Cultural Challenges in Mitigating International Supply Chain Disruptions

Managing supply chain risk requires assessing the exposure a firm faces to various risks and allocating resources to reduce the impact of a disruption. It also requires coordinating risk mitigating strategies across the echelons of the supply chain and business partners. Coordinating risk management with external suppliers and customers exposes the process to bias by contextual factors. These biases may be in the form of environmental factors related to location or cultural factors. We explore how these two factors impact the perception of risk and methods for mitigating it by conducting a survey in three countries: Japan, the United States of America, and Australia. We show that Japan has a significantly higher level of perceived supply chain risk and significantly lower application of risk mitigation strategies than two western culture countries, the USA and Australia.