American Red Cross Ethics

1005 Words5 Pages
The American Red Cross (ARC) Ruby M. Clarke Strayer University Ethics and Advocacy for HR Professionals HRM 522 Professor ALBAHRANI July 14, 2012 Abstract The American Red Cross (ARC) is an organization that was founded in 1881 by Clara Barton and established itself as the most well-known emergency relief organization devoted to the care of war victims, disaster victims, and the suffering worldwide. Unfortunately, the ARC has been plagued with a high executive turnover, slow response to disastrous events, and mismanagement of donation funds. These problems now have the ARC facing another problem, fixing their credibility for the future. Paper is about the American Red Cross the impact of the event and benefits of business ethics…show more content…
Stakeholder orientation is “the degree to which a firm understands and addresses stakeholder demands” (Ferrell, Fraedrich, & Ferrell, 2011, p. 34). Stakeholders are “customers, investors and shareholders, employees, suppliers, government agencies, communities, and many others who have a ‘stake’ or claim in some aspect of a company’s products, operations, markets, industries, and outcomes” (Ferrell, Fraedrich, & Ferrell, 2011, p. 31). There were many concerns regarding the American Red Cross in the scenario. The goal of the American Red Cross is to bring aid to victims of a disaster. The attacks on New York City’s World Trade Center and Hurricane Katrina were major events the effected the United States. The American Red Cross came under heavy scrutinizing due to how they handled these events. Determine and discuss the ways in which ARC’s corporate governance failed to provide formalized responsibility to their stakeholders. Corporate governance is formal system of accountability, oversight, and control companies put in place to remove the opportunity for employees to make unethical decisions (Ferrell, Fraedrich, & Ferrell, 2011, p. 42). Ferrell, Fraedrich, & Ferrell go further and give the following definitions for each aspect of this system: Accountability refers to how closely workplace decisions are aligned with a firm’s stated strategic direction and its compliance…show more content…
Mandatory, in-person, ethical classes should be held every year for employees and volunteers to help reinforce the ARC’s claim that they are fixing their internal issues. Also, executive leadership needs to be held accountable for their actions and not given monetary compensation upon their dismissal or resignation. Each of these things would help mend the American Red Cross’s image and help show the public that they have truly learned from past mistakes. The American Red Cross needs to market itself as a prominent, ethical, and transparent nonprofit organization” (Ferrell, Fraedrich, & Ferrell, 2011, p. 333). They need to implement and adequate screening and management process for volunteers. There needs to be better communications within the organization and improvements need to be made throughout the organization from top to bottom. “In 2007, the American Red Cross embarked on comprehensive governance reform including the most significant amendments to the Congressional Charter in 60 years. Changes were signed into law by the President of the United States to modernize the Board to focus on strategic oversight and governance” (Governance, 2011). This is a step in improvement but improvements need to happen more often. Closer monitoring is needed and changes need to be
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