Identifying Influential Factors in Strategic Service Partner Selection

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Identifying Influential Factors in Strategic Service

Partner Selection

A survey-based research on how the decision of selecting a Strategic Service Partner providing a Knowledge-Intensive Service is made

10th_{December 2018}

Helena Mollá Garcia

M.Sc. Double Degree Operations Management Supervisor: Dr. Ying Yang

Second supervisor: Dr. Stefano Fazi

MSc Operations and Supply Chain Management Newcastle University Business School

5 Barrack Road, Newcastle Upon Tyne, NE1 4SE Student number: 170542623

MSc Technology and Operations Management

University of Groningen - Faculty of Business and Economics Nettelbosje 2, 9747 AE Groningen

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Abstract

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Acknowledgements

This dissertation is the culmination of almost one year and half of hard-work towards the objective of attaining the dual master’s degree of Operations Management. Nevertheless, this piece of work would not have not been possible to be done all by myself and this is why, I would like to take this opportunity to recognise everyone who assisted me throughout this academic journey. First of all, I would like to thank the two supervisors of this project. Thank you, Dr Ying Yang for all those skype meetings while I was in Groningen trying to show me the direction to conduct my research. Moreover, I highly appreciate that you always had your office door open to have a relaxed talk in order to clarify any doubt that emerged. Thanks for making me feel welcome. I would also like to acknowledge Dr Stefano Fazi role as second supervisor, who despite being in Groningen, he provided me with useful feedback which enhanced me to improve my work.

I would like to give my sincere gratitude to my family who despite being far away during this academic journey, I always felt them close, encouraging me and cheering me up. I must admit I never lacked comforting and encouraging words. They are the best. Although my relatives were far, I never felt alone, and this is thanks to all the people I have been lucky to meet in Newcastle, in Groningen as well as my classmates who have been accompanying me in the two cities. Thanks to all of them who have made this experience not only academically but also personally fulfilling.

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List of Abbreviations

KIS Knowledge-Intensive Services

SSP Strategic Service Partner

SCE Sustainability Culture Elements

TBL Triple Bottom Line

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1. Introduction

Services and the purchasing of services to specialist firms play a crucial role in the current economic context. An example supporting this trend is United Kingdom’s GDP, whose 80% income comes from the service sector (Crown, 2018). Within the services sector, Knowledge-Intensive Services (KIS) are a type of service characterised for being complex, comprising specialised value-added capabilities and delivered by high qualified workers (D’Antone and Santos, 2016). In the current knowledge-based economy, there has been an increasing number of companies (from now on focal companies) strategically outsourcing parts of its internal operations by purchasing KIS. The reason to this, has been to gain access to specialised capabilities and attain a sustainable competitive advantage (Holcomb and Hitt, 2007).

Once the decision of outsourcing is taken, the focal company must face a second one: the selection of a Strategic Service Partner (SSP), which will be the scope of this research. An SSP is a strategic partner characterised for providing a KIS to a focal company. Despite the increasing relevance of KIS, still most of the research has focused on the selection of strategic partners who provide manufacturing goods (Liu et al, 2017, Feng et al. 2011, 2012). Nevertheless, selecting an SSP differs from selecting a strategic partner providing a manufacturing good because of the specific challenges encountered in the former decision (Sengupta et al. 2006). These challenges could be the high uncertainty context in which the decision is made, the high dependency of focal companies on the SSP and the lack of specialisation because of being a decentralised decision (Ellram, 20014; Wang, et al., 2015; Harvey, 2016).

At organisational level, focal companies usually select an SSP following an established set of criteria. Nevertheless, individual decision-makers are the ones who eventually face the final selection among those candidates fulfilling the required criteria (Goebel et. al, 2012). Usually, strategic partner selection literature assumes that the decision-maker will follow an objective and rational decision-making process (Schorsch, et al.,2017; Croson et al., 2013; Tokar, 2010). However, in high uncertain and complex contexts like SSP selection, decision-making processes are influenced by organisational and individual factors (Chai and Ngai, 2015; Renfree et al. 2014; Ren Bar-Eli, et al., 2011). Organisational factors could be either from the focal company or the SSP company, while individual factors are those intrinsic within the decision-maker, which include its human behaviour and personality (Bonner, 1999).

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7 In the service setting, the influence of sustainability has started to be studied in the logistics industry (Faisal, et al., 2017; Davis-Sramek, 2018; Thomas et al., 2016). Nonetheless, due to KIS challenges and characteristics, logistics services and KIS are industries which highly differ. Contrary to logistic services, KIS are characterised for being knowledge-based, for having low levels of tangibility and manual labour and being riskier due to the difficulty of assessing their quality (Sonmez, and Moorhouse, 2010). These characteristics and the aforementioned challenges, lead to the fact that reputational consequences (either positive or negative) of considering the SSP’s sustainability strategy could be undermined by the decision-maker (Ellram et al, 2004; Hansen et al. 2008).

There are other organisational and individual factors associated with sustainability which have also been found to influence behaviour and in turn, decision-making (McCrae and Costa, 2003). On the one hand, Agreeableness, a personality dimension which individuals are at a lower or higher level, is a factor that has been related to individuals highly environmental concerned and highly engaged with prosocial attitudes (Farizo et al., 2016; Hirsh 2014, 2010). On the other hand, organisational culture is a factor found to influence employees’ performance and decision-making (Treviño et al.,1998). Hence, decision-makers perceiving sustainability as an important part of their companies’ culture, could also be influencing their SSP final selection. Despite the relationship found between sustainability, Agreeableness and sustainability culture, the former has been recognised as a complex concept which can hardly be generalisable across industries (Pullman et al., 2009). This fact makes questionable that these factors grounded in literature will significantly be influential factors in the SSP selection context, where sustainability has not been found as decisive one.

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8 SSP’s sustainability strategy, focal company’s sustainability culture and decision-maker’s Agreeableness level, will influence the decision-decision-maker’s final selection.

This research is going to be conducted by the means of an electronic survey by collecting input from professionals who have had experience in selecting an SSP. Firstly, it is going to be identified at organisational level, the selection criteria that focal companies consider more relevant when assessing an SSP. Afterwards, at individual level, questions comprising the different influential factors will be included. Once the data is collected, statistical tests will be used to gain practical insights assisting both the SSP and focal companies. From the SSP perspective, conclusions could assist them in realising which aspects influence the decision-maker’s final selection in order to improve them and increase its chances of being chosen. From the focal companies’ perspective, better understanding on how this critical decision is being made could be gained, allowing them to make well-informed decisions.

