Final Paper
Christopher A. Malloy
PHI 445: Personal & Organizational Ethics
Instructor: Sandra Watts
June 3, 2013

Final Paper
The two organizations I will be focusing on throughout the course are two organizations I have actually donated to. The not-for-profit organization is the American Red Cross and the for-profit organization is Cancer Treatment Center of America. Being in the military and having a family member to have passed from cancer, these two organizations are dear to me and my family.
The American Red Cross of America is the type of organization that produces products to support disaster relief, supporting the military families, health and safety training and education, blood drives for lifesaving blood and international services. The majority of their employers are volunteers that have been involved with the Red Cross because of the help they received during a disaster or life-changing event in their family. Their customers are the American people during times of disaster such as tornado, flood, fire or earthquake victims. Their customers are also, internationally whenever disaster strikes. So the treatment of them both, such always is fair and impartial. The American Red Cross manufactures their product through corporate and foundation funding, community partners, individual major donors and a national celebrity cabinet. The way they utilize their product is by teaching their employers and customers how to prepare their home and family, school and workplace. It will also educate on the different types of emergencies and where to get the tools and resources to better equip for these emergencies.
A few problems that are facing the not-for-profit organization that I have chosen are the FDA fining the American Red Cross for blood safety lapses, financial issues cutting into the Red Cross and they now have their eighth president in ten years. This type of instability will pay a toll on any type of organization.
The new FDA fines come from the inspection of sixteen Red Cross blood centers from April to October 2010. Their inspections have revealed problems that endanger donors and have allowed potential contaminated blood into their supply. The workers have complained that the long hours may have caused improper screening of the blood. Some may have been mislabeled or there may have been contamination through careless storage or transport. The new president, Gail McGovern took over last year while the ARC was 200 million dollars in debt. She used her management background from AT&T and Fidelity Investments to cut 1300 jobs, raises, benefits and operating expenses. The cuts have eliminated 75% of the deficit. Although this looks like a plus for the organization, they are still unable to get rid of the image concerning the safety of its blood operation. The newest FDA recall was for tainted blood collected a month ago.
What has caused the problem with the American Red Cross is mishandling of the money. The previous CEO’s that stepped down were receiving a salary of more than $650, 000.00 a year. The last one that stepped down received a severance package of $780,000.00. This type of mishandling of money from an organization that relies on donations will eventually destroy an organization. Also, with the disasters from hurricanes Rita and Katrina has paid a toll of the finances of the ARC. Americans generously donated over 3 billion to charities around the nation. Not more than six months after the hurricanes, the ARC has distributed 84 percent of the money. This is including a 194 million reserve fund for long term recovery of its local chapters. They had insufficient resources to cover the reconstruction of the Gulf Coast.
This problem impacts the organization in several ways. It is causing the some workers to lose their jobs and others to go on strike, instability in the leadership with all of the changing of CEO’s and tainted and mishandling of the blood supply from overworked employees.
Possible solutions to fix these problems are to actually put a CEO in charge that is willing to be more concerned about cleaning up the ARC than lining their pockets, hire more inspectors, storers and transporters in order to properly handle the blood supply or get a bailout from the government just as the car manufacturers did.
The best solution I will suggest will be a bailout. This will give the government the opportunity to monitor the finances of the ARC, allow the people that are employed there to continue working, give them the opportunity to hire the workers they need to properly work there and the FDA will have better control of the blood supply and how it is handled.
The way the American Red Cross is responding to these problems are not in an ethical way. They are merely attempting to cover their own selves, which is leaving a lot of people out of a job and overworking other individuals. This is only leading to more poor storage of blood and when a disaster does strike, they do not have the full capabilities to respond in a timely manner. The ARC did create this unethical problem by not being totally prepared for the disasters that occurred simultaneously and with using the money they had saved for the disasters as severance packages for the incompetent CEO’s they had to get rid of over the past ten years. The American Red Cross could have done so much more by foreseeing the trend of the disasters that were occurring during the time and keeping a shorter leash on the next CEO that they hired after the last one ended up making such poor decisions. Also, before the problem had gotten too big, they could have asked the government for a bailout package, which would have given them the opportunity, keep the help they needed in order to run the facilities. Although Mother Nature was a major contributor to these problems with Hurricane Katrina and Hurricane Rita, the CEO’s at that time did a poor job distributing out the money to the people that needed the relief. By waiting so long to respond to the survivors during those hurricanes, made it more expensive for the American Red Cross in the end.
The type of ethical theory the American Red Cross used was the egoism theory. It seemed the individuals in charged were too busy being concerned on how they could make a profit out of these disasters and not thinking of the individuals that needed the help. Another reason I am saying the egoism theory was used is for the fact that when it came down to letting people go; they started with the workers instead of the actual individuals who were the root of the problem. When the CEO’s were let go, they got severance packages for doing lousy jobs. This only put the ARC more in debt, without the ability to properly function and for the people who needed help; they were unable to receive it. The ethical theory that the American Red Cross should have used is the moral relativism theory. If the CEO’s moral virtue would have been their strength, they would have thought more of what the ARC was actually for and not strayed away from the mission. You will have more compassion for the individuals that needed the assistance and will be willing to help them in all areas. Areas such as financially, manpower, and with enough supplies to better adjust from whatever disaster. Even if it meant taking less pay to get the job done. The workers would not mine less pay if it is equal around. But when you only cut the pay and cut the jobs of the employees, while the CEO’s are still making the same or even more money while they keep their jobs, people will always be upset.
The ideal relationship between bad or suffering and profit, depends on your status in the workforce. The American Red Cross has made some very bad choices when dealing with their finances due to these past disasters. In order to attempt to make a profit or to pay back their fines, they have released key people that collect, handle and store the supplies they need. In return the individuals let go are now out of work and they are truly suffering because of the choices made.
A way for the American Red Cross can run a good ethical business, you must not think of how can I get rich and think of ways to make a great product that will help everyone and how all the people that both work and invest in your business can make a profit. The bottom line of any business is making a profit. But when it cost the jobs of many and it is done illegally in order for you to prosper, then it is unethical.
The best way for the American Red Cross to stay competitive is to find a CEO that is willing to make the correct changes that is needed in order for them to provide the proper assistance they can for society. They need to start at the top when it comes to cleaning house. All of the bad apples that are there for their own personal gain need to be released without no type of severance packages. This way, they may be able to pay the fines they owe the FDA and in the long run may be able to hire more workers in order to not accumulate any more costly fines.
The Cancer Treatment Center of America is the type of organization that is looking for a way to prevent and cure the disease of cancer. The majority of their employers are doctors, but their customers are the family members suffering with cancer or they have someone suffering with the disease. The treatment of them both will always be fair and impartial. The CTCA manufactures its product through research. This is done by clinical trials and through contributions. The success of the Cancer Treatment Center of America is due for the fight for a cure of cancer.
A few problems facing the for-profit organization of the Cancer Treatment Centers of America are their false claims of their survival rating, the organization being ran by someone that has a history of deception and how this for-profit organization is only enrolling patients that do not have a terminal illness.
The CTCA has always claimed to have a somewhat great survival rate when it claimed to curing cancer. The founder, Richard J Stephenson helps wealthy individual set up a not-for-profit corporation and personal trusts in order to avoid paying federal income and inheritance taxes. He pleaded guilty to the misdemeanor. Then there were allegations of unproven cancer treatments. They were using treatments such as acupuncture, acupressure, chiropractic, naturopathy, and homeopathy and mind-body medicine. None of these treatments had any type of scientific support showing that they were a benefit for cancer. Some of them actually have a risk of harm.
In March 2012, the CTCA was charged with manipulating their survival rating in order for their statistics to look better. The national average of survival from cancer was 38 percent for both prostate and non-small cell lung cancer. But the CTCA would influx their numbers to 68 percent for prostate and 60 percent for non-small cell lung cancer. This was very misleading to cancer patients and it was a way for the CTCA to get more business. Although cancer is a disease for the aged, the elderly that were uninsured or covered by Medicaid seem to have died sooner. In Tulsa, Oklahoma if you were from certain demography, you were turned away on the suspicion that you may not have the insurance the CTCA was looking for in order to pay for the treatment. The CTCA would only count the treatment that was received at their facility. This excluded the patients that exhausted the treatment at local facilities and arrived to the center with advanced disease.
