What Comes to Mind with Relation to Due Diligence and Risk Management Practices A business is bound to engage third party services in their operations . 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 companies have to go an extra mile to ensure that they are not entangled in issues that may spell disaster. It is a perfect time to undertake due diligence practices to help them come to terms with what they are dealing with. The first step is to analyze the third party. They need to get their facts right with respect to the third parties activities . The political affiliations and practices furthered by third parties should be understood well by the business that work with them. 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 ascertain that the third party in question does not flaunt any statues that guide their operations. The need to asses the risk involved is key. There will be risks that will be encountered in every operation that a venture is involved in. 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. Placing funds in projects that are meant to generate cash flow should be executed after determining their validity. There is also a limitation that can be caused by friction between third parties and their employees. They need to be very precise on how they expect the third parties to behave with respect to their staff as it may come back to bite them later. The use of middlemen in the transactions should be reduced significantly to only accommodate those that are absolutely necessary. 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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Upon reaching an amicable decision to engage with a particular third party it is important that the due diligence and risk management practices are continued. 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. This allows the company to work around risks as they expand their operations.