CHARASTERISTICS OF THE EARLY WARNING SYSTEM ON STRATEGIC RISKS IN INTERNATIONAL BUSINESS OPEREATIONS
This paper aims to establish the level of development of the early warning system used in the business risk management system with special emphasis on strategic risks. The sample of research consists of Croatian companies that operate within the international market. The constructed model of the early warning system should indicate opportunities and threats and should also enable the consideration of the positive and negative dimensions of risk. The primary survey was conducted using a structured questionnaire through the Google Forms platform and using the Likert scale with a scale of 1-5, where (1) is “I completely disagree” and (5) “I completely agree”. In data analysis, the Hi-square method is used, which is the most applicable non-parametric method of quantitative data analysis. The survey collected 120 responses. All four tested hypotheses have been confirmed, allowing for the following conclusions: First, an early warning system which is properly modeled and operationalized allows for predicting future business events. Second, this early warning system should be focused on the possibility of taking advantage of strategic opportunities and, third, avoiding strategic threats. Fourth, this system should be located within the organizational unit Controlling. A properly modeled and operationalized early warning system for strategic risks arising in international business should also contain the following elements: holding regular meetings, regularly using and implementating of SWOT analysis, analyzing the external environment, monitoring and obtaining information on the technological environment, regularly using and conducting PESTLE analysis, regularly using and implementing Porter’s five-force model, monitoring and obtaining data on the economic environment, and using the services of various professional associations and institutions. Observing current events, analyzing past events, and assessing events and future changes makes it easier to evaluate the early warning system, therefore determining whether it detected any changes that further affected fluctuations in the economic and social environment. This approach formulates the basis for avoiding risk and its negative consequences that may arise as a result of unexpected changes.