American Red Cross Case Study

Ethical issues or dilemmas can range from conflicts of interest to fraud (Bethel, 2015). When most people think of ethics, the first behaviors that come to mind are honesty, fairness, and integrity (Ferrell, Fraedrich, & Ferrell, 2011). What does ethics mean to the upper leadership of the American Red Cross? According to an article written by Justin Elliott, approximately 40% of the employees feel distrust in the charity’s leadership and serious doubts about their commitment to ethical behavior (2014).

Honesty means being truthful and trustworthy and not trying to hide anything (Bethel, 2015). However, prior efforts to provide aid in times of disaster have left many in the public wondering what the American Red Cross’s motives are.

In 2000, the American Red Cross was held in contempt of court for repeated violations in violation of the Consent Decree that they had signed with the Food & Drug Administration in 1993 (Wolfe, 2012). In 2003, the decree with modified to ensure greater safety measures. However, the Red Cross has been fined $47 million in penalties due to findings during inspections (Wolfe, 2012). One such fine was $9.6 million due to blood safety violations in 16 of 36 blood collection sites nationwide (Koleva, 2012).

Where do they go from here? The American Red Cross could limit or prevent future ethical issues by implementing best practices as one of their core functions towards institutionalizing their operations (Ferrell et al., 2009). Basically, there are three core initiatives for an ethical culture that need to integrated into their ethics and compliance programs are legal practices, voluntary practices, and best practices (Ferrell et al., 2009). In theory, organizations who implement these practices significantly reduce their risk and

Therefore, federal laws, governmental regulations, and company rules are those items that must be followed. Historically, laws regulating business practices are established to provide basic rules for responsible business activity and to protect consumer safety (Ferrell et al., 2009). Ultimately, the American Red Cross should monitor and routinely conduct self examinations of their business transactions and activities to ensure they are compliant. Additionally, they could hire outside agencies to conduct the audits to ensure they are fair and impartial.

Voluntary practices are those items such as beliefs, values, and acts of philanthropy or culture of the organization (Ferrell et al., 2009). Certainly, the American Red Cross could work towards establishing an organizational culture of trust by not only conducting independent surveys of employees beliefs, values, and feelings of the organization; but, they could also create a Culture Committee that represents the change that needs to occur. Ultimately, senior management would need to buy in and emphasize the need for change or the program would never be