The anchoring heuristic and overconfidence bias among frontline employees in supply chain organisations.

Abstract

The purpose of this study is to assess the extent to which the anchoring heuristic and overconfidence bias can lead to inaccurate judgments in operational settings among frontline employees of complex multi-stakeholder supply chain organisations. Data is obtained from an experiment-based questionnaire of frontline employees in a United Kingdom based freight forward and materials handling company. Analysis is undertaken using descriptive and inferential statistics. Results suggest that frontline employees within this complex multi-stakeholder supply chain organisations, consistently overestimated probabilities when framed in a conjunctive manner. They also consistently underestimated probabilities when framed in a disjunctive manner and exhibited considerable overconfidence in their judgements. Mixed evidence was found regarding susceptibility to anchoring and overconfidence in terms of level of expertise and geographical location. Overall, the study elucidates the specific dimensions of anchoring and overconfidence that may lead to judgmental biases in complex multi-stakeholder supply chain decisions. The findings highlight the critical role of communication in establishing reflective monitoring of, and improvements to, heuristics usage by frontline employees involved in daily supply chain decisions. It also suggests that practitioners should be encouraged to reflect on whether, when and how anchoring and overconfidence should be employed as key judgmental aids in statistical estimations.

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Identifiers

ORCID for Alasdair Marshall: orcid.org/0000-0002-9789-8042

ORCID for Ian Dawson: orcid.org/0000-0003-0555-9682

ORCID for Mario Brito: orcid.org/0000-0002-1779-4535

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