The American Red Cross

1. Determine the impact of this event on ARC’s “benefits of business ethics” (employee commitment, investor loyalty, customer satisfaction, and bottom line).

The American Red Cross (ARC) is an independent organization, supported by public financial donations and volunteerism, (Ferrell, Fraedrich, & Ferrell 2012). ARC’s benefits of business ethics have impacted employee commitment, investor loyalty, and customer satisfaction in a myriad of ways.

ARC has been scrutinized over the past decade for its high turnover, overcompensation to employees, and corruption amongst the board and management. Since 1999, top executives have been proven or suspected of fraud (forging signatures), lying, embezzlement, miscommunication (internally and externally), and knowledge of theft of volunteers. These acts show very little employee commitment. How can someone that honors the organization’s mission and values display such unethical behavior?

Employee commitment does not only include unethical behaviors, but there are practices that should be put into place to gain the trust, loyalty, and commitment of executives, staff, and volunteers. In an effort to decrease and eliminate unethical behavior, ARC should immediately strongly enforce and monitor the expectations of the organization’s Code of Conduct policy from top executives down to volunteers and line staff. Training, development, and ongoing monitoring of management of funds, issuance of supplies, and receipt of blood donations show also be top priority. If this is done, ARC should be able to significantly reduce turnover and unethical behavior, gaining the trust and commitment of others throughout the organization.

“Strong relationships with investors have fundamental importance for corporations,” (Ali, Rehman, & Akram, 2011). The importance of obtaining investors is to assist the organization with obtaining and use of resources that are not readily accessible to ARC, and expedite assistance needed by victims. Investor loyalty spiraled down after years of unethical behavior demonstrated by these top executives and throughout the organization. ARC’s corporate reputation of unethical behavior significantly impacted the investor satisfaction and loyalty. Even larger, there is no investor that would want to be attached to any organization with a negative reputation. In turn, individuals do not want to become volunteers, and the public does not want to make monetary, supply, and even blood donations. Who would want to be a part of an organization that they cannot trust? One that does not value their own mission statement and vision? Lastly, the purpose of investing is to make a profit. If an investor is a part of an organization such as ARC that is held to the highest levels of ethics and integrity for disaster relief victims, and does not, then what does this say about their character?

ARC’s customer satisfaction was down. Some examples