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  • Essay / American Red Cross Case Study - 974

    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 do ethics mean to senior leaders at the American Red Cross? According to an article by Justin Elliott, around 40% of employees feel distrust of the charity's management and serious doubts about their commitment to ethical behavior (2014). Honesty means being honest and trustworthy and not trying to hide anything (Bethel, 2015). However, past efforts to provide disaster aid have left many in the public wondering what the motivations of the American Red Cross are. In 2000, the American Red Cross was found in contempt of court for repeated violations of the consent decree it signed with the Food & Drug Administration in 1993 (Wolfe, 2012). In 2003, the decree was amended to ensure greater security measures. However, the Red Cross was fined $47 million due to the findings of the inspections (Wolfe, 2012). One of these fines was $9.6 million due to blood safety violations at 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 its primary functions to institutionalize its operations (Ferrell et al., 2009). Basically, there are three core initiatives for an ethical culture that should be integrated into their ethics and compliance programs: legal practices, voluntary practices, and best practices (Ferrell et al., 2009). In theory, organizations that implement these practices significantly reduce their risks and, therefore, federal laws, government regulations, and company rules are what must be followed. Historically, laws governing business practices were established to provide ground rules for responsible business activity and to protect consumer safety (Ferrell et al., 2009). Ultimately, the American Red Cross should regularly monitor and conduct self-reviews of its business transactions and activities to ensure compliance. Additionally, they could hire outside agencies to conduct the audits to ensure they are fair and impartial. Voluntary practices concern elements such as beliefs, values ​​and acts of philanthropy or the culture of the organization (Ferrell et al., 2009). Certainly, the American Red Cross could work to establish an organizational culture of trust not only by conducting independent surveys of employees' beliefs, values, and feelings toward the organization; but they could also create a culture committee that represents the change that needs to happen. Ultimately, senior management should buy in and emphasize the need for change, otherwise the program would never be implemented.