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2. Literature review

2.1 Knowledge-Intensive Services

2.1.1 The importance of Knowledge-Intensive Services

The service sector is highly diversified, including a wide range of products and industries such as logistics, insurance or public administration. Therefore, it is necessary to define the type of service being outsourced in this paper. For the purpose of this research, the chosen focus will be the purchase of KIS. Currently, due to the knowledge-based economy we live in (D’Antone and Santos, 2016), KIS is one of the fastest-growing sectors, being in 2016 one of the main engines of growth in the European Union, representing 11% of its GDP (European Commission, 2018).

The main characteristic that differentiates KIS from general services is that the former have low levels of manual labour, they require workers with higher degree of education, knowledge or expertise and generally, they operationalise aiming to support other businesses’ activities (Sonmez, and Moorhouse, 2010). These kinds of services comprise a variety of professional operations and can be mainly classified into two groups: 1) Advisory services such as financial services, management consultancy, legal services, accountancy or advertising; and 2) Technical services, such as IT services, engineering, architectural or design (D’Antone and Santos, 2016, Brandon Jones, 2016; Harvey 2016).

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2.1.2 The challenges of Knowledge-Intensive Services

After the focal company decides to strategically outsource its strategic internal functions, another decision arises: the selection of an SSP, which will provide them with a KIS. The selection of the SSP is performed within a service supply chain. Selecting a strategic partner in the manufacturing supply chain differs from doing it in the service one (Sengupta et al. 2006). In the services setting, and more concretely in the KIS sector, the selection tasks are carried out in a more complex context due to KIS characteristics and the challenges that the industry entails which this section will unveil (Sonmez, and Moorhouse, 2010).

2.1.2.1 High Uncertainty

A significant component characterising service supply chains is that human labour plays a predominant role (Sengupta et al. 2006). This is even intensified with KIS, as these types of services are supplied within service only supply chains where low levels of tangible products and manual labour are involved (Wang et al, 2015; Sonmez, and Moorhouse, 2010). The uniqueness of human performance and judgement and the higher levels of intangibility that KIS possess, challenge the decision-maker not only in the assessment of an SSP, but also in the possibility to compare the potential candidates to its competitors (Hansen et al., 2008; Løwendahl et al. 2001).

KIS are also characterised for the impossibility to fully evaluate the quality of the service delivered prior to its purchase or consumption (Hansen et al., 2008; Liu et al.,2017). Solely, and once after the SSP has already been contracted and the relationship has commenced, the focal company would be able to measure if the value perceived fulfils its expectations. Because of the immeasurability nature of KIS, the service contract creation, including the service specifications and service level agreements, is another challenge that focal companies experience when selecting an SSP (Ellram et al. 2004). Due to KIS’ intangibility, immeasurability and higher human involvement, focal companies are subject to an irreducible uncertainty towards the SSP selection (Wang, et al., 2015; Harvey, 2016).

2.1.2.2 High Dependency

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11 consecutive relationship could take place where the SSP performs strategic back-end service activities without having direct contact with the end-customer (Feng et al., 2011; Chai and Ngai, 2015). On the other hand, the SSP could provide front-end services, having a direct interaction with the end-customer (Li and Choi, 2009). In both scenarios, SSPs performance impacts the focal company’s operational success. Moreover, in the latter, the SSP is a key contributor in the creation of value for the end-customer, even sometimes exceeding theirs (Essig and Amann, 2009). Therefore, the focal company aiming to successfully give the highest customer services to their end-customers, it highly depends on the service performance of its SSP. Service performance, refers to delivering to the focal company what they believed they have contracted (Ellram et al. 2004). Furthermore, in the case where the SSP has direct contact with the end-customer, there is even a higher level of dependence due to the unfeasibility to remotely continuously monitor the SSP’s activity and the treatment given to the end-customer.

2.1.2.3 Decentralised decision-making framework

Another factor contributing to be the SSP selection a challenging decision, is the lack of uniformity on where it takes place within a company (Ellram, et al. 2004). Generally, in manufacturing supply chains a specialised department such as purchasing, or procurement centrally undertakes those tasks. However, KIS besides being sometimes selected by the purchasing department, it can be managed by the department outsourcing its internal activities. For instance, legal consultants providing an specific legal service can be selected by an employee or manager within the legal department. Despite the increasing importance of the KIS sector and the growing number of companies strategically outsourcing KIS, literature in strategic partner selection within service supply chains is still underdeveloped (Feng, 2012,2011; Sonmez and Moorhouse, 2010). Considering the specific challenges associated to KIS´ procurement and the impact SSP performance has on the end-customers satisfaction level, the focal company’s operational performance (Chai and Ngai, 2015; Ganesan, 1994), its competitiveness (Holcomb and Hitt, 2007) and reputation (Hansen et al., 2008), the need to further research on how decision-makers select their SSP emerges.

2.2 Strategic Service Partner selection at organisational level

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12 Nevertheless, in service supply chains, research is still scarce (Feng, 2012). Although some criteria used to select SSP might be the same than in the manufacturing setting, given the characteristics and challenges associated to KIS, their relative importance may differ. In this section, criteria based on literature are identified and suggested according to KIS’ characteristics and challenges.

As in manufacturing supply chains, outsourcing a KIS represents a cost for focal companies. Although different costs are associated with selecting an SSP such as transactional, training, switching or monitoring costs (Yao et al., 2010), price is the most explicit way that focal companies could consider when assessing the cost that strategically outsourcing a KIS would represent. Being costs minimisation key for the company’s profitability, SSP selection could be based on the lowest quoted price. Service performance concept introduced by Ellram et al. (2004) refers to providing to focal companies what they believed they have contracted, fulfilling their quality and delivery expectations. Quality attributes in manufacturing goods are easier to measure than KIS (Sonmez and Moorhouse, 2010). Due to the nature of KIS, quality can only be evaluated after its purchase and after a certain amount of time has passed since the beginning of the transactional relationship (Hansen et al., 2008). For assessing the quality of an SSP, companies would tend to use positive referral or recommendation from a third party (Hansen et al, 2008). Regarding the concept of delivery, included also in the concept of service performance, is related to the level of delays and fulfilment of the agreed waiting times (Feng et al., 2011; Allon and Federgruen, 2009). Hence, both delivery and quality are criteria which are expected to be considered relevant by focal companies as they directly could impact the company’s operations and indirectly affect its ability to meet end-customer needs.

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13 acknowledged to be a critical aspect for KIS as it directly affects the company’s end-customer satisfaction level (Wang et al., 2015). Due to the impossibility to stock KIS, SSP’s capacity and flexibility can work as a buffer to focal companies when facing changes in demand (Ellram et al, 2004).

