In late 2018, the Journal of Operations Management published an invited methods article by Lonati et al. (2018) to provide guidance to authors on how to design behavioral experiments to achieve the rigor required for consideration in the journal. That article was written as a response to a number of behavioral research submissions to JOM, each dealing with interesting topics but viewed by the editors to possess poor design choices at inception. While the Lonati et al. (2018) piece provides experimental guidance fitting to certain research agendas, questions have arisen concerning whether and how exactly to implement some of the points that it makes, and how to best address trade‐offs in the design of behavioral experiments. Questions have also arisen concerning how to apply these concepts in operations management research. This technical note seeks to address these questions, by diving into the details of research risks and trade‐offs regarding demand effects, incentives, deception, sample selection, and context‐rich vignettes. The authors would like to recognize the input of a large number of senior scholars in the JOM community who have provided support and feedback as we have sought to help authors tease out what can reasonably be done in designing strong behavioral experiments that fit various research agendas.
Risk is a significant issue for supply chain managers. Not only must they contend with multiple dimensions of risk in decision‐making, they must reconcile decision‐making with broader organizational interests. This study examines the influence of organizational communication regarding supply chain risk on individual decision‐making strategies and the perceptions of risk. A multi‐stage experimental design is applied, in which decision‐makers make decisions across three dimensions of risk and adjust their risk‐taking behavior after being presented with organizational communication regarding supply chain risk levels. The relationship between organizational communication and the perceptions of supply chain risk is then explored after decision‐makers are allowed to adjust their supply chain strategies. The results suggest that decision‐makers adapt sourcing strategies in response to organizational communication regarding supply chain risk. Specifically, they make riskier decisions when the organization communicates improvements in supply chain risk levels. However, when given specific instructions to reduce risk, they do not adjust their supply chain strategies.
“You get what you pay for” is one of life's lessons that predominates in purchasing decisions individuals make in their personal lives. The results of this study suggest this lesson should also prevail among management when price‐related purchasing decisions in businesses are being made. An evaluation of over 1,700 purchasing instances across seven years of a longitudinal panel data set collected from Tier 1 production suppliers to the six major North American automotive Original Equipment Manufacturers (OEMs), Chrysler, Ford, General Motors, Honda, Nissan, and Toyota, found that suppliers compensate for price concessions and price reduction pressure from the OEM in the year following the concession, by reducing product quality, service support, and R&D expenditures associated with goods provided to the OEM. This industry is particularly relevant because it is highly adversarial, yet at the same time reliant on interdependence. The results show that supplier price concessions granted to an OEM led to compensatory supplier behaviors of reduced quality and R&D expenditures toward that OEM. Further, the results suggest that the organizational justice dimensions of distributive justice, procedural justice, interpersonal justice, and informational justice can ameliorate negative supplier compensatory activities. A buyer–supplier relational environment that engenders organizational justice tactics such as open and honest communication with suppliers provides suppliers the expectation of an acceptable return on business over the long term, provides help to suppliers to reduce costs, and builds supplier trust of the OEM had generally positive effects on quality, service, and R&D expenditures. From a management perspective, these results indicate there is a very real risk versus reward issue associated with pressuring suppliers for price reductions.
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