Behavioral Supply Chain Management

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1.0 Introduction to Behavioral Supply Chain Management

            According to Tokar, (2010, pp. 89), Behavioral Economics gives it more time but it has found little application in supply chain management. For this reason, integrating Behavioral economics into supply chain has been an issue of contension.  Many studies have taken a simpler approach while explaining the Behavioral Supply Chain Management (BSCM) research through the use of optimal technical solutions as well as enhanced practices. However, significant practical proof exist depicting individuals in supply chains behave differently from the various behavioral theoretical predictions. And so, the major effects of human behavior have been overlooked by the various research findings dealing with BSCM (Tokar, 2010, pp. 89). For that reason, it is important to recognize that supply chain interactions are often vulnerable to cultural differences as businesses are affected by the level of trust between business entities (Wallenburg et al., 2011, pp. 83). 

            Therefore, the main reason for the discrepancy between practice and theory is underlined by human behavioral components effects on the simple facts of Supply Chain Management (SCM) for instance technical systems (Sweeney, 2013, pp. 73). In consequence, it is significant to acknowledge that humans are not entirely rational in their actions and are affected by their cultural background; hence this inconsistency explains the significance of people’s behavior concerning the basics of the supply chain. As a result, supply chain should also focus on managing the different behavioral aspects affecting the practice (Wallenburg et al., 2011, pp. 98). Nonetheless, BSCM research and studies are notably in the infancy stages and as such falls short of the far-reaching length boasted by fully researched disciplines for instance Supply Chain Management. In reality, behavioral economics has been in existence for an extended period, but it has been considered and applied selectively in SCM. Notably, Supply Chain Management can be described as future-oriented organizational forms; for that reason, this paper-based essay aims to investigate the development of the position held by BSCM within the broad discipline of SCM using the Beer Distribution Game.

2.0 Literature Review

            The adoption of the studies analyzing BSCM in relations to SCM is fairly still novel; however, presently attention towards BSCM has increased significantly. This situation has been triggered by various events affecting the supply chain as well as the intensity of disruptions due to effects of human behavior, therefore resulting in serious problems facing the firms involved (Sweeney, 2013, pp. 75). And so, presently supply chains are more complicated than before due to human factors, for instance, cultural differences between the parties involved (Tokar, 2010, pp. 90). The difficulties facing supply chain has underlined the relationships and interactions in the business network due to the quickly changing customer preferences as well as the need to expand production. Furthermore, according to Carter et al. (2007, pp. 634), firms try to streamline and reduce the supply base in the bid to cut down costs with the main aim being to create and secure the BSCM despite being vulnerable to human behavioral aspects.

            Besides, current SCM initiatives bear the potential to simplify operations in the business environment as well as increasing the instability of supply chains as a result of the progressively more complex difficulties that make supply chain vulnerable to human behavior (Wallenburg et al., 2011, pp. 85). As such, it is important to analyze the fundamental effects of human behavior have been overlooked by the various research dealing with BSCM. For that reason, supply chain interactions are often vulnerable to cultural differences as businesses are affected by the level of trust between business entities (Tokar, 2010, pp. 90). Therefore, there is imperial evidence that depicts research has addressed the development of BSCM so that to guarantee continuity of the supply chain by identifying the various forms of human behavior that possesses negative implications on the fundamentals of supply chain management. In consequence, these contributions have played a significant role in providing vital insights that have expanded the understanding concerning effects and causes of human behavior in regards to supply chain decision-making processes.

            To further add on that, supply chains can be summed up as incredibly complex with numerous moving parts (Kalkanci et al., 2014, pp. 269). To deeply understand the complexities affecting supply chain, it is significant to recognize that supply chain space comprises of operational and strategic activities. As such, strategic activities include distributors while on the other hand; operational activities include logistics,...