The main resources of KIS are the knowledge and experience comprehended within the human capital of the SSP (D’Antone and Santos, 2016). Being the access to specialised capabilities and expertise one of the reasons to strategically outsource service activities, focal companies could guide the SSP selection according to its proven knowledge on the industry or its experience delivering similar projects (Sonmez and Moorhouse, 2010). These two factors could result in delivering more suitable services to focal companies and could be key in allowing them to receive a highly customised service by the SSP. In Feng et. al (2011 and 2012), when applying their proposed mathematical decision models to holistically choose multiple service strategic partners, they considered that a collaborative utility level as an essential criterion besides price and delivery. Strategic partners in service industries require a higher level of collaboration than those in the manufacturing because in a whole service process, the focal company is subject to an irreducible uncertainty due to the abstract, variable, unique and intangible nature of knowledge (Harvey, 2016; Sonmez and Moorhouse, 2010). Digitalisation has enhanced more accurate data collection and monitorisation on the operationalization and delivery of services, giving to SSP the opportunity to collect valuable information for the focal company. In KIS setting, the willingness of the SSP for data and knowledge-sharing can be used as an instrument to measure its collaborative utility level (Hansen et al, 2008; Field et al., 2018). In addition, optimal customer services and end-customer satisfaction is attained in high coordinated and aligned supply chains, emphasising the relevance of including this criterion (Boyaci and Gallego, 2004).

A set of criteria are usually driving focal companies when selecting a strategic partner. Given the nature of KIS, it is likely that those differ from manufacturing ones. Based on the literature reviewed, this section suggested a list of criteria leading to propose the following research question:

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2.3 Strategic Service Partner selection at individual level

In strategic partner selection literature, it is mostly assumed that companies by objectively assessing and ranking the established set of criteria, will end-up following a rational decision-making process choosing the optimal option (Schorsch, et al.,2017; Croson et al., 2013; Tokar, 2010). Nonetheless, the SSP selection is not performed by companies but instead, are individual decision-makers who eventually face the final choice among all those candidates that fulfil the set of criteria (Goebel et. al, 2012). Despite of this, the human role of decision-makers is generally ignored by using behavioural assumptions to simplify human behaviour (Field et al., 2018; Bendoly et al. 2006).

Human beings do not always follow a rational and objective decision-making process (Schorsch, et al.,2017). In high uncertainty decision-making contexts or in complex ones, where demanding cognitive process capacity is required due to the number of variables being assessed, decision-makers would tend to make use of heuristics and subjective judgements to make their final choice (Renfree et al. 2014; Bar-Eli, et al., 2011). SSP selection environments are characterised for being complex and highly uncertain (Chai and Ngai, 2015). Hence, SSP selection at individual level, can be susceptible to be influenced by factors affecting the decision-makers judgment and making them deviate from the predicted rational-based outcome. Those factors influencing the decision-maker can be individual, intrinsic within the decision-decision-makers behaviour and personality, or external, from the organisational environment (Bonner, 1999). The organisational environment could be either the one from the focal company where the decision-maker works or from the SSP company. In the following sections factors influencing the SSP selection at individual and organisational level are going to be analysed.

2.4 Influential factor: Strategic Service Partner’s sustainability

strategy

Society is increasingly concerned on the negative impact of corporation’s unsustainable practices (Faisal et al., 2017; Wilson, 2015). According to Svensson et al. (2009) sustainability is a holistic concept which comprises performing business practices following an ethical decision-making while simultaneously being aware of the consequences for future generations in the financial, environmental and social dimensions. Hence, sustainability is a concept that supports the essence of TBL framework (Elkington, 1997).

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15 has focused on the influence of sustainability in the logistics service industry (Faisal, et al., 2017; Davis-Sramek, 2018; Thomas et al., 2016). However, selecting a logistics provider differs from selecting an SSP due to the associated KIS’ managerial challenges and characteristics. Opposed to logistic services, KIS are characterised for being knowledge-based, have low levels of manual labour and are riskier due to the difficulty of evaluating their quality (Sonmez, and Moorhouse, 2010). Moreover, SSP selection is done within a challenging context of high dependency, uncertainty and lack of uniformity, because of being a decentralised decision (Ellram, 20014; Wang, et al., 2015; Harvey, 2016).

All the aforementioned characteristics and challenges associated with KIS, could make the decision-maker undermine the positive or negative consequences of considering or not the SSP sustainability strategy. These consequences refer to its impact on the focal company’s brand image, reputation or competitiveness which it may affect it in the long-run (Gualandris et al., 2014). This possible long-term consequences conflicts with decision-maker’s shorter-term concerns on tangible outcomes and opportunity costs of prioritising SSP’s sustainability strategy (Kirchoff et al, 2016).

Sustainability has not been found as a decisive factor when considering an SSP. Nevertheless, the decision-maker at individual level and being part of the concerned society, could be influenced by the SSP’s sustainability strategy when making its final choice. This leads to propose the second research question of the paper:

Research question 2: How does the Strategic Service Partner’s sustainability strategy influence the Strategic Service Partner selection?

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16 which are actually considered in strategic partner selection (Fallahpour et al. 2017). Therefore, despite being KIS a human-intensive industry, attribute directly associated to the social dimension of the TBL, it would be worthy to identify which sustainability dimensions influence the decision-maker in SSP selection.

Given the awareness of society of the negative consequences due to unethical decision-making and unsustainable business practices on future generation (Faisal et al., 2017; Wilson, 2015), as well as its increasing influence on individuals’ purchasing decisions (Laroche et al., 2001; Trudel and Cotte, 2009), the three dimensions of the SSP’s sustainability strategy are expected to influence the decision-maker, leading to suggest the following hypotheses:

H.1a The Strategic Service Partner’s financial sustainability strategy influences the Strategic Service Partner selection.

H.1b The Strategic Service Partner’s social sustainability strategy influences the Strategic Service Partner selection.

H.1c The Strategic Service Partner’s environmental sustainability strategy influences the Strategic Service Partner selection.

2.5 Influential factor: Decision maker’s Agreeableness

All decision-making activities done in an organization are influenced in some extent by the decision-maker’s behaviour and its individual aspects (Schorsch, et al.,2017; Croson et al., 2013; Tokar, 2010). Behaviour largely depends on the individual’s personality which includes different facets such as what people think, want, feel or desire and is defined by the individual’s personal background (Farizo et al., 2016). According to McCrae and Costa (2003), personality and its facets, provide more individual and specific psychological information resulting in a much more good predictor for patterns of decision behaviour rather than other individual factors like age or income. Therefore, an individual’s personality is expected to influence decision-making processes.

