The Impact of Sustainability on Supplier Selection: A behavioural study

Supplier selection is a critical decision with sustainability impacts in global supply chain. This study explores how different dimensions of a supplier's sustainability can affect managers' evaluation and consequent selection of a supplier. An experimental research method is applied to examine a series of hypotheses that integrate the sustainable supply chain management literature and the behavioural decision-making literature. Data from a total of 857 valid sets of responses in three scenario-based experiments were used to explore the impacts of long-term and short-term relationships with the supplier, and the length of work experience of the supply chain manager as factors in managers' selection decisions. The findings show that managers favour sustainability dimensions in their evaluation and intention to select a supplier. Moreover, managers react more negatively to a low level of sustainability than they react positively to a high level of sustainability. The economic dimension of sustainability has the strongest impact of the three dimensions on managers' supplier evaluation and selection intent. Furthermore, where the manager and supplier have been in a long-term relationship, there is an interaction effect between managers support for each of the dimensions and the effect of sustainability on supplier evaluation and selection. However, this moderating effect is less significant in a short-term relationship and becomes insignificant after accounting for the impact of length of work experience of the decision-makers. The experimental research approach and results provide managerial implications for effective allocation of resources, as well as policy suggestions for the broader operations and supply chain systems.