in practice. This doctoral thesis addresses the gap in previous research by considering the interaction between the psychology of the individual decision-maker and the social environment of the supply chain. In this regard, the thesis contributes to the research paradigm of behavioral supply chain management by elaborating on what the interaction means for supply chain management decision-making. A social cognitive lens is adopted to describe how supply chain management decisions may be linked to various psychological characteristics of decision-makers and to put forward practical proposals on how to enhance decision-making in the context. The compilation thesis builds on four original publications with a diverse background of theories on individual decision-making and organizational behavior. Literature relevant to supply chain management decision-making in general—and the topics of logistics outsourcing, organizational performance, and supply relationships in particular—is subjected to conceptual analysis for the development of propositions and hypotheses to be tested. To test the hypotheses, the research then employs empirical survey data from the Finnish State of Logistics Surveys 2014 and 2018, the European Social Survey 2016, and financial reporting data from the Voitto+ and Eikon databases. One of the individual studies is conceptual by nature, whereas three follow a nomothetic approach where the data is analyzed using quantitative methods. The results show how logistics outsourcing decisions are likely to be driven by attitudes, norms, and competence; the environmental and financial performance of companies may be linked to their respective institutional environments and ambidextrous business processes; and supply relationships should be managed with consideration to individual identity and leader rhetoric. The findings further support a view of the individual decision-maker as an intentional and subjectively rational social agent that lays the foundations to behavior on multiple levels of analysis from organizations to supply chains and markets. Supply chain management decision-making could then be enhanced with behavior change techniques related to, for instance, increasing knowledge and setting goals that may be enforced from within or outside the supply chain. Hence, the results benefit business practitioners and policymakers across the boundaries of individual firms with ideas on how to acknowledge the human decision-maker in decision models vastly applied in the field