The Handbook of Behavioral Operations Management The Handbook of Behavioral Operations Management Social and Psychological Dynamics in Production and Service Settings EDITED BY ELLIOT BENDOLY WOUT VAN WEZEL AND DANIEL G. BACHRACH 1 1 Oxford University Press is a department of the University of Oxford. It furthers the University’s objective of excellence in research, scholarship, and education by publishing worldwide. Oxford New York Auckland Cape Town Dar es Salaam Hong Kong Karachi Kuala Lumpur Madrid Melbourne Mexico City Nairobi New Delhi Shanghai Taipei Toronto With offices in Argentina Austria Brazil Chile Czech Republic France Greece Guatemala Hungary Italy Japan Poland Portugal Singapore South Korea Switzerland Thailand Turkey Ukraine Vietnam Oxford is a registered trade mark of Oxford University Press in the UK and certain other countries. Published in the United States of America by Oxford University Press 198 Madison Avenue, New York, NY 10016 © Oxford University Press 2015 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of Oxford University Press, or as expressly permitted by law, by license, or under terms agreed with the appropriate reproduction rights organization. Inquiries concerning reproduction outside the scope of the above should be sent to the Rights Department, Oxford University Press, at the address above. You must not circulate this work in any other form and you must impose this same condition on any acquirer. Library of Congress Cataloging-in-Publication Data The handbook of behavioral operations management : social and psychological dynamics in production and service settings / edited by Elliot Bendoly, Wout van Wezel, and Daniel G. Bachrach. p. cm. Includes bibliographical references and index. ISBN 978–0–19–935721–5 (alk. paper) — ISBN 978–0–19–935722–2 (alk. paper) 1. Production management. 2. Management science—Psychological aspects. I. Bendoly, Elliot. II. Wezel, Wout van. III. Bachrach, Daniel G. TS155.H28133 2015 658.5—dc23 2014046429 9 8 7 6 5 4 3 2 1 Printed in the United States of America on acid-free paper CONTENTS Contributors vii Introduction ix Elliot Bendoly PART ONE Background and Theoretical Considerations 1. The Study of Behavioral Operations 3 Stephanie Eckerd and Elliot Bendoly 2. The Virtuous Cycles of Experimental Learning 24 Elliot Bendoly PART TWO Lessons in Production and Service Contexts 3. Synch and Swim: Managing and Mismanaging Process Constraints and Variability 33 Elliot Bendoly 4. Process and Perception: Kristen’s Cookie Company from a Behavioral Point of View 44 Steve V. Walton and Michael Alan Sacks 5. Outflanking Undecided, Ever-Changing Puzzles: The Role of Human Behavior in Scheduling 56 Wout van Wezel, Kenneth N. McKay, and Toni Wäfler 6. Hitting the Target: Process Control, Experimentation, and Improvement in a Catapult Competition 97 George Easton 7. The Wait or Buy Game: How to Game the System That’s Designed to Game You Back 120 Anton Ovchinnikov 8. Seeing the Forest (and Your Tree): Envisioning Motivation and Performance in Work Design 140 Karen Eboch vi Contents 9. Satisfaction Architect: Service Design and Its Behavioral Implications 154 Louis St. Peter, Walter L. Wallace, and Yusen Xia 10. Sharing the Load: Group Behavior and Insights into Simulating Real-World Dynamics 176 Diego Crespo Pereira and David del Rio Vilas PART THREE Lessons in Supply Chains and Integrative/Enabling Technology 11. Booms, Busts, and Beer: Understanding the Dynamics of Supply Chains 203 John Sterman 12. Kicking the “Mean” Habit: Joint Prepositioning in Debiasing Pull-to-Center Effects 238 Jaime A. Casteneda and Paul Gonçalves 13. Sharing the Risk: Understanding Risk-Sharing Contracts from the Supplier’s Perspective 251 Karen Donohue and Yinghao Zhang 14. A Chain of Hands: Prosocial Integration in a Coffee Supply Chain Setting 268 Tung Nhu Nguyen and Khuong Ngoc Mai 15. Supply Chain Negotiator: A Game of Gains, Losses, and Equity 284 Young K. Ro, Yi-Su Chen, Thomas Callahan, and Tsai-Shan Shen 16. ERP Simulator: Examining Competitive Supply Chain Team Dynamics 340 David E. Cantor and Pamela Manhart 17. The Fresh Connection: Cross-Functional Integration in Supply Chain Management 359 Sander de Leeuw, Michaéla C. Schippers, and Stefan J. Hoogervorst 18. Wrapping It Up: Behavior and Decision-Making Revealed in Business Simulation Games 378 Arturo Orozco and Miguel Estrada 19. Behavioral Operations in Practice and Future Work 398 Elliot Bendoly and Daniel G. Bachrach Index 413 Website and Links to Activities: www.ombehavior.com (permalink) CONTRIBUTORS Daniel G. Bachrach, University of Alabama Elliot Bendoly, Ohio State University Thomas Callahan, Michigan State University David E. Cantor, Iowa State University Jaime A. Casteneda, University of Lugano Yi-Su Chen, Michigan State University Sander de Leeuw, VU University Amsterdam & Nottingham Trent University David del Rio Vilas, UDC–Universidade da Coruña Karen Donohue, University of Minnesota Miguel Estrada, IPADE Business School George Easton, Emory University Karen Eboch, Bowling Green State University Stephanie Eckerd, University of Maryland Paul Gonçalves, University of Lugano Miguel Guzman, IPADE Business School Stefan J. Hoogervorst, Involvation Khuong Ngoc Mai, International University, Vietnam Pamela Manhart, Iowa State University Kenneth N. McKay, University of Waterloo Tung Nhu Nguyen, International University, Vietnam Arturo Orozco, IPADE Business School Anton Ovchinnikov, Queen’s University Diego Crespo Pereira, UDC–Universidade da Coruña Young K. Ro, Michigan State University Michael Alan Sacks, Emory University Tsai-Shan Shen, Eastern Michigan University Michaela Schippers, Rotterdam School of Management John Sterman, Massachusetts Institute of Technology Louis St. Peter, Georgia State University Wout van Wezel, University of Groningen viii Contributors Toni Wäfler, University of Applied Sciences, Northwestern Switzerland Walter L. Wallace, Georgia State University Steve V. Walton, Emory University Yusen Xia, Georgia State University Yinghao Zhang, Salisbury University INTRODUCTION ELLIOT BENDOLY ■ Let’s start with a definition: Behavioral operations management explores the interaction of human behav- iors and operational systems and processes. Specifically, the study of be- havioral operations management has the goal of identifying ways in which human psychology and sociological phenomena impact operational perfor- mance, as well as identifying the ways in which operations policies impact such behavior. In 2013, the following question was posed by an academic scholar trained in the normative mathematical modeling of operations research: How much knowledge of Behavioral Operations (BeOps) is necessary for the field? Such a question would strike most people as odd. One might as well as ask how much knowledge of genetics is needed. The answer’s simple: All of it. Effective de- cisions in a real-world context require understanding of the key elements of that context. And as any operations manager worth her salt would tell you, people are key to operations. Or more directly put, as a counter to the original question: If we don’t account for the human factor in the operational contexts we hope to manage, how can we possibly hope to manage them? A LITTLE BACK HISTORY As a point of fact, the academic field of operations has long suffered from a discon- nect with practical application. Many of the mathematical models, which have been the hallmark of OR scholarship, are not being applied (or even referenced) by practice. It’s not a “newly recognized” problem either. The identification of and attempts to resolve this deficit go back to the founding of journals such as