Third-Party Risk Management for Amazon.com – Best Solved Sample Essays(2022)
This article covers sample essay about Third-Party Risk Management for Amazon.com
Permalink: https://privateessaywriters.com/third-party-risk-management-for-amazon-com
As you follow along, remember that our qualified writers are always ready to help in any of your nursing assignments. All you need to do is place an order with us! (Third-Party Risk Management for Amazon.com)
Third-Party Risk Management for Amazon.com
Introduction
Centrally based in Seattle, Washington, Amazon.com is an American company that provides online retail services, electronic book reading services, and web services. The company stands out as an electronic commerce firm that successfully operates on a global scale and is entirely distinct from its key competitors. Amazon.com became highly successful in the latter years even though it started merely as an online selling bookshop seeking to deliver books to everyone, anywhere. From this growth and recognition, the company has considered involving third-party sellers to its businesses. This is listed as one of the achievements of Amazon.com.
Nonetheless, at this point and level of technological growth, including third party sellers into their business could leave Amazon.com in jeopardy.
Per recent reports, third-party sellers at the company managed to achieve an increased share that surpasses that of the company itself. Gaus (2019) reports that, as of 2018, about 58 percent of Amazon’s sales belonged to third party sellers compared to 46 percent on the previous year. As previously noted, this poses a terrible risk to the company encompassing the substandard goods that have not been stamped by Amazon.com but are sold through it. Per Gaus’ (2019) report, an investigation conducted on the same proved that Amazon.com owned precarious or unregulated commodities, most of which had come from China.
Continuity of such ethics in business shall lead to the company’s downfall, soon having ruined its reputation too long trusted clients. The least the company can face shortly include frequent lawsuits from victims who might claim to have been harmed or scammed by such products. To have these challenges settled, the company may have to incur costs of hefty charges or fines. It is, however, possible for the frim to address this concern as early as now to avoid any probable problems of the future.
Addressing the third party trust issues at Amazon.com is critical purposefully for the continuity of its relevance in the market. Most importantly, the company should consider revising its third-party relationships and risk management principles; thus, ideally, limiting any possible violations of guidelines in place.
Discussion
To address issues on trust with third-party sellers, Amazon will most likely improvise a much-advanced criterion for evaluating the perfect fit for such a position and work towards maintaining a good relationship all through. As noted by Raval et al. (2017), it is a big challenge for multinational companies to monitor their foreign agents or, in this case, third party associates due to various reasons like foreign policies as well as the laws of the foreign lands.
It is not alarming how a third party universe is multidimensional and can even disentangle the knots that tie sophisticated multinational cooperation to its victory in a market and leadership. However, it is quite possible to have third-party inclusion’s operational decisions and moves regulated if proper regulation and limitations are put in place. For fruitful cooperation, Amazon.com should, as such, develop an impactful third-party risk program, which contains the following elements, which apply to both existing and new prospects.
Identification of Third Party Intermediaries (TPI)’s Universe
Third-Party Intermediaries (TPI) cover an enormous count of business associates such as logistics providers, clients, vendors, consultants, distributors, agents, partners, among many others. In this case, an organization may have numerous third-party intermediaries archived in their systems in different topographies. Therefore, to begin with, firms must consider knowing the TPIs’ universe, location of the data and how exactly it can be collected purposefully for risk assessment. The process of compiling the data is, in this case, fully dependent on how it is centralized the manner in which it is digitized.
When the data is held in various locations globally, it will definitely prove tough to collect. For instance, if a cooperation has to conform to the principles of Dodd Frank, they are obligated to study the innumerable steps of their supply chain to know the sources of their constituents (Enyinda, Ogbuehi & Briggs, 2008). Thus, the individual conditions of any given company might not really matter until sufficient Information is obtained for a successful risk assessment. Notably, it proves much easier and timesaving to make prompt efforts in acquiring Information from organization systems than waiting to use questionnaires or other forms at the latter stages.
Soon as the compilation of the TPIs’ universe and their relevant statistics is ready, companies should analyze third parties that fallout of the opportunity (Frio, 2015). The analysis is done purposefully to eliminate such TPIs. The analytics used should as well take into account whether the organization has had any transactions or business records with the TPI for the past year. Additionally, any other criteria that positive results in the analysis are welcome to use depending on the organization. Permanently, when an organization is fully conscious of its third-party intermediaries and feels safe to involve it in its entities, the next phase of evaluation can kick start.
