Integrating Behavioral Decision Theory and Sustainable Supply Chain Management: Prioritizing Economic, Environmental, and Social Dimensions in Carrier Selection

• DOI: http://doi.org/10.1111/jbl.12181
• Author: Rodney W. Thomas,Brian S. Fugate,Beth Davis‐Sramek
• Published date: 01 June 2018
• Date: 01 June 2018

Integrating Behavioral Decision Theory and Sustainable Supply

Chain Management: Prioritizing Economic, Environmental, and

Social Dimensions in Carrier Selection

Beth Davis-Sramek

1

, Rodney W. Thomas

2

, and Brian S. Fugate

2

1

Auburn University

2

University of Arkansas

Carrier selection is a specialized sourcing decision with sustainability impacts in every supply chain. This research tests the effects of a

transportation carrier’s economic, environmental, and social sustainability performance on a shipper’s carrier selection decision. Underrep-

resented experimental methods are used to test an a priori hypothesis derived from behavioral decision theory logic. Results contradict com-

monly held win–win, trade-off, and ecological perspectives of sustainable supply chain management by finding that the economic dimension of

sustainability has the greatest effect on carrier selection. Our research highlights this managerial preference and offers a theoretically grounded

explanation for selection behaviors. This is one of the first empirical studies to simultaneously consider all three dimensions of sustainability. It

also moves beyond an internal focal firm focus to evaluate sustainability effects through the eyes of external supply chain members. Our unique

approach and findings offer managerial opportunities for differentiation and resource allocation as well as policy implications for the broader

transportation system.

Keywords: carrier selection; behavioral experiments; behavioral decision theory; sustainability; sustainable supply chain management;

sustainable supplier selection

INTRODUCTION

Transportation forms the foundation of global supply chains,

helps create time and place utility, and enables geographic spe-

cialization. As firms move their goods to market, an important

supplier selection decision involves choosing a transportation

carrier. Carrier selection decisions were traditionally based on

criteria related to cost, service, and capability (Bardi 1973;

McGinnis 1990; Kent and Parker 1999), but recent research calls

for inclusion of sustainability criteria in decision making (Meix-

ell and Norbis 2008; Williams et al. 2013; Thomas et al. 2016).

Incorporating sustainability into carrier selection fits under the

broader umbrella of sustainable supply chain management

(SSCM), which maintains that firms can develop supply chain

strategies that balance economic, environmental, and social sus-

tainability objectives (Pagell and Shevchenko 2014; Kirchoff

et al. 2016).

The broadening of carrier selection criteria to include the eco-

nomic, environmental, and social SSCM dimensions is being dri-

ven by several factors: (1) the increase in transportation firm

bankruptcies (Compeau 2010), (2) quality-of-life issues that

affect driver retention (Cantor et al. 2011), (3) the large carbon

footprint transportation produces (Liljestrand et al. 2015), and (4)

the current and proposed transportation policy mandates (Holland

et al. 2015). The dominant line of SSCM thought impacting car-

rier selection decisions is the “win–win”perspective: A business

case can be made for including sustainability criteria, with the

end result being a positive impact on operational and financial

performance (Golicic and Smith 2013). However, a burgeoning

stream of research calls for a complete dismantling of this tradi-

tional win–win perspective, with fervent calls for research to

consider alternate frameworks that take a trade-off perspective

(Figge and Hahn 2012) or an ecological perspective (Markman

and Krause 2016). These alternate perspectives assert that man-

agers should not assess the environmental and social dimensions

of SSCM through the lens of an enhanced bottom line.

All three SSCM perspectives are normative in that they pre-

scribe what decision makers should do. This leaves SSCM the-

ory development insufficiently rich because the field knows little

about what managers actually think, how they react, and how

they form preferences to make decisions—especially when con-

fronted with conflicting pressures (Matthews et al. 2016). The

purpose of this research is to determine which dimensions of sus-

tainability are most important to carrier selection decisions.

Rather than relying on prescriptive frameworks, this research uti-

lizes a theory-based empirical approach to determine what ship-

pers actually do in a carrier selection context. Insights from

behavioral decision theory (BDT) inform the development of an

a priori hypothesis that predicts a relationship between the eco-

nomic sustainability performance of a carrier and the purchase

intentions of a shipper. We test the hypothesized relationship via

a series of experiments that yield significant insights to increase

our theoretical understanding of SSCM. Results of the experi-

ments also offer managerial guidance based on how managers

actually behave.

LITERATURE REVIEW

Sustainability refers to “meeting the needs of the present without

compromising the ability of future generations to meet their own

needs”(World Commission on Environment and Development

Corresponding author:

Rodney W. Thomas, Department of Supply Chain Management,

Walton College of Business, University of Arkansas, Fayetteville,

AR 72701, USA; E-mail: rthomas@walton.uark.edu

Journal of Business Logistics, 2018, 39(2): 87–100 doi: 10.1111/jbl.12181

© Council of Supply Chain Management Professionals