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17 straightforward, altruist, courteous and cooperative (Goldberg, 1999). All these facets are found in individuals with high levels of Agreeableness. Individuals with lower levels of Agreeableness, are associated with being antagonistic, suspicious, selfish, cold and egoistical (Periatt et al., 2007).

Several studies have considered Agreeableness and its effects on the individuals’ behaviour and decision-making. Hirsh (2010, 2014) found that highly agreeable individuals show a sense of higher concern for other people’s well-being and are found to be more supportive with pro-environmental attitudes and decisions. Graziano and Eisenberg (1997) argued that variability in Agreeableness might result in differences in the propensity to behave prosocial, empathetic and altruistic. All these traits are found to result in individuals who care about society and have a high sense of responsibility towards it (Penner et al. 2005).

Having found in literature a relationship between the individual’s Agreeableness level and pro-environmental and pro-social attitudes and behaviour, arises the question if this personality dimension would be a significant influential factor in the decision-making context of SSP selection, where sustainability has not been traditionally considered. It is therefore proposed the following sub-question:

Sub-question 1: To what extent Agreeableness influences considering Strategic Service Partner’s sustainability strategy in the Strategic Service Partner selection context?

Agreeableness, a personality dimension that a decision-maker can be at different levels, is correlated with being unselfish, compassionate, altruist and thoughtful (Goldberg 1990, DeYoung, 2007). Moreover, high levels of Agreeableness, has been found in individual’s with higher propensity to engage with prosocial attitudes and have a higher environmental concern (Farizo et al., 2016; Hirsh 2014, 2010). Being the environmental a dimension which jointly to the financial and social, holistically forms the SSP sustainability strategy, it is hypothesised that decision-makers’ Agreeableness level will influence the SSP selection by making the decision-maker consider the SSP’s sustainability strategy.

H.2a In Strategic Service Partner selection context, Agreeableness influences considering Strategic Service Partner’s financial sustainability strategy.

H.2b In Strategic Service Partner selection context, Agreeableness influences considering Strategic Service Partner’s social sustainability strategy.

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2.6 Influential factor: Focal Company’s sustainability culture

Organisations are also aware of the increasing society’s concern with sustainability and its effect conditioning their purchasing decisions (Wilson, 2015). Due to this, some companies are engaging on following a sustainable development and fostering it within their cultures (Galpin et al., 2015). According to Schein (1985), the organisational culture refers to the beliefs, values, behaviour rules, norms and practices that members of the organizations share. The focal company’s sustainability culture involves more than just complying with the legal regulations. It also comprises fulfilling the expectations that the employees have relative to what they consider it is following sustainable business practices (Maignan et al., 2002).

There are different signals that can indicate to employees what their company’s position towards sustainability is and consequently, contribute to build up its sustainability culture. At the strategic level, (1) mission statements are powerful tools used to define the company’s strategic goals and directions (Galpin et al., 2015). Other elements indicating the focal company’s position at operational level are, (2) top management behaviour (Treviño et al., 1998; Kaptein, 2008) and (3) reinforcement programs such as sustainable operational practices, sustainable voluntary initiatives or training programs (Gualandris et al, 2014; Galpin et al, 2015; Azapagic and Perdan, 2000). All these elements, from now on sustainable culture elements (SCE), could show to decision-makers how relevant sustainability is within their organisational culture.

Given the importance of the decision of SSP selection for the focal company as well as the role of sustainability within society, it is necessary to study how sustainable culture is influencing decision-makers in making them consider the SSP sustainability strategy in the decision context of SSP selection. This line of research was already proposed by Ferrell et. al. (2013), who stressed the need to investigate the role of SCE and its influence in decision-making in different industries, suggesting that it is likely that sustainability cultures and approaches on sustainability and ethical decision-making will highly vary according to it. This reasoning leads to propose the second sub-question of this paper:

Sub-question 2: To what extent the focal company’s sustainability culture influence considering Strategic Service Partner’s sustainability strategy in the Strategic Service Partner selection context?

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19 element conforming its company’s culture, it could influence him in their selection tasks by making him consider the SSP sustainability strategy. This reasoning leads to propose the following hypotheses for the suggested SCE.

At the strategic level, mission statements are used to define the company’s strategic goals and directions (Galpin et al., 2015). Hence, mission statements identifying sustainability practices within their strategic goals, could show decision-makers their company’s position towards sustainability and how important this concept is within its values. Hence, mission statements including sustainability goals are expected to influence the decision-maker in considering the SSP sustainability strategy.

H.3a In Strategic Service Partner selection context, mission statements influence considering Strategic Service Partner’s financial sustainability strategy.

H.3b In Strategic Service Partner selection context, mission statements influence considering Strategic Service Partner’s social sustainability strategy.

H.3c In Strategic Service Partner selection context, mission statements influence considering Strategic Service Partner’s environmental sustainability strategy. Top management behaviour influences lower level employee’s behaviour (Kaptein, 2008) and strengthens the company’s culture (Treviño et al., 1998). Thus, organizations whose managers and supervisors follow sustainable and ethical practices could show its awareness on sustainability, influencing individual’s decision behaviour (Svenson et al., 2009). Following this reason, it is hypothesised that having the perception that the top management acts considering ethical practices and sustainability as important, will likely impact the decision-maker by considering the SSP’s sustainability strategy.

H.4a In Strategic Service Partner selection context, top management behaviour influences considering Strategic Service Partner’s financial sustainability strategy.

H.4b In Strategic Service Partner selection context, top management behaviour influences considering Strategic Service Partner’s social sustainability strategy. H.4c In Strategic Service Partner selection context, top management behaviour influences considering Strategic Service Partner’s environmental sustainability strategy.

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20 could be focal companies whose workplace facilities minimise the use of natural resources such as water or energy consumption; or whose operational processes avoid waste (i.e. use of technological platforms instead of paper or reduction of packaging). With respect to initiatives, they could comprise voluntary initiatives assisting either the social community or natural environment where the company operates. Lastly, for training programs, the promotion of the employees’ education on how to introduce sustainability in their daily job-tasks, has been proofed to be an effective way to show that the company operates focusing on the long-term rather than short term, contributing to the company’s sustainable development (Wilson, 2015; Stata, 1989). Hence, reinforcement programs supporting sustainability practices are expected to strengthen the focal company’s sustainability culture leading to propose the following hypotheses.

H.5a In Strategic Service Partner selection context, sustainable operational practices influence considering Strategic Service Partner’s financial sustainability strategy.

H.5b In Strategic Service Partner selection context, sustainable operational practices influence considering Strategic Service Partner’s social sustainability strategy.

H.5c In Strategic Service Partner selection context, sustainable operational practices influence considering Strategic Service Partner’s environmental sustainability strategy.

