Supply Chain Risk and Protection Motivation: Why Some Managers Act Proactively (and Others Don't)

Abstract

The complexity and interconnectedness of modern supply chains expose firms to the threat of being affected by supply chain disruptions. Such disruptions may entail severe consequences for firm performance and pose considerable managerial challenges. In order to be prepared for these events, it is crucial for managers to decide on whether or not to implement proactive measures to protect their firms from adverse disturbances. However, it is unclear which factors influence this decision. Protection motivation theory, which originated from research on health-related decision making behavior, suggests that an individual’s intention to adopt a proactive action to cope with a threat results from cognitive appraisal processes which evaluate characteristics of a potential coping response (e.g., the response’s effectiveness in averting the threat) and the threat (e.g., its severity). Building on this framework, we conduct an analysis of what drives or prevents individuals from taking proactive action to cope with the threat of future supply chain disruptions. The exploratory results received from discrete choice experiments provide interesting insights into behavioral aspects of supply chain risk management, and have relevant theoretical and practical implications.