BA 300 Exam 1 Part 2

Card Set Information

BA 300 Exam 1 Part 2
2012-02-10 01:21:12

Ethics and the Law
Show Answers:

  1. What is the relationship between Ethics and the Law?
    The reflection of society's minimum norms and standards of business conduct. The domain of ethics includes the law but extends beyond it to include the ethical standards and issues that the law does not address.
  2. What is the Federal Organization Sentencing Guidline? And how does it function?
    1. FEOSG is a governmental established guidline for judges to use in sentencing businesses and other organizations convicted of crimes, such as: defrauding the government, bribery, or other offesses.

    • 2. The key to determining the organiation's criminal sentence is the assignment of a culpability score, which ranges from 0-10. Every organization starts with a score of 5 which is adusted upward or downard based on a series of factors.
    • The sentencing guidlines use a 'carrot and stick' approach to managing corporate crime. THe carrot provides incentives to organizations to develop a strong internal control system to detect and manage illega behavior. The stick provides for severe punishment for organizations that are convicted of crimes and were not proactively managing legal compiance within the organization.
  3. What is a Culpability Score? And what factors determine an assigned score?
    • The culpability score is a facet of Federal Organizational Sentencing Guidlines. The score is designed to capture the organization's institutional response to the offense before and after its commission.
    • Lets say the base fine for an offense is 1million. A culpability score of 6 would multiply the fine by 6 resulting in a fine of 6million.
    • The culpability score goes up or down from the base based on factors such as:
    • 1. Whether the company blows the whistle on itself to the governement (worth a deduction of 5 points)
    • 2. or has an effective program in place to prevent or detect crime (worth a three point deduction).
    • 3. The base score can increase if there is a high level of participation in the crime by a big company of over 5,000 employees (5 points increase)
    • 4. Or obstructing an investigation into criminal wrongdoing (3 point increase)