H.6a In Strategic Service Partner selection context, sustainable initiatives influence considering Strategic Service Partner’s financial sustainability strategy. H.6b In Strategic Service Partner selection context, sustainable initiatives influence considering Strategic Service Partner’s social sustainability strategy. H.6c In Strategic Service Partner selection context, sustainable initiatives influence considering Strategic Service Partner’s environmental sustainability strategy.

H7a In Strategic Service Partner selection context, training programs influence considering Strategic Service Partner’s financial sustainability strategy.

H7b In Strategic Service Partner selection context, training programs influence considering Strategic Service Partner’s social sustainability strategy.

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3. Methodology

3.1. Research Design

3.1.1 Choice of research method

The purpose of this paper is to identify how the decision of selecting an SSP providing a

KIS is made. To conduct the research, two research questions are formulated. The first one, aims to identify what are the key criteria used by focal companies to select an SSP. The second one, which includes two sub-questions, aims to identify organisational and individual factors that influence the decision-maker when facing the SSP selection. To study the linkages between SSP selection and the influential factors, a list of hypotheses are suggested in previous section 2.

This paper attempts to deepen the knowledge in an already researched area such as strategic partner selection within the understudied sector of KIS. Hence, it is considered that the most suitable methodology to collect the data for this research would be an electronic explanatory survey. This method enables to generalise the findings and generate new theory comprising a context whose importance for the current economy is growing (Rossi, 1983).

It is acknowledged that every research method has its limitations and surveys are not an exception (Karlsson, 2016). The electronic survey will be using close and specific questions preventing them to have direct contact with the researcher in case further clarifications are needed. Consequently, the quality of the data collected face the risk of relying on the level of understanding of the respondents on the questionnaire itself. Recognising the drawbacks of the chosen research method, the survey has been designed with the objective to minimise its negative attributes.

3.1.2 Survey Design

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3.2 Data collection

3.2.1 Sampling and survey distribution

The target sample for this research needed to fulfil a single requirement which was having had experience facing the decision of selecting an SSP. This is an essential and challenging constraint for the study, as this decision is not only made by employees in the procurement/purchasing department of focal companies. As already found in the literature review, SSP are sometimes selected by employees within the departments that are strategically outsourcing the KIS (Ellram et al. 2004). Therefore, generally this task is decentralised. In order to ensure that the respondents answering the survey were aligned with the sample requirement, a thorough definition on what is a KIS was included in the questionnaire jointly with examples of service industries that comprise them. This explanation can be found at the beginning of part 2 of the survey.

Due to time and financial constraints, a non-probabilistic sampling method was followed by proactively approaching professionals who within their job tasks have selected an SSP (Karlsson, 2016). In addition, different channels were used to approach the participants: the use of personal and professional networks and the social media platforms.

For developing and distributing the electronic survey to the respondents as well as collecting the data, the survey service provider QUALTRICS license was utilised. This license allows the creation of a hyperlink which conveniently eases the survey distribution.

3.2.2 Preliminary checks

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23 attention. The same check was done for low aggregable individuals. All questionnaires from inattentive respondents were removed as well as those who had some answers missing.

3.3 Preliminary data analysis

The statistical software of SPSS was used to do the data analysis of this research, including hypothesis testing and the preliminary analysis to test the quality of the data collected.

3.3.1 Assessment bias

3.3.1.1 Non-response bias

One of the main concerns when performing a survey-based research is that the sample size can threaten the quality of the data, limiting the generalisability of the results (Cannon and Perrault, 1999). For this reason, following the Armstrong and Overton (1977), it was assessed the non-response bias by comparing the samples that answered the survey early and late. A Chi-square test was used to compare the means of nominal variables in terms of gender, age, educational background and company size (number of employees) to see if the respondents of the sample were equally distributed (table 3.1). Being all the p-values values higher than 0.01, it was concluded that there was no statistically significant difference among the sample distribution of early and late respondents. In addition, for comparing the answers of numerical variables, a Lavene’s test was used to compare the variances of the answers from late and early respondents. All of them, had a p-value higher than 0.01 showing that there was no statistically significant difference. Lavene’s and Chi square tests can be found in Appendix C.

Table 3.1 - Non-response bias nominal variables

Respondents’ characteristics Chi-Square df p-value > 0.01

Gender 1.89 2 0.389

Age 10.656 8 0.222

Educational Background 6.709 6 0.349

Company size 4.913 6 0.555

3.2.1.2 Key informant bias

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24 when answering the survey and how knowledgeable they believed they were about SSP selection. The responses of the participants after removing those that did not pass the preliminary check, had a mean of 4.53 and 4.59, being uniformly high. The results indicated that they felt confident answering the survey and could provide accurate information. Nevertheless, 2 respondents had an average lower than 3 in the key informant questions and so, they were removed from the sample being considered unqualified respondents.

3.3.2 Descriptive statistics

After removing the questionnaires which did not comply with the preliminary check and the bias assessment, the number of responses used to conduct the analysis was reduced from the original 111 questionnaires to 79. Table 3.2 summarises the characteristics of the sample. It is needed to be noted that most of the professionals answering the survey had less than 5 years of experience (53%) or between 5-10 years (28%). This fact could be related to using social media to distribute the survey as this one is less used by older people which have a higher professional experience. In addition, it can be observed that the SSP selection is mostly done by middle managers and by individuals holding a bachelor’s degree, representing more than 50% of the sample.

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25 Table 3.2 - Descriptive statistics of the sample

3.3.3 Validity and reliability

3.3.3.1 Content validity

In order to ensure the content validity of the survey, all constructs and items were based on literature and double-checked with a knowledgeable researcher. Needs to be noted that the length of the survey had to be reduced to avoid affecting the response rate (Karlsson, 2016). This resulted in measuring some items with a unique construct.

Characteristics N % Company position Board Member 3 4% Upper management 8 10% Middle Management 42 53% Junior Management 16 20% Consultant 10 13%

Years of professional experience

Less than 5 years 42 53%

5-10 years 22 28% 10-20 years 7 9% 20-30 years 5 6% Above 30 years 3 4% Educational Background Bachelor’s degree 40 51% Master’s degree 30 38% Degree 5 6% No degree 4 5%

Department within the company

IT 17 22%

Operations 15 19%

Finance and Accounting 11 14%

Purchasing/Procurement 8 10% Customer service 7 9% Sales 6 8% Production 5 6% Administration 3 4% Legal 2 3% Marketing 1 1% Other 4 5%

Company size (number of employees)

0 - 49 employees 14 18%

50 - 500 employees 32 41%

501- 2500 employees 13 16%

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26 In the first section of part 2 of the questionnaire, criteria items were listed to answer the first research question. Price, Recommendation, Customisation, Experience and Knowledge of the industry were adapted from Sonmez and Moorhouse (2010), delivery from Donaldson (1994), Responsiveness from Loetveit-Pedersen and Gray (1998) and Knowledge and Data sharing from Feng (2012). Each criterion was globally assessed by a single construct.

