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American Red Cross Ethical Dilemmas

Decent Essays

Question 1) In a narrative format, discuss the key facts and critical issues presented in the case. What are the reasons for the ARC's ethical dilemmas, and how can the organization guarantee that these problems will not recur in the future? The American Red Cross has been recognized for as our nation’s Humanitarian organization for assisting people with catastrophic disasters. As a independent organization, all of their monetary donations were contributed by volunteers and public financials, which included United Way. American Red Cross was incorporated in 1881, by Clara Barton and a small group of acquaintances. Today, the network has over approximately over a half million volunteers and 35,000 employees that are divided into chapters to …show more content…

According to Holguin (2002), the CBS news cited a list of misconduct on issues such as; “the fundraiser in Louisiana caught padding her own bank account with donations; the manager in Pennsylvania who embezzled to support her crack cocaine habit; and the executive in Maryland who forged signatures on purchase orders meant for disaster victims.” One of the biggest charity frauds in history occurred at the ARC’s Hudson County chapter in New Jersey. Chief executive Joseph Lecowitch and bookkeeper Catalina Escoto stole well over $1 million in Red Cross funds, squandering it on gambling and gifts to themselves. Escoto also gave herself at least $75,000 in bonuses. Even after Congress mandated changes meant to do away with such problems, in 2007 an executive in Orange County pleaded guilty to federal charges that she had embezzled at least $110,000 of the organization’s …show more content…

Immediately, Congress to steps through legislation mending disclosed documents that were never open to the public before, now available to view. There were several positions and budget cuts made throughout the organization, by revamping the role on board appointments, which was initially done by the President. The American Red Cross updated their Code of Conduct policy in 2007, which all staff and volunteers had to read and sign. They also implemented 24-hour hotline called “Concern Connection Line” that allows anyone who may have questions or concerns involving potentially illegal, unsafe, or unethical behavior. Question 2) Explain the possible ethical issues in the culture of the Red Cross that created the problems discussed in this case. In my opinion, the possible ethical issues are they lacked strong leadership within the organization. The way ARC handled Hurricane Katrina in 2005 and 9/11 in 2001 that resulted in being criticized and poorly managed. The ARC has had to address allegations of fraud, bribery, and even theft on the part of volunteers and employees working for the organization. The ARC also has faced a number of internal challenges due to high turnover in management, as well as charges of overcompensation to oust out executives regardless of their length of stay and possible corruption among its board of directors and

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