Impact of Experience and Education on Risk Attitude and Risk Perception of Supply Chain Management Professionals

Abstract

Globalization and technology have allowed supply chains to be geographically spread across the world. Supplier evaluation and selection play a major part in the continuity of these supply chains. Our study attempts to answer three fundamental questions related to the risk attitude and risk perception of Supply Chain Management (SCM) professionals in the evaluation and selection of suppliers. What is the relationship between their risk attitude and risk perception? How do SCM professionals with different risk attitudes differ in the way they perceive risk? Last, do factors such as education and experience affect the relationship? We test these questions using empirical data from a sample of 307 randomly selected SCM professionals. Prospect theory and bounded rationality theory are both used in efforts to mutually develop the scope of this study. Our findings suggest a negative relationship exists between risk attitude and risk perception and that the relationship is strongly significant. The results showed that experience did not moderate the relationship; however, formal education in supply chain management moderate the relationship. SCM professionals with formal education in SCM tend to perceive a higher risk of supply chain disruptions for given scenarios compared to SCM professionals without formal education in SCM.