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Red Cross Ethical Dilemmas

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Case 18: American Red Cross The American Red Cross was founded by Clara Barton in 1881 after she brought the model of the International Red Cross back from her travels with IRC. The setup of this organization is to help those who need disaster relief assistance. The ARC has helped with the World Wars and numerous other wars that the U.S was in. They provide relief to over 70,000 disasters each year. However, within the last decade they have been widely criticized for their response to two major disasters in the US as well as erratic leadership position moves causing concern that the organizational focus is lost. In addition, their control problems extended into the mismanagement of funds and ARC is made up of 500,000 volunteers and 35,000 employees, and at the top there is a 12-20 member governing board of directors. Over the last ten years, there has been numerous individuals in the CEO role because their predecessors were released for misconduct. The organization is further tarnished for the large severance packages that are handed to the dismissed executives. Critics have observed that leadership focus for a good chunk of two years went into searching for the right leadership rather than management of goals and infrastructure. The lack of control extended out to blood donation program where there was a lack of communication with the blood testing facilities. The disasters of Hurricane Katrina and 9/11 were two of the biggest events where relief and assistance were needed. Both instances resulted in a delayed and apparent apathetic response from the ARC. In addition to the disasters themselves, the funding raised to help this relief effort were mismanaged. Volunteers had unauthorized access to personal financial information when receiving funds. Some volunteers had arrest warrants and lengthy criminal backgrounds that should never have been allowed to help in their capacity. The items donated were also mismanaged, with numerous rental cars, generators, mattresses etc. going missing. 1. The root of the ethical problems were the mismanagement of funds, lack of response in major disasters, improper screening of volunteers and blood donation controls. If proper leadership controls were in place, the ball wouldn’t have been dropped in many different areas of the organization. Leadership is charged with making sure that proper protocols are reached and procedures are met. There was a clear pattern of lacking management. The culture is reflected from actions of those from the top-down. 2. During the crises of September eleventh and Hurricane Katrina, ARC was criticized for their management skills of managing funds. After 9/11, donations were pouring in to help the families of the victims. Shortly after, it was revealed that only a portion was being used for 9/11 relief and the rest was being banked for the future. It caused outcry by many and bad press as congress summoned leadership to a hearing. 3. In regards to Hurricane Katrina, the funds that were used went towards buying relief items that were not monitored properly. There were reports of numerous cars, generators, mattresses etc. that vanished. In addition, volunteers were not properly screened to be able to collect donations. Some volunteers had arrest warrants and lengthy criminal backgrounds. This all stemmed from lack of proper management and control. Policies should be implemented and proper management skills should enforce a highly ethical capacity.

4. The chief executive position is one that is highly regarded and is at the top of the leadership. The problems with ARC CEOs position is that the severance pay is so high that it doesn’t in any way condemn the actions of disgraced ousted CEOs. Each dismissed executive received high-grade severance packages upon their departure. To change this pattern, ARC needs to eliminate the severance package, or at least decrease it by a large margin. This would send a message to all levels that each is held accountable and no one receives a golden parachute for misconduct on the job.

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