Arizona State University (ASU) SCM355 Supply Management Test 1 Practice

Globalization significantly impacts supply chain management by introducing regulatory compliance and geopolitical risks. As companies expand their operations across international borders, they encounter a complex landscape of varying laws, regulations, and standards that must be adhered to in each country. This requires supply chain managers to ensure compliance with a multitude of government regulations, from environmental laws to labor standards, which can vary vastly between regions.

Additionally, geopolitical risks arise from tensions between countries, political instability, trade tariffs, and differing economic climates. These factors can disrupt supply chain operations, lead to increased costs, and create challenges in sourcing and logistics. As such, supply chain management must adapt to navigate these complexities to maintain efficiency and compliance in a globally connected market. This makes option B the correct response, highlighting the true challenges posed by globalization to supply chain dynamics.

In contrast, the other options do not accurately depict the realities faced by supply chain managers in a globalized context. Simplification of trade rules is often not the case; instead, trade can become more complicated. Technology remains essential in managing global supply chains, rather than being reduced, and supplier choices are often expanded in globalization rather than limited.