Diversification,related Party Transaction And Operating Risk Prevention

Since the 18 th National Congress,General Secretary Xi has attached great importance to innovation and development,emphasizing that innovation should be carried out in theory,system and practice.Diversification strategy can help enterprises avoid risks,occupy markets and build new markets.Nowadays,most of the innovations of enterprises' diversification strategies have evolved into an integrated business model or an ecological business model.In the process of diversification,they tend to connect the upstream and downstream industries,focusing on internal market construction and platform construction.In the development of diversified and innovative enterprises,related-party transactions have become highly frequent,highly versatile and highly permeable,and the resulting operating risks are more complex and diverse.Therefore,it is imperative to conduct research on operating risk caused by diversification and connected transactions,but there is little research on this aspect in the existing literature.Taking this as an opportunity,firstly,this paper discusses correlation analysis about diversification,related transaction and operating risk based on their theoretical basis,and summarizes the types of operating risk.Then it points out that Letv has operating risks including blocked business model innovation,excessive bad debts,decline operating performance,credit downgrade.The paper explains the consequences and causes of Letv's operating risks.Finally,the study proposes the corresponding countermeasures for enterprises to effectively prevent operational risks.The study found that the related transactions of diversified enterprises have high frequency and complex characteristics,and the resulting operating risks are more concealed.The research results will enrich and expand the theory of strategic management,internalization theory and risk management,which lays the foundation for future research.The research also arouses the attention of senior executives to prevent and control operating risk.At the same time,the countermeasures proposed in this paper can provide effective solutions for other listed companies to prevent operating risk,safeguard the interests of investors and creditors,and also contribute to the sustainable development of the same type of enterprises.