Managing the Integrity Due-Diligence Process and Risk Assessment
When the identification and prioritization process for the TPI portfolios has been completed, or when a new third party needs to be added, an original method that is highly defined should be put to use. At this juncture, more Information on the third-party intermediary is further collected to analyze their level of integrity due diligence. Below are the correct steps to consider when handling this step:
A further collection of Information
Accompany will need to assume a given criterion when assessing and ranking the threats related to each TPI. In this case, the requirements tend to differ depending on the organization, including the region or country from which the operations will be grounded, the kind of a relationship between the TPI and the company, and the state of payment. In addition to that, the firm should also consider the type of industry, the expected period of the business relationship, the level at which governments are involved, the expected duration of the company, and the number of transactions annually (Frio, 2015).
Notably, some of the statistics needed for the compilation of a third-party intermediary’s threat characteristics can be easily found with the sponsor of the business or in the client files. Statistics on operations and compliance can also be gathered through questionnaires sent to the TPI or their internal business sponsor. After this is successfully done, the TPI can thereby be assessed.
Technology Enablers
It is also imperative to note that various other businesses use some kind of unsystematic approaches to Third-Party Risk Management (TPRM), which occasionally turn out to an array of electronic spreadsheets that are tough to crack (Raval et al., 2017). This kind of conduct complicates the process of assessing a third-party intermediary. Nonetheless, much more efficient solutions are available.
The most common solutions offered by technology include web-enabled functionalities, questionnaires on due diligence and appraisal skills, and dashboards that can be easily customized when controlling or managing the process. It is further advisable to acquire skills and constitute resolutions to offer help to conclude on the applicable third party intermediary risks attributes and design questions on due diligence. An organization can offer alternatively higher the services of professionals with the ability to technology solutions in cracking the real puzzle.
Risk Assessment
As soon as the company has gained access to the needful Information, it can analyze risks related to each third-party intermediary. The company is allowed to apply multiple weightings to the above-listed attributes under the company’s risk assessment strategy (Enyinda, Ogbuehi & Briggs, 2008). Application of the threat factors should be flexible enough to be pinned to any particular threat appetite of clients.
After the risk assessment process is done with the next phase of evaluation, the appropriate level of due diligence can be performed (Raval et al., 2017). This is only possible when the TPIs are characterized each by their risks. The following may be conducted depending on the risk profile of a third-party intermediary. First, decide that no ore intelligence due diligence is possible. Second, do a higher-level analysis on the prospect, perhaps by checking on their political relations or by conducting negative media search of their history.
The company can also consider performing an advanced desktop due diligence or terminate the relationship with the third-party intermediary.
As you continue reading, remember that our top and qualified writers are here to help with any of your assignments . All you need to do is place an order with us.(Third-Party Risk Management for Amazon)
Performing the Appropriate Level of Integrity Due-Diligence
Top professionals who are well experienced in this field can help a company determine the appropriate level of due diligence for third party intermediaries considering factors like jurisdictional risk, the type of service rendered, and the nature of the relevant industry (Frio, 2015).
They have the real potential to create affordable, accurate, and responsive reporting. Such companies, like Amazon.com, can only provide their policy to assist in the professionals in consistently remaining in sync with the application of the criteria to the portfolios of the TPIs. It is also worthwhile to hire experts who can use the same energy and standards to conduct a global or multinational assessment.
Performing Enhance Desktop Due Diligence
It is finding a digital solution that can extract data necessary to assess threats related to third party intermediary inclusion in business. Most importantly, the answer should cover a more significant perimeter on a global scale. It must collect data from court filings, media, press, regulatory enforcement documents, and much more. It should be cost-efficient (Frio, 2015). Additionally, such digital solution criteria should manage to find details such as an understanding of owners of TPI and its stakeholders, structure of the company and its operations, issues with company reputation encompassing any accusations, or any criminal records.
They should also identify sectioned individuals or companies (Horwath, 2013). It should further present a clear report on the criminal background information of the business owner’s profiles and that of the management team. Besides, a precise summary of the main findings and probable risks should be highlighted. It is further essential to check the objective examination of facts that relate to the risk concerns, Information on cost efficiency in regards to the third party, the Information on the local languages on foreign countries, and reviews for quality assurance.
Conducting High-Level screening for TPIs for Sanctions
When a third party intermediary has a lower risk profile, it is worthwhile for a company to consider present a more economical cost battered method on high-level sanction. Targeted approaches should use a top-notch of databases on the planet to search for national/global lists of sanctioned individuals and organizations (Enyinda, Ogbuehi & Briggs, 2008). In addition to that, global media proves helpful when looking for any imperfect reputational information.
