Rational and intuitive decision-making in sourcing teams: Effects on decision outcomes

• Supplier selection decisions are taken by cross-functional sourcing teams.
• Dual process theory suggests that decision making can be rational and/or intuitive.
• Rational procedures facilitate the selection of suppliers that provide good cost performance.
• Experience-based intuition increases cost and quality/delivery/innovativeness performance.

According to dual process theory, individual decision-making can be based on rational procedures and experience-based intuition, and the decision-making approach can influence decision outcomes. We investigate how the application of rational procedures and experience-based intuition affects the outcomes of supplier selection decisions taken by cross-functional sourcing teams. Specifically, we examine whether the selected supplier׳s cost and quality/delivery/innovativeness performance is higher when more team members use a highly rational and/or a highly experience-based decision-making approach. From data on 54 teams, we find that the use of rational procedures enhances cost performance. Conversely, when sourcing team members use their experience-based intuition, the decision is more likely to result in satisfactory supplier performance along all tested performance dimensions.