Literature Review on Supply Chain Risk Management

The provided document is a collection of academic papers and articles related to supply chain risk management and literature reviews. It includes studies on managing global megaprojects, supplier relationship management, and credit risk in Islamic banks. The assignment aims to provide an overview of the topic and explore various methodologies for conducting literature reviews in supply chain management.

Running head: MANAGING INTERNATIONAL BUSINESS RISK
Managing International Business Risk
Name of the Student
Name of the University
Author’s Note

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Executive Summary
Managing international business risk is the primary concern of this specific study. Based on the
article the study has highlighted some effective business issues. An in-depth knowledge and
understand is given on risk and uncertainties. The author in this article opined that risk is the
effect of uncertain environmental components occurs at the workplace of an organization. While
running the entire business process organizations have to face some uncertain situations due to
which risk factors arise. On the other hand, uncertainty refers to the situation occurred within a
workplace in an unpredictable manner. After highlighting some of the major business issues
provided in this article the study has given some major recommendations as well for overcoming
the business issue.

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Table of Contents
1. Introduction:................................................................................................................................3
2. Risk and risk analysis:.................................................................................................................3
3. Differences between risk and uncertainty:..................................................................................4
4. Three primary uncertainties that multi-national corporations face:............................................5
5. Three major categories of responses that MNC might adopt for managing risk.......................10
6. Proposal for solutions:...............................................................................................................12
7. Conclusion:................................................................................................................................14
Reference List:...............................................................................................................................15

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Selected Article C: Miller, K.D (1992), A Framework for Integrated Risk Management in
International Business (adapted), Journal of International Business Studies, Vol 23, No.2 (1992),
P.311- 3311.
Introduction:
This very specific article has depicted in-depth vista about the importance of integrated
risk management in order to control the entire flow of international business. While running the
entire process of business, managers have to face innumerable uncertainties as well as risks. In
this particular article, the author has made a clear difference between risk and uncertainty.
However, the study has focused to describe the three major uncertainties that a multi-national
corporation may have to face for running their business. On the other hand, some of the major
ways of solutions for overcoming those uncertainties is provided in this study.
2. Risk and risk analysis:
In general point of view, the concept of risk is primarily used with finance, economies
strategic management and so many. The author in this article has stated that risk is the effect of
uncertain environmental components occurs at the workplace of an organization. While running
the entire business process organizations have to face some uncertain situations due to which risk
factors arise. As a result, it reduces the level of performance predictability that ultimately
hampers profitability of business.
Askari and Askari (2012) stated that analyzing the risk factors is highly significant for
every business organization. Business managers of different organizations tend to implement
some alternative business strategies and policies so that any kind of risk can be overcome. The

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author in this article has specifically mentioned that organizations may have to face immense
political risks, competitive risks and financial risks. Before entering in the new market,
organizations may have to face major political risks that hamper their business process. The
entire taxation policies, government rules and regulations may not be suitable for the
organization to run their business effectively. On the other hand, launching a business wings in
the competitive market is a major risk. The organization has to face immense challenges in
achieving brand image and reputation amidst the competitive market. As emphasized by Aebi,
Sabato and Schmid (2012), the business managers have to accept threats from the competitors in
maintaining product quality as well as service quality. Therefore, before establishing a brand in
the current market the organization has to make an effective risk analysis.
3. Differences between risk and uncertainty:
The overarching term on the other hand is primarily used in strategic management and
organizational theory. Uncertainty as per the point of view of this author refers to the situation
occurred within a workplace in an unpredictable manner. The author has categorically stated that
the two specific terms risk and uncertainty are inseparably related to each other though
significance of these two terms differs. Risk is the effect of uncertain situations occurred at the
workplace. While running the entire process of business the employees have to face innumerable
uncertain situations, which are completely unpredictable. These kinds of unpredictable situations
increase rate of risks. Therefore, based on uncertainty the business experts can predict risks.
Lavastre, Gunasekaran and Spalanzani (2012) stated that business experts can reduce the
risk factors after identifying its negative effects. On the other hand, uncertainty is completely
unpredictable. The business experts after evaluating the uncertain situations tend to implement