In the second section of part 2, constructs measuring the sustainability culture of the focal company were listed. Several elements can signal to employees how is viewed and considered sustainability within their companies’ culture such as: top-management behaviour, mission statements or reinforcement programs. 2-items were used to measure top-management sustainable behaviour, adapted from Goebel et al. (2012); for mission statement and reinforcement programs including sustainable operational practices, voluntary initiatives and trainings were adapted from Galpin et al. (2015). In part 3, the three dimensions of the SSP sustainability strategy were measured. 3-item scale were adapted from Goebel et al. (2012) for measuring the social and environmental sustainability. For the financial sustainability, the 3-item scale was adapted from Davis-Sramek (2018). Finally, part 4 measures the personality dimension of Agreeableness, whose items were adapted from DeYoung et al. (2007) and Periatt et al. (2007).

For all measurements, a 5-point Likert scale was used to rate the criteria being 1= “Not at all important” and 5= “Extremely important”. For all the other parts, the Likert scale measured the level of agreement of the respondents towards the statements.

3.3.3.2 Convergent validity and reliability

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27 test, the Bartlett’s test of sphericity as well as the factor analysis matrix and reliability tests are detailed.

Table 3.3 - Convergent validity and Reliability

Construct Mean SD FA Cronbach α Composite

reliability AVE Agreeableness 0.839 0.774 0.463 Agree.1 4.38 0.66 0.773 Agree.2 4.23 0.75 0.657 Agree.3 4.43 0.634 0.652 Agree.4 4.28 0.8 0.632 Financial Sustainability 0.877 0.920 0.794 Fin.Sust1 3.8 0.939 0.867 Fin.Sust2 3.67 1.071 0.923 Fin.Sust3 3.89 0.862 0.882 Top Management 0.727 0.868 0.767 Top mngt1 3.78 0.97 0.88 Top mngt2 3.76 0.923 0.872 Environmental Sustainability 0.926 0.926 0.807 Environ.Sust1 4.18 0.93 0.913 Environ.Sust2 3.97 0.96 0.864 Environ.Sust3 4 1 0.917 Social Sustainability 0.743 0.838 0.634 Socialsust1 4.71 0.484 0.844 Socialsust2 4.54 0.765 0.836 Socialsust3 4.73 0.524 0.7 3.3.3.3 Discriminant validity

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28 Table 3.4 - Component Spearman Correlation Matrix and AVE

Construct

number Construct name 1 2 3 4 5

1 Agreeableness 0.681 2 Financial sustainability 0.373 0.891 3 Top Management 0.216 0.057 0.876 4 Environment sustainability 0.494 0.317 0.152 0.898 5 Social sustainability 0.380 0.044 0.126 0.443 0.796

3.4 Ethical considerations

According to Steneck (2006), “research ethics is viewed as the research behaviour measured in terms of and guided by principals of moral”. All good research should not only aim to attain high quality data but also to ensure that it has been developed complying with ethical considerations. To fulfil with the ethics duty that all study should follow, it was used a cover letter communicating to the respondents the ethical approach that was going to be adopted throughout the data collection and analysis. The cover letter was provided at the beginning of the survey and a copy of it can be found in Appendix A.

The letter explained what this research consisted of and why their participation was needed so that it was assured that the respondents understood the nature of the study and what was expected from them (Gilman, 2008). Nevertheless, contact details were also provided in case further clarifications were needed.

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4. Results and findings

4.1 Analysis of the criteria to select a Strategic Service Partner

In part 2 of the questionnaire, it was requested to rate the relative importance of the different criteria when assessing an SSP according to their organisations’ standards. To assess their relevance, the means and standard deviations were analysed. Table 4.1 shows the ranking from the most to the least important, being ‘Delivery’ criteria (reliability on delivering the KIS on the agreed time) the most relevant and the ‘Lowest Price´ the least. Except for price, all criteria were rated above 3 leading to suggest that all of them are highly considered by focal companies when selecting an SSP. Moreover, there is a low dispersion of the means emphasising the robustness of the results.

Table 4.1 - Ranking of the criteria for the SSP selection

Criteria for SSP selection Mean Std. Deviation

Delivery 4.3 0.585

Good knowledge on the industry 4.2 0.774

Customisation 4.1 0.794

Responsive 3.97 0.698

Experience with similar projects 3.82 0.997

Knowledge sharing 3.78 0.929

Recommendation 3.46 0.945

Data sharing 3.41 1.044

Lowest price 2.91 0.804

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30 lower access to financial resources and may rate relatively more important the ‘Lowest Price’ criteria. Additionally, it was proceeded to conduct an ANOVA analysis to compare if answers from different company sizes had a statistically significant difference towards ` Lowest Price´ assessment. With a p-value higher than 0.05 (0.948) and the comparison of rankings (Appendix F), it is suggested that company size has no effect on rating the importance of price criteria and so, it is verified that `Lowest Price´ is the relatively least considered when selecting an SSP.

4.2 Analysis of the influential factors

For testing the hypotheses proposed to study the influential factors at individual and organisational level, it was needed to compare the means among the independent and dependent variables. Throughout the research, a Kruskal-Wallis H test, which is the non-parametric version of the ANOVA, was utilised. This non-non-parametric test was chosen because dependent variables: SSP’s environmental, social and financial sustainability were non-normal distributed. Normality tests can be found in Appendix G.

4.2.1 Hypothesis 1: Strategic Service Partner’s sustainability strategy

Hypotheses H1a, H1b and H1c aimed to identify if decision-makers were influenced by the SSP’s sustainability strategy when selecting an SSP. In order to analyse its influence, the means and standard deviations of the sustainability variables were computed for each construct (table 4.2). Being all means greater than 3 with low levels of dispersion ranging from 0.491- 0.9, it can be concluded that the three sustainability dimensions of the SSP influence the decision-maker. These results lead to accept hypotheses H1a, H1b and H1c. It is needed to be noted that according to the results, social sustainability is the one influencing the most with the highest mean and the lowest standard deviation.

Table 4.2 - Descriptive statistics for the influence of SSP’s sustainability strategy

Construct Mean Std. Deviation N

Social Sustainability 4.66 0.491 79

Environmental Sustainability 4.05 0.900 79

Financial Sustainability 3.78 0.861 79

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31 acceptance of the hypotheses, leading to state that regardless the decision-maker’s years of experience, SSP sustainability strategy is an influential factor.

