Certified Supply Chain Professional (CSCP) Practice Exam

Which of the following represents an external threat to businesses?

1. Internal policy changes

2. Employee turnover rates

3. Technology, taxes, and laws

4. Equity financing decisions

The correct answer is: Technology, taxes, and laws

The correct answer highlights the various external factors that can significantly impact a business's operations and overall success. Technology, taxes, and laws are considered external threats because they are outside the control of the organization yet can have profound implications on how a business functions. For instance, changes in technology can disrupt market dynamics and require businesses to adapt quickly to remain competitive. Similarly, modifications in tax regulations can directly affect a company’s financial health, potentially altering profitability and influencing decision-making processes. Laws governing operations, whether they relate to labor, environmental compliance, or trade, can introduce new requirements that businesses must navigate to operate legally and successfully. In contrast, the other options describe internal issues that may affect a company's operations but do not fall under the category of external threats. Internal policy changes, employee turnover rates, and equity financing decisions are all aspects that organizations typically manage internally and can influence the operational environment but do not represent external pressures or threats from outside the organization. Understanding the distinction between internal and external factors is crucial for effective risk management and strategic planning in supply chain management.