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some alternative business strategies for overcoming the risk factors. For an example, occurrence
of sudden technological barrier is an uncertain situation for which the business experts were not
prepared. After this kind of sudden occurrence, the organizational manager has to focus on
analyzing the risk factors and implement alternative strategies and policies.
Managing uncertainty is very much challenging for business experts. On the other hand,
managing risk factor is easier as the information is available. For an example, due to any kind of
environmental barrier the business experts have to face immense difficulties in running their
entire process of business effectively. On the other hand, after facing the environmental
challenges the organizational managers tend to identify the risk factor first. Based on the risk
factors the managers implement some effective alternative strategies and policies. Kardes et al.
(2013) opined that after evaluating various differences between these two overarching terms it
can be concluded that uncertainty is the cause of increasing risks. Therefore, business experts
before analyzing risk factors have to identify the uncertain situations first.
4. Three primary uncertainties that multi-national corporations face:
Multi-national companies while running their entire process of business in various
geographical boundaries and locations have to face innumerable uncertainties among which three
major situations are most prominent. These are as follows:
 General environmental uncertainties:
General uncertainties include political instability, government policy instability,
macroeconomic uncertainties, social uncertainties, and natural uncertainties. Political
uncertainties arise due to the chancing policies and rules of political system. Due to different
kinds of political turmoil such as tax policies, unnecessary war and revolutions, instable position

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of political parties the business organizations have to be affected in running their business wings
effectively. Eiteman, Stonehill and Moffett (2012) opined that political uncertainties such as
fiscal as well as monetary reforms, price control, threats on the nationalization are the several
causes of business turmoil. On the other hand, social uncertainty arises due to the uncertain
changes of government rules and regulations. After reformations of new regulations and acts
some of the people belonging to society tend to show their respect in maintaining these policies.
As a result, the country has to face immense political turmoil, which results a negative effect on
business. For an example, after the incident of Brexit, the organizations of UK had to face
immense economic barriers. International business organizations have faced innumerable
challenges in establishing their entire business process in the market of UK after separation of
Britain from EU. The primary reason of this kind of business turmoil for MNC is political
uncertainty.
Britain in order to avoid extreme liberalization decided to leave EU, which resulted a
complete political and economic misbalance on the overall business sector all over the World. As
emphasized by Dionne (2013), business experts faced immense challenges in entering in the new
market of UK due to economic turmoil. On the other hand, after the separation of EU and UK,
business organizations are unable to maintain international challenges. Employee rates have
become uncertain. Large number of employee turnover took place for occurring economic
turmoil in Europe. As a result, the organizations belonging to Europe have faced immense
environmental uncertainties.
However, due to these kinds of political uncertainties organizations have to face immense
challenges in rendering the success of business. Bernardini et al. (2012), stated that business

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experts have least opportunities in delivering their products and services to the international
market. As a result, the scope of business expansion in the international becomes limited.
 Industry:
As per the point of view of this author, industry uncertainty occurs due to three specific
reasons that include input market uncertainty, product market uncertainty and competitive
market uncertainty. Input market uncertainty implies the situations that are related to the
qualities and quantities of inputs in the production process. Sometimes, it is observed that
business organizations tend to change their suppliers and distributors for rendering a change in
products (Bromiley et al., 2015). It may have a negative effect as well. If the consumers tend to
show their negative feedback after using the products and services, the business experts have to
change their suppliers immediately.
The Iconic, one of the most recognizable supermarket chains of Australia in retail
industry had decided to change their supplier for rendering an innovation in their products. At the
initial stage, The Iconic only focused to maintain fashionable clothes suitable for young
generation. In order to expand their business process the business experts have decided to change
supplier for rendering diverse clothes suitable for various group of people. In order to expand
their brand scope the business experts have chosen to change the suppliers. However, after taking
this decision, The Iconic is getting extreme negative feedback from the customers due to the lack
of product quality. In order to input different kinds of products, the organization may have to
face input uncertainty, which actually decreases the reputation of brands.
Product uncertainty arises due to the change of needs and demands of industry’s output.
With the gradual and dynamic progress of civilization, customers’ needs and demands are

