Executive decision‐making traps and B2B online reverse auctions

Purpose – The purpose of the paper is to describe common decision‐making traps experienced by senior managers when considering the use of online reverse auctions as a means for sourcing goods and services and to reduce purchase prices. Design/methodology/approach – The paper examines the information evaluated and decision‐making process used by senior managers in relation to common decision‐making traps. Findings – Decision‐making traps are shown to lead to poor decisions related to the use of online reverse auctions. Research limitations/implications – Exceptions to observations and findings presented may exist. The paper provides a foundation for further investigation on how strategic sourcing processes are evaluated and selected by senior managers. Practical implications – The paper is useful for managers as a guideline to evaluate sourcing options and avoid errors that can interrupt supply, reduce product or service quality, extend lead times, increase costs, or impair buyer‐seller relationships. It is helpful for academics to understand industrial decision‐making processes regarding the evaluation of sourcing options. Originality/value – The paper explains decision‐making traps and provides the rationale for their existence in decisions to use online reverse auctions.