Risks in Globalization

Accenture conducted a survey of U.S. companies that operated globally to identify the top risk factors in global business operations (Mulani, 2005). The companies included IT and manufacturing industries (small and big). The top seven risk factors from the study were as follows  

It was interesting to note that time zone, language barrier, and cultural differences were cited as the top three risk factors, while distance was a distant fifth It should be noted that some multinational companies use time zone difference to their advantage. 

In the global economy, most manufacturers are continuously seeking their supplier base around the world and looking for opportunities to significantly reduce supply chain costs. Singular emphasis on supply chain cost, however, can make the supply chain brittle and more susceptible to the risk of disruptions. In Section 8.4, we will discuss the risks and hidden costs in global somcing. 

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P. R. Kleindorfer and L. N. Van Wassenhove, 2004, Managing Risk in Global Supply Chains, In H. Gatigon and J. Kimberly (eds.). The Allianee on Globalization, Cambridge University Press, Chapter 12. 

Kim Y, Chen Yi-Su, Linderman K (2015) Supply network disruption and resilience a network structural perspective. J Oper Manag 33-34 43-59 Kungwalsong K (2013) Managing dismption risks in global supply chains. Unpublished PhD dissertation, Pennsylvania State University... 

The best possible reference for a tolerable risk is the state of the art in well-tried product standards as ISO 16090 (before EN 12417). An increase of the requirements in the standard needs to be justified plausibly, and an appropriate consideration of the economic risk in Global competition is indispensable, not only in (small and medium) enterprises, but also from the Health and Safety experts. 

Disruption risk factors and their attributes. (From Kungwalsong K. Managing Disruption Risks in Global Supply Chains. Unpublished PhD dissertation, Pennsylvania State University, 2013.)... 

Identify six potential sources and causes of risk in global supply chains. Use the reference to Peck (2003) below to propose counter measures. 

Explain different strategies that may be used to mitigate risk in global supply chains. 

The Accenture survey categorized risk in global supply chains, as shown in Table 6-1, and asked respondents to indicate the factors that affected them. More than a third of the respondents were affected by natural disasters, volatility of fuel prices, and the performance of supply chain partners. 

Rowbottom, U. (2004) Managing risk in global supply chains . Supply Chain Practice, Vol. 6,No. 2,pp. 16-23. 

Kleindorfer, P.R. and Wassenhove, L.K. (2003), Managing Risk in Global Supply Chains , Paper presented to Wharton Insurance and Risk Management Department Seminar, 27tii February 2003, Wharton University. 

Lehner B, Doll P, Alcamo J et al (2006) Estimating the impact of global change on flood and drought risks in Europe a continental, integrated analysis. Clim Change 75 273-299... 

A first kind of these insurance products are called "catastrophe bonds" and consist in securitizing environmental risks in bonds, which could be sold to high-yield investors. The catastrophe bonds are able to transfer risk to investors that receive coupons that are normally a reference rate plus an appropriate risk premium. By these products, insurance companies limit risk exposure transferring natural catastrophe risk into the capital markets. In this way, with the involvement of the financial markets, their global size offers enormous potential for insurers to diversify risks. 

Children of opiate addicts have been shown to have poorer social, educational and health status and to be at higher risk of abuse than their peers (Keen et al., 2000). However, given the high rates of psychiatric comorbidity (in particular, depression) in opiate-dependent patients (Brooner et al., 1997 Khantzian and Treece, 1985), it may be that some of the increased risk in children stems from this greater parental depression. Nunes et al. (1998) reported higher incidence of conduct disorder and global and social impairment for children of addicts with major depression compared to addicts without depression and controls, but not compared with children of depressed patients without substance use disorders. 

The consensus of scientists with expertise in climate and weather issues appears to he that global warming is of sufficient concern to demand some form of political action. They argue that it is more prudent to act now to reduce emissions of carbon dioxide and other greenhouse gases and reduce the risk of global warming than to... 

Economics and politics also intersected in Whitehall s perception in 1956 of the Soviet Union as a threat to Britain s share of international trade. In May of that year, when arguing that Britain could not afford a policy of perfection in defence, Eden noted that there was evidence that the Russians intended to concentrate on industrial exports. In order to be able to meet this competition, part of the burden placed on British industry by defence orders must be reduced, so as to release resources for civil production. In present circumstances, he said, economic failure was a more serious risk than global war, and defence plans had to be adjusted to this revised political assessment. He added that a recent report from the ambassador in Washington showed that President Eisenhower was thinking along the same lines.The Russians made no secret of their intentions. In November 1957 Nikita Khrushchev, the Soviet leader, declared in a visit to the United States in the peaceful field of trade we declare a war. The threat to the United States is not in the intercontinental ballistic missile but in the field of peaceful production. We are relentless in this and will prove the superiority of our system. ... 

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