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Sustainable Supplier Selection under Financial Hardships: The Conflicting Impact of Spatial and Temporal Psychological Distances

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  • Alain Balaguer-Mercado

    (School of Information Systems and Technology Management, Business School, University of New South Wales, Sydney, NSW 2052, Australia)

  • Samuel N. Kirshner

    (School of Information Systems and Technology Management, Business School, University of New South Wales, Sydney, NSW 2052, Australia)

  • Chung-Li Tseng

    (School of Information Systems and Technology Management, Business School, University of New South Wales, Sydney, NSW 2052, Australia)

Abstract

Economic crises stress trade-offs between costs and sustainability for environmentally orientated firms impacting supply-chain management decisions. Inspired by the disruption to supply caused by the COVID-19 pandemic, we explore supplier selection during a financial crisis, studying the impact of psychological distance on the cost–environmental performance trade-off. Across three experiments ( N = 420), we examine the choice between a low-cost and an environmental supplier at close and far psychological distances. Study 1 and Study 2 demonstrate that closer spatial and social distances, respectively, increase the preference for the environmental supplier. Study 3 extends these studies by showing that distance influences perceptions of the firm’s objectives, mediating supplier preference. In contrast, Study 4 shows that a far temporal distance increases the preference for selecting the environmental supplier, differing from spatial distance, due to a reversal in the appraisal of the firm’s objectives. Taken together, our results provide a greater understanding of the cognitive influences on sustainable procurement decision-making during the COVID-19 crisis.

Suggested Citation

  • Alain Balaguer-Mercado & Samuel N. Kirshner & Chung-Li Tseng, 2023. "Sustainable Supplier Selection under Financial Hardships: The Conflicting Impact of Spatial and Temporal Psychological Distances," Sustainability, MDPI, vol. 15(12), pages 1-21, June.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:12:p:9561-:d:1170869
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    References listed on IDEAS

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    Cited by:

    1. Zhigang Fan & Tae-Won Kang, 2023. "Linking Sustainable Supplier Selection to Firm’s Sustainable Performance: The Moderated Mediating Role of Supplier Development and Leadership for Functional Integration," Sustainability, MDPI, vol. 15(12), pages 1-13, June.

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