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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. This third parties include shareholders, suppliers and other entities. Their interactions are however characterized with limitations. There are health and safety risks, compliance, environmental, legal and political factors that may be involved in their interactions. The company should be in a position to stay clear of incriminating factors that may be brought about by third party involvements. This necessitates the need to perform due diligence and risk managements operations. The initial step should be to assess the third party. That is they should familiarize themselves with what the third party is bringing to the table. 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 need to verify that the parties they are partnering with have registered a record of compliance with the laws in place that guide their operations. There should be deliberate efforts to familiarize themselves with the risk involved. There are always risks attached to the activities that businesses embark on. There is a risk of not getting the target output they expected from the projects. The aim of any business is to make profit and some investments may not necessarily present that advantage. Looking critically into the prospects of getting back the money and earning more from a particular project whether an acquisition or an investment should be done meticulously. There is also the risk of staff problems that may be brought about by the failure of the third party to relate well with their employees. They should be very particular in ensuring that the employees are treated fairly to avoid being associated with the events. 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 consumers concerns should take first priority to alleviate the feeling of disapproval by clients.
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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 carter for any changes that may be introduced by third parties. Due diligence and risk management efforts are concerned with the identification analysis and dealing with issues before they develop into major limitations. This allows the company to work around risks as they expand their operations.