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changing gradually. In this kind of situation, the business experts have to face uncertain
situations. Hammer (2015) opined that with the gradual progress of customers’ trends, the
organizations have to focus on providing products and services. Otherwise, the customers show
their reluctant attitude in using the products from that organization. Consequently, business
experts have to face innumerable difficulties in maintaining brand image and reputation. For an
example, MacDonald at the very beginning of their journey focused to sell burgers. As per the
customers’ demands, the business experts decided to add product variety by implementing
various flavored beverages. After rendering product variety, this particular company has grabbed
the attention of customers more effectively.
Competitive uncertainty is the most effective market threat that business organizations
have to face especially while entering in the new market. Large numbers of business
organizations exist from a similar industry. As per the point of view of Reboredo (2013),
implementation of innovative product or service in a particular organization is the cause of major
threat for other companies. Customers like to pay their attention in using services from those
organizations, which renders innovative designs in their products. Therefore, an effective market
strategy of a rival company is the cause of serious competitive uncertainty for others.
For an example, Coles is one of the most prestigious brands occupying a dominant place
in various multinational countries. At the initial stage of their journey, the business experts
focused to draw the attention of international premium customers. However, after the emergence
of Woolworths, this specific organization like Coles has faced a major challenge from its
competitor. Woolworth has primarily targeted low cost customers along with maintaining the
quality of products. As a result, the customers can avail the products of Woolworths in
affordable price range. In this kind of situation, the business experts of Coles have to face

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competitive uncertainty due to the limited range of target market. In comparison to the target
market of Woolworths, Coles is possessed with limited number of target group. As a result, in
last five years the organization has faced immense difficulties in maintaining their business
sustainability in market (Waemustafa & Sukri, 2015).
 Firm specific variables:
Kern et al. (2012) stated that firm specific variable implies different uncertain factors that
every business firm has to face due to the issues related to labor, research and development,
operation, behavior and so on. Uncertainty of labor arises due to the rapid growth of employee
absenteeism. After implementing extreme level of autocratic leadership at the workplace,
employees gradually lose their interest in providing their best effort towards services. On the
other hand, the rate of absenteeism increases due to the implementation of dominating
environment. In this kind of situation, the business experts have to face uncertainties in running
their wings effectively in the market. Operating uncertainty implies uncertainty related to raw
material storage, production and entire supply chain. Due to the communication gap among the
employees the business managers fail to maintain an effective balance between supply and
demand of the products and services.
In this kind of situation, the organization has to face uncertainties in their entire operation
process. Customers get deprived of receiving the services in proper time. As a result, business
organization fails to maintain their organizational image effectively. In addition, after the
emergence of advanced technology the business organizations have very much dependent on the
advancement of technology (Colicchia & Strozzi, 2012). Due to any kind of sudden
technological crisis, the entire flow of operation process becomes uncertain. This particular

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uncertainty is very much harmful for developing the entire process of business. For an example,
in few years back Yebhi.com has raised a major issue due to sudden technological barrier. The
customers had to wait for a long time for receiving the services. As a result, they lost their
patience on the service quality of this organization. Yebhi.com is a well-known e-commerce
retail brand, which has already achieved immense recognition in the international market. Due to
technological error, the business experts could not connect their voice with service users. Due to
this kind of uncertainty, the organization has faced immense challenges in maintaining their
business glory.
5. Three major categories of responses that MNC might adopt for managing risk
Three major categories of responses for managing risk factors for a multi-national
corporation are as follows:
 Financial risk management:
 Strategic risk management:
 Integrated risk management:
Financial risk management:
In order to reduce the financial risk factors the organization can purchase insurance and
buy financial selling instruments. The capability to lock in a fixed up price is the primary risk-
reducing feature of futures. It can forward contracts of both the buyers as well as the sellers.
Multinational corporations are widely used widely use Financial hedging in order to manage
foreign exchange risk. Seuring and Gold (2012) stated that business firms by purchasing
insurances can protect their internal properties. For an example, while enhancing technological
as well as physical equipments for expanding entire business process, the executives do not have

