To read the full version of this content please select one of the options below:

Confidence and supply chain disruptions: Insights into managerial decision‐making from the perspective of policy

Harri Lorentz (Logistics Programme, Turku School of Economics, Turku, Finland)
Olli‐Pekka Hilmola (Industrial Management Department, Lappeenranta University of Technology, Lappeenranta, Finland)

Journal of Modelling in Management

ISSN: 1746-5664

Article publication date: 26 October 2012

Abstract

Purpose

This conceptual paper aims to shed light on the nature and determinants of managerial behaviour when affected by supply chain disruptions. It aims to argue that the managerial decision‐making process is an important component in determining the eventual long‐term impact of a supply chain disruption.

Design/methodology/approach

The paper introduces a continuous simulation model that is based on a Bayesian robot decision‐maker. Using the system dynamics approach, it illustrates the process of evaluating competing hypotheses of functional vs dysfunctional supply chain design in a disruption scenario. Model validity is assessed by means of a case study based on secondary data.

Findings

The model provides insight into the drivers of decision‐maker confidence dynamics that are used when evaluating the competing hypotheses. Furthermore, it identifies the psychological distortions that make actual managerial inference processes different from the Bayesian robot and incorporate these adjustments into the system dynamics model. Several propositions about the nature and determinants of decision‐maker confidence are stated.

Practical implications

For policy makers, the paper clarifies the important moderating role of confidence in the realisation of wider implications of supply chain disruptions, especially from the perspective of industrial development, and trade and transport facilitation.

Originality/value

The research enhances understanding of the wider implications of supply chain disruptions, contributing to behavioural research in logistics and supply chain management.

Keywords

Citation

Lorentz, H. and Hilmola, O. (2012), "Confidence and supply chain disruptions: Insights into managerial decision‐making from the perspective of policy", Journal of Modelling in Management, Vol. 7 No. 3, pp. 328-356. https://doi.org/10.1108/17465661211283304

Publisher

:

Emerald Group Publishing Limited

Copyright © 2012, Emerald Group Publishing Limited