American Red Cross

[Name of the Instructor]

The American Red Cross (ARC)

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

Employee Commitment

American Red Cross provides most of its services through volunteers. Some of them work for it for a long time and most of the volunteers are registered during any disaster. American Red Cross was accused of mismanaging those volunteers and staff during one of the biggest emergency natural disasters the organization faced. The organization sent more than 235,000 volunteers to the disaster areas (Rhode & Packel 2009). The registration process was poorly managed, as there was no reliable system to check the background of volunteers. This situation increased the chances of fraud during relief work. Disappearance of donated relief items was reported on the mass level including mattresses, generators and rental cars. Prepared meals were swapped while other volunteers observed unofficial use of organization's computers. Call centre for relief provision was also not safe from this mishap (Epstein, n.d).

Investor loyalty

At the time of disasters, donors were the investors for American Red Cross. The mismanagement of donations hurt the loyalty of investors towards the organization. After terrorist attacks on 9/11 2001, ARC collected thousand units of blood which went unused (Epstein, n.d). Just after 48 hours of the disaster, ARC collected 400,000 blood units but due to the frequent death of victims, excess amount was destroyed. Despite discussing situation to Bush administration and the U.S Food and Drug Administration, American Red Cross did not inform gave a later date to its blood donors (Dede 2007).

For the very first time donors needed a reassurance from one of the oldest national non-profit organization, for their contribution in terms of money and blood. This scenario caused a loss of investors' loyalty towards American Red Cross and they demanded a fair distribution of funds they donated for the victims of 9/11 disaster. However, ARC tried to defend the use of money for other needs of organization but public pressure forced them to announce that all money will go the victims and their families (Rhode & Packel 2009).

Customer Satisfaction

Along with employee commitment and investors loyalty, severe damages were caused to customer satisfaction. During 9/11 and Hurricane Katrina in 2005 the victims and their families were the customers of American Red Cross who either needed donations or had to buy the basic needs of life. Despite of stretched system across the affected area, American Red Cross realized that it lacked qualified and skilled volunteers to deal with logistic matters. The routine disaster management was stressed when it faced the magnitude of Hurricane Katrina.

Due to the registration of unskilled volunteers who were having first time experience few customer satisfaction surveys suggested that volunteers complained about not assigned with the tasks they were accustomed of. On the other hand, many volunteers waited for weeks before they could get any assignment (American Red Cross 2006).

American Red Cross was unable to provide shelter database to victims and their ...