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to face any kind of risk factors due to this insurance. If any kind of sudden accident takes place at
the workplace, the business experts would get their property back. As a result, organizations by
making insurance policy can manage the financial risk factor that can ultimately protect the
company from being affected and injured.
Strategic risk management:
In order to avoid various risk factors at the time of implementing corporate strategies,
some of the major initiatives can be taken. The research and development team can be motivated
for collecting immediate feedback from the customers. With the dynamic progress of market,
needs and demands of the customers are changing. In this kind of situation, research and
development team of every business organization has to be more active and participative for
collecting an in-depth overview about new market trend (Walker & Jones, 2012). In order to
reduce the rate of environmental uncertainties, the strategic managers have to analyze
environmental factors first. Based on the climate and weather the experts have to make effective
business plan. Any kind of logistics and supply chain process should not be processed in bad
weather. Otherwise, the delivery of products may not meet the deadline. In order to avoid any
kind of uncertainties regarding employee liberty, the organization can follow participative form
of leadership style at the workplace instead of using autocratic form of leadership. In
participative form of leadership, the employees can get enough liberty of sharing their views and
opinions regarding the success of business. As a result, both the employees and the employers
can work under agile work environment.
Integrated risk management:

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One of the most effective strength of implementing integrated risk management is that it
can facilitate an explicit recognition of trade off among exposures to different uncertainties.
Integrated risk management is associated with scheme funding. In order to make effective
corporate governance the concept of integrated risk management is implemented within the
organization. For an example, the establishment of joint venture is one of the most effective
integrated risk reduction strategies. Yazid, Razali and Hussin (2012) opined that the
organizations in quest of expanding their entire process of business tend to enlarge their internal
resources. Moreover, at the time of any kind of sudden crisis, the business experts can share their
burden after implementing joint venture.
6. Proposal for solutions:
However, while evaluating various uncertainties some of the major issues faced by multi-
national corporations are highlighted. After identifying those specific issues an effective
recommendation can be provided:
 Making an effective research about competitors’ market strategy:
Quer, Claver and Rienda (2012) stated that competitors’ market strategies grab the
attention of customers. In this kind of situation, the business experts by involving their research
and development process tend to gather in-depth information about competitors’ market
strategies. Based on the competitors’ market strategies and policies the business experts have to
reform their internal strategies for drawing the customers’ attention in market.
 Maintaining effective communication with the suppliers:

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It has been observed that lack of communication is one of the most effective factors
based on which production managers and suppliers have to face difficulties (Dunning, 2012).
With the gradual change of market demand, organizations have to render innovation in their
products as well as services. In this kind of situation, the business experts should make an
effective communication with the suppliers so that they can get proper raw materials.
 Collecting immediate feedback from customers about their needs:
Along with getting an overview about competitors’ market threats, the organization has
to collect effective feedback from the customers as well. Based on the customers’ demands and
trends the organization has to modify product as well as service quality. Multi-national
corporations in quest of gathering feedback from the customers can use social media vehicles.
Kerzner and Kerzner (2017) opined that the impact of social media in current business scenario
is wide that can involve the people of different geographic locations together. Business experts
by sitting at their own workplace can gather necessary feedback of the customers. In addition,
direct marketing is one of the most effective ways of collecting customers’ feedback
immediately.
 Providing effective training and development session to employees for enhancing
technological skill:
As per the opinion of Aven (2012), employees may not have enough flexibility in
operating the advancement of technology. In this kind of situation, employees may have to face
challenges in controlling the business process due to the lack of sufficient skill and competency.
However, in order to gain proper competency, the business experts should provide training
session to the employees so that they can easily overcome sudden technological barriers.

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7. Conclusion:
This very specific study has provided detailed analysis about the various strategies and
policies about managing international business risk. The entire study has evaluated an overview
about the differences between risk and uncertainties. Based on the article, three major
uncertainties are there that a multi-national corporation can face while running their entire
business process. Critical overview is provided based on the three uncertainties such as general
uncertainties, industry uncertainties and firm variables. The study has given three major
categories of responses that MNC might adopt for managing risk. However, some of the major
recommendations have also been provided in order to overcome the issues raised in this very
specific article.

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Dionne, G. (2013). Risk management: History, definition, and critique. Risk Management and
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Dunning, J. H. (2012). International Production and the Multinational Enterprise (RLE
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