Case Study: American Red Cross
International Business & Economics Research Journal
Volume 3, Number 1
American Red Cross
Debora J. Gilliard (E-mail: gilliard@mscd.edu), Metropolitan State College of Denver, USA Rajendra Khandekar (E-mail: khandekr@mscd.edu), Metropolitan State College of Denver, USA
Abstract The American Red Cross has been plagued with problems over the past two years from an antitrust lawsuit, repercussions from the distributions of funds from the Liberty Fund to the survivors of the World Trade Center disaster, problems with donated blood, a negative report from the Better Business Bureau, and a negative news report on CBS’s ’60 Minutes’. This case study looks at the history of the Red Cross, provides information about the services provided by the organization, discusses the problems the American Red Cross has encountered over the past 3 years, and introduces Marsha Evans who took the position of CEO in August 2002.
1. Introduction
A
s Marsha „Marty‟ Johnson Evans took the helm of the American Red Cross on August 5, 2002, she was faced with the challenge of restoring the public‟s faith in the organization. During the past 24 months, there has been a barrage of negative publicity regarding the American Red Cross. In June 2000, workers at the American Red Cross went on strike. The organization was hit by a lawsuit filed by HemaCare Corp. and Coral Blood Services in January 2001. The plaintiffs alleged that the American Red Cross engaged in unfair trade practices in the pricing of blood. The Better Business Bureau made false public statements about the ability of American Red Cross to meet their standards for charitable solicitations. Then on September 11, 2001, Americans watched in horror as terrorists flew two planes into the World Trade Center buildings. In the aftermath of this tragedy, donations poured into the American Red Cross, and a special fund – the Liberty Disaster Relief Fund – was established by the then American Red Cross President Bernadine
Volume 3, Number 1
American Red Cross
Debora J. Gilliard (E-mail: gilliard@mscd.edu), Metropolitan State College of Denver, USA Rajendra Khandekar (E-mail: khandekr@mscd.edu), Metropolitan State College of Denver, USA
Abstract The American Red Cross has been plagued with problems over the past two years from an antitrust lawsuit, repercussions from the distributions of funds from the Liberty Fund to the survivors of the World Trade Center disaster, problems with donated blood, a negative report from the Better Business Bureau, and a negative news report on CBS’s ’60 Minutes’. This case study looks at the history of the Red Cross, provides information about the services provided by the organization, discusses the problems the American Red Cross has encountered over the past 3 years, and introduces Marsha Evans who took the position of CEO in August 2002.
1. Introduction
A
s Marsha „Marty‟ Johnson Evans took the helm of the American Red Cross on August 5, 2002, she was faced with the challenge of restoring the public‟s faith in the organization. During the past 24 months, there has been a barrage of negative publicity regarding the American Red Cross. In June 2000, workers at the American Red Cross went on strike. The organization was hit by a lawsuit filed by HemaCare Corp. and Coral Blood Services in January 2001. The plaintiffs alleged that the American Red Cross engaged in unfair trade practices in the pricing of blood. The Better Business Bureau made false public statements about the ability of American Red Cross to meet their standards for charitable solicitations. Then on September 11, 2001, Americans watched in horror as terrorists flew two planes into the World Trade Center buildings. In the aftermath of this tragedy, donations poured into the American Red Cross, and a special fund – the Liberty Disaster Relief Fund – was established by the then American Red Cross President Bernadine
References: 1. 2. Mediator: The CEO must be able to communicate with volunteers, paid workers, and donors and reconcile any differences the individual might have. Empathy: Anticipate needs of victims and ensure the organization can provide needed items or services. Motivator: Encourage volunteers into action. In a non-profit organization such as the American Red Cross that relies on the help of volunteers, managers do not have the typical „stick and carrot‟ (ability to hire, fire, increase salary) found in for profit businesses. Thus, the CEO needs to motivate and find appropriate rewards for volunteers. Know what is happening: Engage in „Management by Walking Around‟ activities to understand what is happening at all levels of the organization. Spokesperson: The CEO personifies the organization and is the most visible representative of the American Red Cross to the public. The CEO must communicate clearly and often to the stakeholders of the organization. Visionary: Be able to look at the macro-picture and set a direction (discussed above). Thompson, J.D. (1967). Organizations in Action. New York: McGraw-Hill. Thompson, J.D. & Strickland, A.J. (2002). Strategic Management: Concepts & Cases, New York: McGraw-Hill Irwin. Notes 65 International Business & Economics Research Journal Notes Volume 3, Number 1 66