Ways to correct these problems are to get rid of founder of the CTCA and put someone in charge that is not willing to let a dollar be the outcome of a life, do proper treatment on patients that will be beneficial for the longevity of their life and get the Better Business Bureau involved in the correct output of information in order for them to stop the false advertisements of their claims.
I would have to say that getting rid of Richard Stephenson is the best solution of the problem. If you were to destroy the true root of this evil, the rest of the body will die. You must put in charge an individual that is willing to help their patients. They must hire someone that wants to properly treat all of their patients and not fool them by false claims and false treatments. They must instill in the workers that all patients, no matter where they are from and how much money they make, will receive the best treatment possible.
The ethical dilemma that the Cancer Treatment Center of America is dealing with is the shady dealing of its founder. Richard J. Stephenson began his career off bad, with business deal that helped investors to hide money and it carried over into him opening the CTCA. He has only operated on patients that he was sure they would be able to cure in order for their rating to stay higher than their competitors. Also, they would turn away patients that did start treatment with them and drain their finances with bogus treatments and then send them to someone else that were local. The way the Cancer Treatment Center of America responded to all these claims was very unethical. They did all they could to not help the people they were treating with false therapy such as acupuncture, acupressure, chiropractic, naturopathy, and homeopathy and mind-body medicine for the sake of making money. They falsified their documents in order to stay ahead of the competition. They also turned away seriously ill patients in order to keep their ratings higher.
The Cancer Treatment Center of America should do a lot more for the people they are assisting. They need to help the patients that have already been diagnosed with the disease and they also need to keep trying to find a cure that will help prevent people from suffering later.
The CTCA created this dilemma on their own at the beginning of their existence. As I have repeated throughout this paper, Richard J. Stephenson is the main problem in the Center. He may have wanted to do good by founding the CTCA when his mother died from the disease, but when money came into the picture, greed definitely took over. He was willing to have patients suffer with this deadly disease to make money that to cure them or find a cure. The way this could have been prevented, was to actually do research that will be helpful for all.
The ethical theory that the Cancer Treatment Center of America used was definitely egoism. From the founder to the employees down to all of the investors of the CTCA was only thinking of themselves to make a profit and not the actual patients they were supposed to help. This is and never will be the best theory to run any corporation or business. It is a selfish way of thinking and in the end; the people that you are supposed to be helping will be hurt or even dead.
The type of ethical theory that should be ran when dealing with patients will always be moral relativism. You must have compassion for the people you are helping and not look to see if they can pay a bill or if they are too sick. You must have the mind frame that you will help them as much as possible or find a way to make their last days comfortable.
The ideal relationship for the Cancer Treatment Center of America is bad, profit and suffering. The bad dealings of the founder, Richard J. Stephenson lead to profits for him who led to suffering to the patients that were supposed to be treating and their families.
To run a business such as the Cancer Treatment Center of America, you must be the type of CEO that is wanting to actually a cure for such a deadly disease. Especially if you have a close relative such as Stephenson did with his mother. Your main objective should be to not let another person suffer from this illness and the ones that do have it; they will find a comfort zone in dealing with their illness.
The best way for the CTCA to stay competitive is to clean house from the top on down. Get rid of the crooked founder, the bad CEO’s and the incompetent employees that are willing to make a dollar instead of helping the patients. Put people in the positions that will help the people and if they are not able to assist the people, find someone that can. Do not think of the people as statistics and think of them as people who actually need help. This will not only make the patients and their families better, but seeing the good they are doing, they will bring in a better working environment for the employees when they see all the progress being made.
In conclusion, both the American Red Cross and The Cancer Treatment Center of America have the same problems. That being financial, lack of employees and poor leadership. But it can all be solved if the government take charge, give them a financial bailout in order to provide the funds for operation and then hire the correct people that are willing to want to help their customers than to help line their own pockets.

References:
Boggan, S. (2013). Common Dreams http://www.commondreams.org/headlines01/1020-01.htm http://ww2.cancercenter.com/about-us/history/
Fieser, J. & Moseley, A. (2012). Introduction to business ethics. San Diego, CA: Bridgepoint Education, Inc.
Smillie, I. (2013). Institute for Human Rights and Business