Risk Management of Different Forms of International Business within the Context of Global Supply Chains Cover Image

Управление на риска при различните форми за осъществяване на международен бизнес в контекста на глобалните вериги за доставка
Risk Management of Different Forms of International Business within the Context of Global Supply Chains

Author(s): Zhelyazko Valchev
Subject(s): Economy, Supranational / Global Economy
Published by: Университет за национално и световно стопанство (УНСС)
Keywords: supply chain; global supply chain; global supply chain management; risk management; international business
Summary/Abstract: It is fairly common to observe different forms for conducting international business as part of each global supply chain framework. There are specific advantages emanating from the unitization of each one of those forms. This, however, means high level of complexity as well as unpredictability as their application is being characterized by inherent risks that are not homogenous and depend on multiple factors – complexity degree and character of the business operation itself, necessity to allocate financial resources or other external resources, market structure, etc. In this paper we will review the specific risks faced by the companies which conduct different forms of international business in order to participate in the global supply chain. At first, we will focus our attention to the import and export which are considered rather simple business operations but, nonetheless, could lead to the incurrence of great variety of risks. Second, we will review the risks pertaining to non-capital contracting forms for international market penetration – licensing and franchise. Some detailed attention will be paid to the outsourcing which is a main tool for global supply chain modelling as well as international production cooperation – both forms are characterized by a degree of complexity and extensive inter-company partnerships. At last, we will review the foreign direct investments which are recognized as the most complex of all forms of international business which leads to great risk predisposition.