Affiliations: J. Mack Robinson College of Business, Georgia State
University, Atlanta, GA, USA | Professor of Strategy, Bitther School of Business, St.
John Fisher College, Rochester, NY, USA
Note: [] Corresponding author: S. Tamer Cavusgil, Fuller E. Callaway
Professorial Chair and Director of the Institute of Intemational Business, J.
Mack Robinson College of Business, Georgia State University, Atlanta, GA,
30303, USA. E-mail: cavusgil@gsu.edu
Abstract: Country risks are macro level risks. As exogenous risks, these
ripple down from country to company level, embodied in strategy, relationships,
collaboration, operations, and cultural patterns. This chapter examines the
process of risks as they transit with a domino effect from macro level to
company level. We consider the misalignment to be at the heart of such risk
rippling. Alignment (or misalignment) between the two partners, operating from
two different countries, represents the underpinnings of risk spills and shifts
(which we refer as risk debasement) in the overall workings of a supply
network. The chapter is based on several considerations. First, we establish
the literature and theory pertaining to this topic. Second, we examine the
observations that are gathered through field study of suppliers in Turkey and
Italy involved in a globally created complex product – the U.S. Joint Strike
Fighter (F-35). We then delve into the discussion of consequent hazards when
the risk issues are not resolved.
Keywords: Country level risk, risk analysis, strategic visibility, strategic congruence, adverse selection, moral Hazard, hold-up problem, culture gap