Table 4.3 - Kruskal-Wallis H test: SSP’s sustainability strategy and professional years of experience Financial Sustainability Environmental Sustainability Social Sustainability K statistic 1.553 9.460 5.308 df 4 4 4 Significance (P-value< 0.05) .817 .051 .257

4.2.2 Hypothesis 2: Decision-maker’s Agreeableness

Hypotheses 2a, 2b, 2c aimed to identify if the level of Agreeableness of the decision-maker influences the SSP selection by making him consider more important the SSP’s sustainability. To test these hypotheses, a nominal variable was created to classify the individuals who scored low, medium or high in constructs measuring its agreeableness level. Since answers on Agreeableness were skewed towards high levels (Appendix I), in order to capture its effects, it was decided to create the subgroups with the following criteria: those whose average were lower than 3.5, had low level of Agreeableness; those who scored between 3.6 and 4.5 were medium and above 4.5 were considered high. Firstly, a spearman correlation matrix was built, confirming statistically significant positive relationship between Agreeableness and the SSP’s sustainability strategy (the three dimensions) at 0.01 level (Appendix I). Afterwards, by conducting the Kruskal-Wallis H test, it was found a statistically significant difference among the mean answers of the three sustainability dimensions with p-values lower than 0.05. These results, summarised in Table 4.4, lead to accept hypotheses 2a, 2b and 2c.

Table 4.4 - Kruskal-Wallis H test: SSP’s sustainability strategy and Agreeableness level

Financial Sustainability Environmental Sustainability Social Sustainability K statistic 15966 11750 7652 df 2 2 2 Significance (p < 0.05) .000* .003* .022*

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32 considered themselves highly agreeable ended up assessing higher the importance of the SSP’s sustainability strategy in the SSP selection context.

4.2.2 Hypotheses 3, 4, 5, 6 and 7: Focal company’s sustainability culture

For testing the influence of sustainability culture has on the decision-maker when considering the SSP’s sustainability context, firstly, new variables were created for each SCE (independent variables). To create the subgroups, it was considered those who scored 1-2 perceived a low level of the SCE within their company culture; those who scored 3 where labelled as medium level and 4-5 as high level.

Firstly, a spearman correlation matrix was created to identify the potential relationships between the different SCE and the different SSP’s sustainability dimensions. Secondly, it was proceeded with the Kruskal-Wallis H test regardless if a correlation was or not present in order to fully verify the potential influence on the decision-maker when selecting an SSP. Table 4.5, shows the test results and an extended analysis can be found in Appendix J.

Table 4.5 - Kruskal-Wallis H test: SSP’s sustainability strategy and SCE Financial Sustainability Social Sustainability Environmental Sustainability SCE K statistic df Signif. (p < 0.05) K statistic df Signif. (p < 0.05) K statistic df Signif. (p < 0.05) M.S. 1.27 2 .002* 2.217 2 .330 7.74 2 .021* T.M.B. .827 2 .661 4.387 2 .112 3.03 2 .220 O.P. 8.10 2 .017* 5.589 2 .061 14.99 2 .001* V.I. .937 2 .626 4.133 2 .127 3.85 2 .146 T. .608 2 .738 3.309 2 .191 3.52 2 .172

Note: M.S.= Mission Statement; T.M.B.= Top Management Behaviour; O.P.=Operational Practices; V.I.= Voluntary Initiatives; T.=Trainings

* = Statistically significant at 0.05 level

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33 social dimension there was no statistical significance but for the financial and environmental there was, as their p-values were lower than 0.05. These results suggest that hypotheses: H3a, H3c and H5a and H5c are accepted.

For all other variables, except for the relationship between training and environmental sustainability strategy with a significant 0.286 correlation coefficient, no correlation was found. Consequently, all Kruskal-Wallis H test had a p-value higher than 0.05, leading to reject all the remaining hypotheses (H4, H6 and H7). The below table 4.6 summarises the outcomes of all the hypotheses suggested.

Table 4.6 – Summary of the hypotheses’ outcomes

SSP's Sustainability Strategy Hypothesis number Financial (a) Social (b) Environmental (c) H1 SSP's Sustainability Strategy Accepted Accepted Accepted

H2 Agreeableness Accepted Accepted Accepted

Sustainable culture elements

H3 Mission statement Accepted Rejected Accepted H4 Top management behaviour Rejected Rejected Rejected H5 Operational practices Accepted Rejected Accepted H6 Voluntary Initiatives Rejected Rejected Rejected

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5. Discussion

As a whole, this paper aims to contribute to the research of the understudied fields of SSP selection. More concretely, it is going to focus on understanding how the SSP selection is made, offering a critical insight into the KIS sector, which currently represents a substantial part of the economy. With the results obtained by the means of the survey, the implications in both the theoretical and managerial framework are going to be discussed. In the last part, the limitations and directions for future research are going to be disclosed.

5.1. Theoretical implications

5.1.1 The Strategic Service Partner’s selection criteria

In order to answer the first research question proposed, respondents were asked to rate the relative importance of different criteria concerning the selection of an SSP delivering a KIS. Results show that the suggested criteria grounded in literature, are being considered key by focal companies with the exception of `Lowest Price´. `Lowest Price´ has been the only one which has a mean rate lower than 3 and thus, it has been labelled as `Slightly important´. A post hoc analysis, studying the importance of `Lowest Price´ according to company size, was conducted assuming that smaller companies may struggle more in having access to financial resources. The tests and rankings (Appendix F), showed that in all type of companies regardless its number of employees, `Lowest Price´ was still the least relatively important leading to the conclusion that `Lowest Price´ is not a decisive criterion.

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35 also affect the company’s capacity (Ellram et al., 2004; Wang et al., 2015). This fact emphasises the extremely dependence present between SSPs and focal companies, leading to the need to incentivise a fluent communication and collaborative relationship in order to ensure the agreed delivery. Consequently, `Delivery´ is indirectly linked to another attribute of services previously highlighted and included in this study: the collaborative utility level proposed by Feng et al. (2011,2012). This criterion was assessed with the SSP’s willingness to share `Knowledge´ and `Data´ because of the nature of the service in scope of the research. Both measurements were also found to be highly considered by focal companies having been rated on average 3.78 and 3.41. Having access to specialised value-added capabilities, is one of the main reasons why focal companies decide to strategically outsource KIS (Holcomb and Hitt, 2007). Therefore, after `Delivery´, in the ranking coherently follows the criteria of `Good knowledge on the industry´ and `Customisation´. In essence, these two criteria are describing the importance of having access to customised and specific knowledge. Knowledge embodied in the human capital of SSP delivering the KIS, is characterised for being abstract, variable and unique (Harvey, 2016; Sonmez and Moorhouse, 2010). Therefore, the successfulness of SSP for being selected will heavily rely on the SSP’s ability to develop and transform the knowledge of its high qualified worker’s into value creation for focal companies (Løwendahl et al. 2001).

