Business / American Red Cross
American Red Cross
Autor: candigirl65 17 February 2013
Words: 954 | Pages: 4
Determine the impact of this event on ARC’s “benefits of business ethics” (employee
commitment, investor loyalty, customer satisfaction, and bottom line).
Clara Barton founded the American Red Cross (ARC) in 1881. Clara was inspired by the work of the International Red Cross while she visited Europe during the Franco-Prussian War. Bringing the organization to the United States was a good move because it for the domestic and international relief missions. The ARC follows seven fundamental bylaws they are: humanity, impartiality, neutrality, independence, voluntary service, unity, and universality (Ferrell, Fraedrich, & Ferrell, 2011).
Business ethics comprises the principles values and standards that guide the behavior in the world of business. Business ethics may not always be right or wrong, but the judgment influences it reputation in society (Ferrell, et.al. 2011, p. 7). Ethics contribute to employee commitment, investor loyalty, customer satisfaction, and profits. The American Red Cross (ARC) was criticized due to its ethical behavior during the disasters of both September 11th and Hurricane Katrina. The employee commitment harmed the organization because of the mishandling of funds, the sudden resignations of the president and chief executive officer due to unscrupulous actions of employees. ARC’s reputation had become severely damaged because of this misconduct. Investor loyalty was diminishing due to ARC not following what it said it would do. Following September 11, funds were raised in an astonishing amount, and was set up in a separate fund for the victims and the ARC decided it would only disperse approximately one-third of it to victims and use the other two-thirds to increase the organizations preparedness for and to respond to other future catastrophes. This caused an uproar because the monies raised was supposed to go to the victims of this disaster and they found it necessary to try to justify why they should keep a majority of tho...