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Buying Under the Influence



ISM's 87th Annual International Supply Management Conference

San Francisco, CA
May 2002

Author(s):

Roberta J. Duffy

Laura M. Birou, Ph.D., C.P.M.
St. John's University
Barbara E. Taylor, C.P.M.
Texas Instruments

Anytime Laura Birou and Barbara Taylor present at an ISM Conference, it's sure to be a packed house, and this time was no exception. In what has become a tradition, these two supply management professionals spent their Tuesday session exploring some interesting psychological and sociological trends and assessing how they impact supply management and the general business environment.

"Buying Under the Influence" refers to the fact that everyday most people experience 1500 influence attempts, be it commercials, media, personal interactions, or other sources of information. Author Robert B. Cialdini has written on the topic of influence, and Birou and Taylor have studied it in recent years and discovered specific ways that supply management professionals might be influenced (or how they can influence) based on these principles.

To add some extra interest to their presentation, and to drive the points home, Birou and Taylor used movie clips that illustrated the main concepts.

For example, one influence that is common is Reciprocation. This occurs when someone feels influenced by social pressure to repay, in kind, what another person has provided. You might feel obligated to purchase a holiday gift for someone if they did so for you last year. Supply managers might easily recognize the potential influence of reciprocation when suppliers send gifts or treat potential customers to meals and entertainment. As with many influences, the key is to recognize them so that judgements can be made with the knowledge that these influences are present.

Another influence is that of Social Proof. Social proof is present when we determine what is correct by finding out what other people think is correct. To illustrate this point, attendees saw a clip from the movie "Boiler Room." A young stockbroker is trying to convince a wealthy doctor to invest his money in a particular stock. He alludes to the many other investors who have already "made the smart decision." Social proof can be seen in the business world when sales people provide customer testimonials to potential clients. However, social proof is also often actively sought out. If a supply manager networks with peers and gets feedback based on their experiences, this information might be used to make educated decisions.

Other influences include:

  • Consistency
  • Liking
  • Authority
  • Scarcity

Learning more about the influences that exist can help individuals have the truest picture of their environment.

By Roberta J. Duffy, editor of Inside Supply Management

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