5.1.2 The influence of Strategic Service partner’s sustainability strategy

The first hypotheses (1a,1b,1c) were proposed to answer the second research question, which aimed to identify whether SSP’s sustainability strategy influences the SSP selection. With the descriptive statistics showing a mean for all three dimensions rated above 3, consistent with the suggested predictions, it leads to the acceptation of the three hypotheses. Additionally, among the three dimensions, the social sustainability was the one rated the highest with an average of 4.66 followed by the environmental (4.05) and the financial (3.79). Being KIS distinguished for high human involvement and low tangibility levels, it leads to the suggestion that decision-makers when considering the SSP’s sustainability, would firstly associate the SSP’s sustainability with the social dimension as this one is related to employee’s welfare and its impact on the social community where the SSP’s company operates.

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36 context, these aspects could be more easily justified with an SSP who has a strong financial sustainability as they could make use of tangible financial statements. Therefore, in the ratings it would have been expected a higher inclination from decision-makers towards the SSP’s financial sustainability. Surprisingly, the social and environmental dimension were on average rated higher than the financial. A reason for these findings could be a predominance assumption of the decision-makers supporting a causal relationship among the sustainability dimensions. This line of reasoning is consistent with most of the studies in sustainable supply chain management (Davis‐ Sramek et al., 2018). This view claims that the social and environmental dimension are related to a good financial performance, hence SSP’s signalling strong social and environmental sustainability strategies, are indirectly contributing to their financial sustainability endurance and therefore already implying to decision-makers a good financial performance.

A post hoc analysis was done in order to study the actual influence of sustainability more-in-depth. Being sustainability a concept whose awareness has sprung up throughout the last decades and being a high percentage (53%) of the sample with less than 5 years of experience in selecting SSP, results could have been influenced due to the professional youthfulness of the sample. Despite this concern, the Kruskal-Wallis H test showed no significant difference in the scores given to the sustainability dimensions. These findings contribute to the robustness of considering SSP’s sustainability and the TBL as an influential factor in the selection of SSP. In addition, it also supports Ferrell et al. (2013) research, which states that “organisations are starting to shift their financial focus prioritising efficiency and effectiveness towards stakeholder orientation”. The stakeholder orientation is the one emphasising the organisational learning and growth while considering different stakeholder groups, the co-creation of value and sustainability in supply chain management (Ferrell et al. 2010). Thus, the stakeholder orientation is also being reflected in the SSP selection context, with decision-makers highly considering SSP’s sustainability strategy and its effects on the different parties involved in the transaction of delivering a KIS.

5.1.2.1 The influence of Agreeableness in considering the Strategic Service Partner’s sustainability strategy

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37 dimensions of the SSP. Therefore, and having a positive spearman correlation coefficient, it could be concluded that decision-makers who consider themselves highly agreeable, would be greater influenced by the SSP’s sustainability strategy in their final selection.

At sustainability dimension level, with respect to the environmental sustainability, and in line with previous research (Hirsh 2010, 2014), it was found that the higher the decision-maker’s Agreeableness level, the greater his environmental concern and in turn, this is was also reflected in the SSP selection context. These findings contribute to the robustness of the relationship between this personality dimension and the propensity to engage in pro-environmental attitudes. Nonetheless, this study has provided a deeper insight into the influence of Agreeableness in sustainable decision-making. The findings indicate that this personality dimension is also a significant predictor in considering the SSP’s social and financial dimension. Supporting Graziano and Eisenberg (1997) and Penner et al. (2005), these relationships could lead to the suggestion that highly agreeable individuals are concerned not only in the welfare and health of future generations but also have the propensity to consider more the long-term consequences of a decision. Highly assessing the SSP’s financial sustainability means that they care about the sustainable competitiveness of the SSP due to the direct impact that it could have on the focal company’s endurance. Furthermore, having found a relationship between Agreeableness and the three dimensions of the TBL, leads to propose that highly agreeable decision-makers could have a greater tendency to take decisions envisioning long-term rather than short term profits.

5.1.2.2 The influence of Sustainability Culture Elements in considering the Strategic Service Partner’s sustainability strategy

Overall, the findings from this study must be considered within the unique development of KIS sector and SSP selection as well as the cultural context in which this research was conducted. After doing the Kruskal-Wallis H test to study the influence of different SCEs in the consideration of the SSP sustainability strategy, it was found that mission statements and the sustainable operational practices are a statistically significant predictor of making decision-makers consider the SSP’s sustainability strategy.

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38 company’s sustainability values to their employees. Furthermore, they are powerful enough to influence in a decision-making context where consequences of considering SSP’s sustainability strategy could be realised in the long-term.

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39 predominant (Liu et al 2017, Wilson, 2015). This predominance is being reflected within individual or personal values and beliefs that are affecting the decision-makers´ final selection regardless the focal company’s sustainability culture.

5.2 Managerial implications

The results from the survey lead to some practical implications which should carefully be considered by managers from both, focal companies selecting an SSP and corporations delivering a KIS.

At the organisational level, `Delivery´, `Good knowledge on the industry´ and `Customisation´ were the criteria rated most relevant by focal companies. From the SSP perspective, it would be suggested that they consider improving their performance in excelling in one of these criteria. According to Porter (1985), a company can attain a sustainable competitive advantage through two ways, cost leadership or differentiation. Having found that focal companies selecting SSP rate as least important the `Lowest Price´ criterion, SSP should disregard focusing in cutting costs to offer a lower price and rather focus on differentiating themselves in one of the highest rated criteria. Moreover, the SSP should identify effective instruments to measure and proof to customers their high reliability delivery rates, their proficiency and expertise in the particular industry or their ability to adapt to customer needs, in order to be able to leverage from using a differentiation strategy. From the focal company’s perspective, these results shed light on how companies are generally selecting SSPs and those organisations that have decided to strategically outsource part of its internal operations can use them as a guidance. Besides, given the importance found on the attribute of collaboration utility level, impacting the overall service supply chain performance and indirectly being related to the most rated criteria of `Delivery´, it would be advisable for focal companies to select those SSPs having a higher predisposition to be in a highly collaborative relationship. With respect to the SSPs, it would be wise to show their high willingness to collaborate as by this way, they will also be exhibiting their efforts to achieve the delivery agreements.

Identifying Influential Factors in Strategic Service Partner Selection