Riordan Manufacturing Corporate Compliance Plan

2847 Words Oct 18th, 2011 12 Pages
Riordan Manufacturing Corporate Compliance Plan

Applying the legal principles of business management correctly is absolutely essential to minimize risk in today 's fast changing global business environment. Effective managers must carefully, yet quickly and accurately analyze each situation, diagnose the correct problem and proceed to apply the correct legal solution. In this fast-paced, challenge wrought environment managers and the business organizations under their leadership need a legal framework that will help them make these critical decisions effectively. A case in point is the legal framework challenges facing Riordan Manufacturing.

Riordan is an international plastics manufacturer with 550 employees and $46 million in
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Enterprise Liability

Enterprise liability can arise out of Riordan 's China relocation plan. Riordan 's legal team will need to reassess and rewrite contracts with vendors and suppliers to mitigate the risks of such liabilities.

Contract laws affect an agreement between two or more participants. Such an agreement creates in each participant a responsibility to do or not do something and a right to the performance of the other 's responsibility or a remedy for the breach of the other 's responsibility (Oman, 2007). An ambiguous contract can cause a misinterpretation of ideas, needs, and wants. When joining in a contract, all parties involved need to ensure that they state their responsibilities and requirements clearly. Riordan must continue to manage its supplier and vendor contracts effectively or risk losing those suppliers and suffer irretrievable losses as a result. The effort to successfully manage contractual agreements must be a cooperative process between Riordan and its suppliers and vendors and must not leave too much room for interpretation on either side. To avoid this, the interests of both sides must be clearly specified in the terms of the contract. This way Riordan and its suppliers and vendors can avoid risks, minimize the liabilities, and benefit from the opportunities in their business relationship. Riordan must therefore address the changes the company and its suppliers and
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