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What Comes to Mind with Relation to Due Diligence and Risk Management Practices A business has to work with third parties in their day to day endeavors. They may include shareholders, suppliers and other firms. This move however is faced with a number of challenges. The number of issues that may raise risks are such as compliance factors , environmental issues, political and legal factors, health and safety factors among others. The companies have to go an extra mile to ensure that they are not entangled in issues that may spell disaster. Due diligence and risk management practices act as vaccines for the particular company. The initial step should be to assess the third party. They need to get their facts right with respect to the third parties activities . The need to be acquitted with the third parties state of affairs including their connection with political affiliations is key. It will actually serve to give the venture insight on whether it would be wise to work together with a particular third party. They should be sure of the third parties adhere to the rules availed to dictate the nature of their operations. They should be in the light on the risks that are likely to present themselves while working with third parties. There are a number of risks that are associated with whatever transactions that will be undertaken by the company . They might have to look into the risk of loosing their money in a failed investment project. The target of a venture is the ability to make good returns which may be a challenge with investments as some are bound to fail. Placing funds in projects that are meant to generate cash flow should be executed after determining their validity. Any bone of contention between third parties and their workers may rub off the business if not well handled. They should be clear on the policies and employee treatment as any short fall in the third party will be counted as they shortcoming. The risk of middlemen should be addressed seriously with efforts being made to reduce their presence or at least retain only those that are significant to the firms operations. The threat of consumer dissatisfaction with relation to any aspect of service or product should be addressed before things get out of hand.
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There should be on going efforts to ensure due diligence and risk managements efforts are being undertaken even after reaching an agreement with third parties. They will be useful in catering for change of patterns in the operations of a third party. Due diligence and risk management practices aids in the identification, assessment and mitigation of risks before they escalate and pose threats. It allows the company to expand and be in a position to do so for long without having to deal with major risks.