Perform Full In-Country due Diligence Investigative Procedures
On many occasions, even conducting the most refined online due diligence might not turn out successful. Organizations may use more profound integrity due to the application of a third-party intermediary based on the preliminary rating of the TPI, its jurisdictional assessment, and the previously identified risk elements (Enyinda, Ogbuehi & Briggs, 2008). On the other hand, the company can as well choose to request for further procedures of clarifying findings, address any existing inconsistencies, and do a closer examination of the relationship based on the previous results.
Also, unpatrolled professionals can deeply assess integrity due diligence, which comprises the targeted methods that combine in-depth desk research and field examination. This is done to retrieve data, documents, hold interviews, as well as site visits.
Consider Using Local Law to Govern your Contract
Occasionally, companies fear engaging foreign policy in guarding their properties, contracts, or making appearances in court. This is common, especially to the emerging companies that are still trying to find their way through. A problem, however, is often seen hen things take a different turn only to realize that at that kind of level, support from local enforcement is unattainable (Flak & Matousek, n.d.).
This kind of mistake puts a company in jeopardy and leaves it with lesser options. By rightfully settling for the best law to govern a business, including how and where disputes shall be resolved, one should choose the local rule to make it easier for them to contact local authorities in case of any emergencies or misunderstandings. It makes things and concerns are attended to and addressed by witching the correct timeframe (Flak & Matosek, n.d.).
The law to be consulted, in this case, should come from the native land of the third party intermediary. For instance, when an American company is introduced in Germany, the American company owner should consider hiring a German attorney to help advocate for his businesses in the country before anything else happens. Having done that, and successfully been approved, the industry can after that be set comfortably since any issues of acute misconduct can be quickly investigated and direct court orders from the jurisdiction of the native land can be issued, which will fasten the rate of event and everything else that shall follow.
Conclusion and Recommendations
As previously highlighted, the biggest problem that Amazon.com Company is possibly facing is Third-Party Risk Management. For them to overcome this, the company will have to conduct the program described above. Amazon.com should fully understand its third-party intermediaries to the core. The size of the company itself gives enough room for ignorance of various aspects of business, like the proper assessment of third-party intermediaries despite how small or large they are.
As you continue reading, remember that our top and qualified writers are here to help with any of your assignments . All you need to do is place an order with us.(Third-Party Risk Management for Amazon)
This might come from the thought that almost all intermediaries might choose to read and abide by the rules and regulations given online. This is not always the case in many instances. Occasionally, various individuals engage in businesses with different motives. As such, they evaluate prospects to know who is real and capable of remaining ethical is vital, more or so, for multinational firms like Amazon.com.
Amazon.com must, therefore, take the responsibility to reevaluate its third-party intermediaries on a global scale. This should be done with much keenness and strictness without having to bend the law for no one. The company will most certainly manage to find the crooks within its midst and weed them out in time. If by any chance, the company will fail to execute the program proposed within this report, it should be ready to fight battles that shall take it down to the ground. Its competitors will quickly overtake it in no time when customers finally loose trust in it and consider alternative options.
References
Enyinda, C. I., Ogbuehi, A., & Briggs, C. (2008). Global supply chain risks management: A new battleground for gaining competitive advantage. Proceedings of ASBBS, 15(1), 278-292.
Flak, P., & Matosek, Z. (n.d.). Building a better working world – EY – United States. https://www.ey.com/Publication/vwLUAssets/ey-third-party-risk-management/$File/ey-third-party-risk-management.pdf
Frio, D. J. (2015). 3rd Party Risk Management. Chapters Site. https://chapters.theiia.org/charlotte/Events/ChapterDocuments/3RD%20Party%20Risk%20Presentation%20-%20IIA%20AFCE.pdf
Gaus, A. (2019, December 10). Amazon’s 3 biggest challenges for 2020. TheStreet. https://www.thestreet.com/investing/amazons-biggest-challenges-for-2020
Horwath, C. (2013). Closing the Gaps in Third-Party Risk Management. CFO: Corporate Finance News and Events. https://cdn.cfo.com/content/uploads/2013/12/Crow_IAA_Study.pdf
Raval, V., Shah, S., & ACMA. (2017, March 1). The practical aspect: Third-party risk management. Advancing IT, Audit, Governance, Risk, Privacy & Cybersecurity | ISACA. https://www.isaca.org/resources/isaca-journal/issues/2017/volume-2/the-practical-aspect-third-party-risk-management