American Red Cross Case Study

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Jpz777 04/25/2013 Order # A2092821 1.) Determine the impact of this event on ARC's "benefits of business ethics" (employee commitment, investor loyalty, customer satisfaction, and bottom line). In the wake of the double-edged sword caused by its scandalous mismanagement of the September 11th terrorist attacks and Hurricane Katrina's devastation of New Orleans in 2005, the venerable charity organization American Red Cross (ARC) was subjected to intense public and political scrutiny. This pressurized process of external examination eventually revealed an abundance of systemic flaws in the ARC's organizational management structure, including widespread fraud and abuse of privileges by executives, gross misconduct on the part of volunteers and other employees, and an astounding level of wasteful spending as it pertains to funds that were ostensibly donated to a charitable cause. The four established benefits of business ethics, as described by Ferrell, Fraedrich, and Ferrell in Business Ethics, of employee commitment, investor loyalty, customer satisfaction, and bottom line (2011) all experienced dramatically detrimental consequences that were directly caused by the ARC's corrupt and incompetent management structure. During the investigation into accusations of misconduct filed by ARC volunteers after the debacle in New Orleans, "more than a dozen Red Cross volunteers from around the country described an organization that had virtually no cost controls, little oversight of
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