Risk Compartmentalization Occurs When

question 36

Multiple Choice

Risk compartmentalization occurs when

• A)companies place their most problematic employees into separate profit centers so that they cannot influence one another to act unethically.
• B)all profit centers within a corporation are aware of the code of ethics.
• C)all profit centers within an organization become aware of the consequences of competitors' actions.
• D)various profit centers within an organization become unaware of the consequences of their actions on the firm as a whole.
• E)ethics and compliance programs reduce the risk of misconduct.

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Definitions:

Functional Divisions

The organization of a business into departments that each handle activities related to a specific function, such as marketing or finance.

Pay to Performance

A compensation strategy where employees' pay is directly linked to their performance, often used to motivate and reward high achievers.

Annual Budgeting

The process of forecasting an organization's income and expenditures for a fiscal year.

Production Goals

Targets set by a business for the quantity and quality of products to be produced within a certain timeline.