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American Red Cross

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The American Red Cross (ARC)
Coby Turner
Dr. Matthew D. Gonzalez
HRM 522
October 23, 2011

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

There was a huge impact on The American Red Cross’s benefits of business ethics concluding all the events that took place in New York, September 11, 2001 and the 2005 Hurricane Katrina that devastated New Orleans. Not only did ARC fail to perform as expected during these disasters, but all of the misconduct that were taking place with the organization were being exposed as well. ARC’s employees including volunteers were not committed to representing the organization and working to continuing the positive reputation that the company started with. Instead the employees and volunteers of ARC were suspected of unethical practices such as lying, stealing funds and other donations that were meant for relief efforts. Stakeholders and other groups associated with the ARC began to lose trust in the organization because of their mismanagement of funds and donations. With ARC’s careless and unethical business practices, investors started to become hesitant to contribute to the organization for fear that contributions would not be used for what it is intended for. Also overtime there were many other non-profit organizations in need of monetary and other forms of donations. With a lack of trust in the ARC, other organizations started to get a lot of the contributions from investors that was once donating to ARC (Ferrell, Fraedrich, and Ferrell, 2011). Customers or people of need were not satisfied because of ARC’s slow response time to specific disasters that devastated New York in 2001, and New Orleans in 2005. These disasters were handled so poorly that it cost presidents Bernadine Healy and Marsha Evans their jobs. In

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