Abstract
Corporate America has become more concerned with ethics and compliance programs as a result of the passage of the Federal Sentencing Guidelines for Organizations (FSGO) of 1991. The FSGO make the organization liable for the illegal acts of individual employees. The organization can be fined and/or placed on organizational probation. The guidelines specify minimum standards of performance for organizations in supporting, developing, and implementing their ethics and organizational compliance initiatives. If the organization has been found to not maintain an effective compliance program and an employee engages in an act of antitrust, for example, the penalties can reach the maximum. The base range of penalties under the guidelines is $5,000 to $72,500,000. The FSGO establish seven key areas that organizations should consider including codes of ethics, ethics training, top level management support, adequate reporting mechanisms, care in delegation of discretionary authority in the organization, disciplinary mechanisms for offenders, and revision of the system as improvements can be made. The FSGO have had a enormous impact on organizations giving them an incentive to develop effective compliance programs. Until the passage of the FSGO, many large organizations such as Sony did not have organized, formal compliance programs or codes of ethics.
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© 2015 The Academy of Marketing Science
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Ferrell, L.K., Loe, T.W., LeClair, D.T. (2015). Creating Ethical Compliance Systems in Marketing Organizations. In: Wilson, E., Hair, Jr., J. (eds) Proceedings of the 1997 Academy of Marketing Science (AMS) Annual Conference. Developments in Marketing Science: Proceedings of the Academy of Marketing Science. Springer, Cham. https://doi.org/10.1007/978-3-319-13141-2_51
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DOI: https://doi.org/10.1007/978-3-319-13141-2_51
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