an experimental investigation of the interactions ... - Vlerick Public
an experimental investigation of the interactions ... - Vlerick Public
an experimental investigation of the interactions ... - Vlerick Public
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For each supplier selection, subjects had to indicate <strong>the</strong>ir purchase intention for bothsuppliers by moving a slider over a horizontal bar. 6 By doing this, <strong>the</strong>y divided 100 points between<strong>the</strong> two new suppliers. The more points <strong>the</strong>y gave at a supplier, <strong>the</strong> higher <strong>the</strong>ir purchase intentionfor that supplier. If subjects were indifferent between both suppliers, <strong>the</strong>n both suppliers received 50points. Based on <strong>the</strong> subjects’ purchase intention, we constructed <strong>the</strong> dependent variable for ourstatistical tests. We tr<strong>an</strong>sformed <strong>the</strong> purchase intention to a scale from zero to 100 where zeroindicates <strong>the</strong> highest preference for <strong>the</strong> supplier that optimizes <strong>the</strong> perform<strong>an</strong>ce <strong>of</strong> <strong>the</strong> purchasingdepartment (i.e. supplier that causes <strong>the</strong> lowest total costs) <strong>an</strong>d 100 indicates <strong>the</strong> highest preferencefor <strong>the</strong> supplier that optimizes <strong>the</strong> perform<strong>an</strong>ce <strong>of</strong> <strong>the</strong> firm as a whole (i.e. supplier that optimizes<strong>the</strong> trade-<strong>of</strong>f between total costs <strong>an</strong>d revenue-generating possibilities). Thus, <strong>the</strong> higher <strong>the</strong> score forour dependent variable, <strong>the</strong> more subjects prefer a supplier that improves overall firm perform<strong>an</strong>ce.For our statistical tests, we take for each subject <strong>the</strong> average score <strong>of</strong> <strong>the</strong> six supplier selections. Wewill call our dependent variable <strong>the</strong> degree <strong>of</strong> firm-optimizing supplier selections.3.3 Experimental M<strong>an</strong>ipulationsThe incentive system is m<strong>an</strong>ipulated by providing particip<strong>an</strong>ts with <strong>an</strong> incentive to maximize<strong>the</strong> perform<strong>an</strong>ce <strong>of</strong> <strong>the</strong> purchasing department (i.e. minimize <strong>the</strong> total costs <strong>of</strong> a supplier) or tomaximize firm perform<strong>an</strong>ce (i.e. optimize <strong>the</strong> trade-<strong>of</strong>f between revenue-generating possibilities <strong>an</strong>dtotal costs). The department-based incentive formula is as follows:Total costs <strong>of</strong> a supplier – 10% <strong>of</strong> <strong>the</strong> revenues that a supplier will generate if he isselected.Subjects with <strong>the</strong> department-based incentive were informed that <strong>the</strong>y should focus onminimizing <strong>the</strong> value <strong>of</strong> <strong>the</strong>ir incentive formula (i.e. minimizing total costs <strong>of</strong> a supplier). The firmbasedincentive formula is as follows:<strong>an</strong>d in two supplier selections <strong>the</strong> total costs <strong>of</strong> one supplier was higher while <strong>the</strong> total costs <strong>of</strong> <strong>the</strong> o<strong>the</strong>r supplier waslower compared to <strong>the</strong> current supplier. Within each group <strong>of</strong> two supplier selections, <strong>the</strong>re was one (one) supplierselection in which <strong>the</strong> total costs <strong>of</strong> both new suppliers were in a small (large) r<strong>an</strong>ge around <strong>the</strong> total costs <strong>of</strong> <strong>the</strong> currentsupplier.6 Marketing research has already shown that purchase intention scales are good predictors <strong>of</strong> real buying behavior (Wrigth<strong>an</strong>d MacRae 2008).14