Professor Afraa Al Bahrani
Ethics and Advocacy for HR Professionals-HRM522
January 27, 2013
Determine the impact of this event on ARC’s “benefit of business ethics” (employee commitment, investor loyalty, customer satisfaction, and bottom line).
The American Red Cross is classified as a not-for-profit charitable organization whose mission is dedicated to providing services to those in need. It plays important roles in society by placing public service above profit. They use a network of donors, volunteers and employees around the world to relieve suffering by servicing five areas: disaster relief, blood donations, providing support for American military families, providing health and safety services and giving support through international humanitarian services. Although they exist as a not-for-profit enterprise, business ethics are still essential to the success of any organization. The American Red Cross has received the highest ethical performance from its employees and volunteers because they give a responsible to the society (American Red Cross, 2011).
In September of 2011 terrorists attacked the World Trade Center and The Pentagon. Almost 3,000 people die and more than 6,000 were injured and in need of help. The American Red Cross raised more than 500 million dollars in response to the 9/11 attacks. There was a problem because they only distributed 154 million dollars in aid. The question than became where the money went. The American Red Cross claimed the money that was donated went into a big pool of money that was distributed by the company’s corporate governance (The Socialist Worker, 2005). In addition, The American Red Cross urged people to donate blood even though the blood was not needed at that time and a good amount of it was destroyed. In the end, The American Red Cross was criticized by donors and the government for not distributing the donated money directly to the 9/11 victims.
In 2010, Haiti was struck with a huge earthquake that killed over 300,000 people, injured another 300,000 people and left over 1 million people homeless (Wikipedia.org, 2010). Immediately after the earthquake, The Red Cross stated that they planned to start building homes, providing access to clean water and sanitation systems, deliver health care and educate communities how to not spread diseases. In response to the disaster, thousands of committed volunteers and employees rushed to Haiti’s aid as well. Due to people’s trust in The American Red Cross and their wanting to help, even after 9/11, they donated money again to The Red Cross. According to the Chronicle of Philanthropy, over 240 million dollars was privately donated to The Red Cross for Haiti relief. In total, over 400 million dollars was raised by the Red Cross for Haiti relief. Out of that money, only 148.5 million was spent in the first year towards the victims of the Haiti earthquake. Despite the promises of the Red Cross to distribute the money specifically to Haiti victims, two years after the earthquake they still have over 70% of the donated money in a bank and have not fully assisted the earthquake victims. While 300,000 did benefit from clean drinking water and sanitation provided by The Red Cross, millions are still homeless and the country is still battling diseases that are preventable if proper health care was in place and donors still question where their donations went.
Determine and discuss the role that ARC’s stakeholder orientation played in this scenario.
The American Red Cross states that it aims to communicate with stakeholders so that they understand how the company operates. The American Red Cross can’t have strong communication with the public unless it has a strong sense of internal communication. They do not have good communication with their stakeholder because the public still does not know where most of the money went. “One of the motto’s of...