Reducing uncertainty in supplier selection decisions: Antecedents and outcomes of procedural rationality

Abstract

Abstract Supplier selection decisions are characterized by a high degree of uncertainty. We draw upon the behavioral operations management and decision‐making literatures to examine factors that lead to the adoption of procedural rationality as a decision strategy. In addition, we emphasize the effect of procedural rationality on decision‐makers’ perceived uncertainty and subsequent supplier decision performance. Our structural equation model with cross‐country survey data from 461 respondents in the United States and China reveals that (i) organizational, situational, and personal antecedents significantly influence the use of procedural rationality, (ii) procedural rationality is effective in reducing uncertainty in supplier selection decisions, and (iii) the reduction in decision uncertainty improves supplier decision performance. We also emphasize contextual idiosyncrasies between China and the United States.