How can firms leverage data available on political stability while managing global sourcing uncertainty?
Political uncertainty depends on the process by which governments are selected, monitored, and replaced. Therefore, measures for following factor obtained from World Bank database can be used to calculate country political uncertainty index score:
Political Stability and Absence of Violence/Terrorism (PV) – “…capturing perceptions of the likelihood that the government will be destabilized or overthrown by unconstitutional or violent means, including politically‐motivated violence and terrorism…” (The World Bank)
Finally, sourcing uncertainty from supplier’s country due to political issues can be determined using following criterion:
For instance, following sourcing uncertainty due to political issues can be determined based on country color which can be seen from map below and which are based on calculated political uncertainty index score for each country: