Assignment 3: the American Red Cross (Arc)” Essay

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Assignment 3: The American Red Cross (ARC)”
October 28, 2012
HRM 522 Ethics & Advocacy For HR Pro

Determine the impact of this event on ARC’s “benefits of business ethics” (employee commitment, investor loyalty, customer satisfaction, and bottom line). Business ethics includes the principles and standards that guide behavior in the world of business. The ethical behavior of a company is being judged and determined by its stakeholders. They may not always be right but their judgment affects the company’s reputation in society. There are several benefits of business ethics. Ethics contribute to (Ferrell, Fraedrich, & Ferrell, 2011, pp. 18-21): * Employee commitment – comes from employees who believe their future is tied to
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This did not sit well with donors or with government officials. A congressional hearing took place to look into the American Red Cross’s actions. They were forced to address their stakeholders concerns and demands. The American Red Cross’s reputation was damaged by their actions in the aftermath of this disaster. With the devastation of hurricane Katrina, the American Red Cross’s reputation was again damaged by their actions. The relief efforts were viewed as inadequate by the public. “These subpar emergency responses were the outcome of a host of fraudulent, questionable, and inefficient decisions made by the ARC, as well as its federal, state, and local disaster relief counterparts” (Ferrell, Fraedrich, & Ferrell, 2011, p. 331). There was a communications issue between FEMA and the American Red Cross and a disagreement on the roles and responsibilities of each agency. Another issue in the aftermath of hurricane Katrina was the mismanagement of funds and volunteers. “The accusations include the improper diversion of relief supplies, failure to follow Red Cross procedures in tracking and distributing supplies, and use of felons as volunteers in the disaster area in violation of Red Cross rules” (Ferrell, Fraedrich, & Ferrell, 2011, p. 331). The devastation was overwhelming and the amount of volunteers was more than they have ever seen. Because of this they did not go through their normal screening process. Items and money came up missing and

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