The American Red Cross
The American Red Cross (ARC) is an independent organization, supported by public financial donations and volunteerism. It provides relief to victims of disasters and help people prevent, prepare for and respond to emergencies. The company has been widely criticized for the way it handled 9/11 in 2001 and Hurricane Katrina in 2005 as being inadequate and poorly managed. The company has allegations of fraud, bribery and even theft on the part of volunteers and employees working for the organization. It has also faced internal challenges due to high turnover, as well as charges of overcompensation and possible corruption among its board of directors and upper management. After bad press, the ARC faces many challenges in marketing itself as a prominent, ethical and transparent nonprofit organization. QUESTIONS
1. Explain the possible problems in the ethical culture of the Red Cross that created the issues discussed in this case. * Problems like executive compensation and employee misconduct in handling the money for the victims was caused by greed and desire to make more money and not considering the consequences. * Lack of personal ethics and concern for others is what caused the company to spend the volunteers money intended for disaster by expanding the company other than distributing it to help the 9/11 victims. * Mismanagement of funds and volunteers caused improper diversion of relief supplies, failure to follow Red Cross procedures in tracking and distributing supplies, and use of felons as volunteers in disaster areas which is violation of Red Cross rules. * Discrimination in disbursing relief and after disasters to employee embezzlement are employee misconduct issues which indicates a system issue and has caused a lot of stakeholders mistrust on the company. * Lack of clear and efficient communications with federal and local government agencies like strategic plans on how to respond to organization...
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