Rationality in supplier selection decisions: The effect of the buyer's national task environment

Our study sheds light on two fundamental questions in supply management: First, does adherence to highly rational decision processes help buyers make better supplier selection decisions? Second, is the influence of procedural rationality on decision effectiveness moderated by buyers’ (differently dynamic) task environments? We empirically test these questions using a sample of 150 supplier selection decisions taken in China and 150 decisions taken in Germany, countries that expose buyers to dynamic decision environments and stable decision environments, respectively. Our findings suggest that the influence of decision process rationality is stable across decision makers’ task environments. Both in China and in Germany, such process rationality is positively related with higher decision quality, and no significant differences in relationship strengths emerge between the two country samples.

► We study whether rational decision processes lead to better supplier selection decisions.
► Also, we test whether such influence is moderated by differently dynamic task environments.
► We use a sample of 300 supplier selection decisions taken in China and Germany.
► Decision process rationality is found to improve the quality of supplier selection decisions.
► The positive effect of rationality is stable across differently dynamic task environments.