A SUPPLY CHAIN MANAGER SELECTION METHODOLOGY: EMPIRICAL TEST AND SUGGESTED APPLICATION

Journal of Business Logistics, 2006 by Richey, R Glenn, Tokman, Mert, Wheeler, Anthony R

With the expanding global economy, no managerial position requires a broader set of skills than that of the supply chain manager. Understanding the complexities of filling this vital managerial position, recent conceptual research has called for the development of a tool designed to identify the top candidates for supply chain positions. This research presents a full test of a three hurdle methodology for supply chain manager selection. Empirical results reported here suggest that managers must possess superior general mental aptitude, need for achievement, and adaptability for firms to maximize performance.

Key Words: Adaptability; Intelligence; Need for Achievement; Supply Chain Manager Selection

INTRODUCTION

Today the mantra of academics, consultants, and business people alike is to create a sustainable competitive advantage. Thus, firms in the supply chain are striving to partner or acquire valuable resources to leverage their position in the market (Olavarrieta and Ellinger 1997). Supply chain management research has focused on resource capital categories including financial, physical/equipment, technological, market based, and (to a lesser extent) human resources. The limited focus on human capital in supply chain research is interesting due to the fact that individuals are the manipulators of all of the other four resource categories. As Richey and Wheeler (2004, p. 90) suggest, "employee knowledge, skills, abilities, and intelligence reside at the heart of generating sustainable competitive advantage for organizations." Simply stated, having resource competencies in the other areas is restricted by the quality of the firm's talent in supply chain management positions.

Most managers understand the complexities of supply chain management and the importance of placing the correct prospect into the correct position. Still, there is little guidance for analyzing manager selection given multiple criteria in a supply chain context. Employing a resource based view of supply chain management, the current study tests the three hurdle methodology (3HM) suggested by Richey and Wheeler (2004). The model is intended to provide the field with a tool for selecting supply chain managers and to encourage future research in the area. To achieve the study's purpose, the manuscript defines the 3HM model and develops three hypotheses based upon review of the relevant literature. Next, data collection is discussed and multivariate decision tree analysis is employed to select the best possible candidate. Managerial application of the tool is discussed including direct use and testing of a pool of actual supply chain managers.

A Very Brief Review of Selection Research in Human Resource Management

Organizations seek to hire individuals possessing certain desired knowledge, skills, abilities, and competencies by identifying workers through effective selection techniques (Sacken and Roth 1996). These techniques have been proven to reduce costs by lessening the need for managerial monitoring (Klein 1999) and by decreasing Type I (e.g., failing to hire a desirable candidate) and Type II (e.g., hiring an undesirable candidate) selection errors often associated with employee turnover (Hunter, Schmidt, and Judiesch 1990). Furthermore, organizations can utilize valid and reliable selection systems to identify and select employees with required competencies and cultural fit (Muchinsky 2000).

Recent meta-analyses in the field of personnel and human resources management provide empirical evidence to support the selection norm that organizations utilize general mental ability tests, such as intelligence tests or "G" tests (IQ tests) to capture the greatest criterion-related validity in the selection process (Behling 1998; Hough and Oswald 2000; Robertson and Smith 2001 ; Salgado, Viswesvaran, and Ones 2001). These tests account for up to 33% of the variability on any given performance measure independent of other individual-level predictors of job performance (Lehrer and Hieronymus 1997; Schmidt and Hunter 1998). Despite its usefulness, many researchers report that IQ measures provide only one facet for predicting the performance required to succeed on the job (Hough and Oswald 2000; Rynes, Brown, and Colbert 2002; Salgado, Viswesvaran, and Ones 2001).

The question of general mental ability, specifically intelligence, lies in understanding human competencies (Gardner 1999). The definition of intelligence from Gardner (1985) expands the concept of intelligence to include the ability to solve complex problems or create service solutions and products. This definition addresses the concept and micro-environmental context of intelligence (Sternberg 1997). Other researchers view intelligence as a person's efficiency in processing information (Zeidner 1995). Vis a vis selection, whatever the applicant knowledge, skill, or ability being assessed, it is incumbent upon the organization to select the highest qualified applicant to perform the job. Organizations greatly increase the utility of their selection systems by hiring the highest quality applicants (Murphy 1986). Further researchers emphasize the importance of selection by stating that an organization's financial health relies upon its ability to select and place prospective employees into the proper job (Hunter, Schmidt, and Judiesch 1990). Therefore, organizations need to implement a selection system that increases the probability of delivering the highest quality applicants to the personnel decision-makers in the organization.