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In the first blog in our series on PESTLE risk monitoring, we look at the “P”—Political—and the role political factors play in terms of the supply-chain and third-party risks organizations face.
If 2016 taught us nothing else, it certainly demonstrated that the global political landscape is a volatile place—and not just in emerging nations. Uncertainty about Brexit, economic nationalism in the U.S., and growing populism across Europe have contributed to a rise in political risk. In fact, according to the Chartered Institute of Procurement & Supply (CIPS) Global Risk Index, the last quarter of 2016 reached its highest level—82.6 out of 100—since 2013. And while the first quarter of 2017 dipped slightly to 81.9, political factors will continue to expose companies to risk.
Globalization has fueled expansion into new markets and has enabled more cost-effective and resilient supply chains. But as companies expand their footprint into other countries and build out more complex, widely-distributed supply chains, they face increased exposure to political risk factors, including:
These factors directly affect companies’ ability to achieve its growth and profitability objectives—making it crucial to have timely insights into potential threats. Risk monitoring within a PESTLE framework can help achieve the needed awareness, allowing for more proactive risk management.
News stories, reports by NGOs, and other data sources offer insight into how political risk factors can affect companies with multinational operations or supply chains. Take a closer look at the ramifications of two key factors.
Companies must take calculated risks in order to meet organizational goals. Improving visibility into political risk makes it easier to respond with agility when serious risks surface. LexisNexis Entity Insight is a powerful tool that helps companies conduct ongoing monitoring, tailored to their specific risk concerns, via a convenient dashboard and RSS feeds into internal platforms. This helps ensure that decision makers throughout your organization have the information needed to mitigate risk. Learn more today.
1. Watch for the next blog in our PESTLE risk monitoring series—Economic risk
2. Arrange for a free 14-day trial of our PESTLE risk monitoring solution, LexisNexis® Entity Insight
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