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It is a common belief that whenever most people tend to do something, it is considered as perfect without any flaws and currently the same seems to be happening with activities such as global sourcing and multinational purchasing, since they tend to provide lot of business opportunity options for the trading partners involved. However you might be bit perturbed to know that nothing is perfect and even business opportunity provided by global sourcing and multinational purchasing is fraught with certain kinds of danger if not carried out in a careful manner. In this article we will have a brief look at some of the risks associated with the business opportunity options which are provided as a result of global sourcing and multinational purchasing activities. What is the first thing which one does not like to lose over anything under their command? Well you guessed it right, for the answer is in the question itself. The first thing one wouldn’t like to lose in a command situation is the command itself. Speaking in other words, one would not like to lose control and in the context of business this means that by global sourcing and multinational purchasing, the parent organization would still like to retain overall control of the business processes and would not like to lose that control in exchange for business opportunity options. This has been a cause for concern since once you outsource operations; you tend to lose at least a proportion of the control you would have otherwise exercised. Of course with the advancement of technology it is much easier to keep communications etc but still the global sourcing and multinational purchasing activities do tend to cut control in lieu of the business opportunity options which they provide to the organizations. The second most important risk associated with global sourcing and multinational purchasing is that though the business opportunity might increase; sales might decrease in the long run if quality gets compromised because of the geographical distances involved in global sourcing and multinational purchasing activities. Such geographical distances are overcome to a great extent with the use of latest networking and communications technologies; nevertheless they do tend to take their toll hence a careful balance needs to be stuck between the business opportunity provided by global sourcing and multinational purchasing, and the loss of control and quality to a certain degree. Nevertheless it must be stated that despite the risks associated with global sourcing and multinational purchasing, there exists tremendous scope in terms of business opportunity options provided by them and hence there is just a need to be cautious and vigilant and not to be pessimistic about it.
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