Risk compartmentalization
Risk compartmentalization occurs when?
- companies place their most problematic employees into separate profit centers so that they cannot influence one another to act unethically
- all profit centers within a corporation are aware of the code of ethics.
- all profit centers within an organization become aware of the consequences of competitors’ actions.
- various profit centers within an organization become unaware of the consequences of their actions on the firm as a whole.
- ethics and compliance programs reduce the risk of misconduct.
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