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Running head: THE AMERICAN RED CROSS

The American Red Cross

Dr. Victor Oladapo Ethics and Advocacy for HR Professional

The American Red Cross
1. Determine impact of this event on ARC’s “benefits of business ethics” (employee commitment, investor loyalty, customer satisfaction the, and bottom line).
Ferrell and Fraedrich (2011) states that, “business ethics relates to rules, standards, and moral principles regarding what is right or wrong in specific situations. Business ethics comprises values and standards that guide behavior in the world of business” (page 7). Leadership decisions and judgment in an organization affects the company’s public reputation in society. Business leaders must embrace ethical standards and those standards need to be communicated through all levels of the business, most importantly among shareholders and with employees. Ethics contribute to the following areas according to (Ferrell, Fraedrich, & Farrell, 2011, p 18-21):
Employee commitment-employees who believe their future is tied to that of the organization and their wiliness to make personal sacrifices for the organization.
Investor loyalty- ethical conduct resulting in shareholders loyalty and the shareholders contributing to the success that supports even broader social causes and concerns.
Customer satisfaction- one of the most important factors in successful business strategy. A company must also seek to develop long-term relationships with customers and its shareholders.
Profits- a company must have adequate financial performance in order to nurture and develop an ethical attitude.
The actions of the American Red Cross after 9/11, Hurricane Katrina, the large severance packages given to resigned executives damaged the reputation of the American Red Cross by highlighting the organization’s unethical business practices. Employment commitment wavered due to the negligence of the organization failing to adhere to policy and

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