Business Ethics

Good Essays

Determine the impact of this event on ARC’s “benefits of business ethics” (employee commitment, investor loyalty, customer satisfaction, and bottom line). A survey conducted by NBES indicated that 79 percent of employees agree that ethics is important in continuing to work for their employer while approximately 20 percent of employees are not concerned about the ethical environment of the organization. According to Ferrell & Faedrich (2010), a commitment by the organization to goodwill and respect for its employees usually increases the employees’ loyalty to the organization. The misconduct by executives, slow responses to disasters, money mismanagement, and donation mismanagement issues caused a division between the organization …show more content…

ARC was able to overcome a lawsuit that Johnson & Johnson filed which claimed that ARC was benefitting from confused consumers who thought the cross on the first aid kits, preparedness kits, and related products were actually being sold by Johnson & Johnson. Both parties dismissed their suits and countersuits and ARC’s reputation did not suffer any further damage as a result (Ferrell, Ferrell, & Fraedrich, 2010). ARC also implemented a Code of Ethics to give to all its employees, which cover conduct and business ethics. All employees are required to read all the material and give their signature as acknowledgement. There is still skepticism about the ethics and conduct at American Red Cross, however, they have taken steps in the right direction to improve their reputation and bottom line.
Determine and discuss the ways in which ARC’s corporate governance failed to provide formalized responsibility to their stakeholders. Corporate governance involves formal systems of accountability, oversight, and control that remove the opportunities for employees to make unethical decisions. American Red Cross’ corporate governance failed to provide responsibility to its stakeholders because of organizational changes at the top. There was no consistency in management and therefore, no accountability. The lack of corporate governance was responsible for the organization’s slow response to September 11th along

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