The American Red Cross

The American Red Cross

Answer # 1

Business ethics includes the principles and standards that guide behavior in the world of business. The ethical behavior of a company is being judged and determined by its stakeholders. They may not always be right but their judgment affects the company's reputation in society. There are several benefits of business ethics. Ethics contribute to (Ferrell, Fraedrich, & Ferrell, 2011):

Employee commitment: Employees, who think that their future is related with that of organization's goals and objectives and to achieve this, they are ready to sacrifice their personal goals.

Investor loyalty: Ethical conduct results in shareholder loyalty and can contribute to success that supports even broader social causes and concerns.

Customer satisfaction: It is the key factor for any successful business enterprise. A business must cater customer needs through providing them the best quality, effective price and meet customers changing requirements to satisfy their needs. Customer satisfaction helps in retaining the customers and makes them loyal with the company.

Profits: It must have adequate financial performance in order to nurture and develop an ethical culture.

Because of the actions of the American Red Cross following 9/11 and Hurricane Katrina, their benefits of business effects were damage. Employee commitment wavered because of the actions of the organization. Because of the lack of monitoring some employees or volunteers were doing unethical and fraudulent things. This misconduct severally damaged the reputation of the American Red Cross. Investor loyalty was diminishing because the American Red Cross was not following their own bylaws and was mismanaging funds donated to the organization. Customer satisfaction was low because of the actions of the American Red Cross following these disasters. Profits could significantly affected by the actions of an organization. The American Red Cross relies heavily on donations. If the public does not feel the American Red Cross is using the funds in a way they supposed to they will stop donating.

Answer # 2

The degree to which a firm understands and addresses stakeholder demands is known as stakeholder orientation (Ferrell, Fraedrich, & Ferrell, 2011). Stakeholders are clients, financiers and shareholders, employees, government agencies, suppliers, communities, and many others who have a 'stake' or claim in some aspect of a company's operations, products, markets, industries, and outcomes” (Ferrell, Fraedrich, & Ferrell, 2011). There were many concerns regarding the American Red Cross in the scenario. The goal of the American Red Cross is to bring aid to victims of a disaster. The attacks on New York City's World Trade Center and Hurricane Katrina were major events the effected the United States. The American Red Cross came under heavy scrutinizing due to how they handled these events.

With the World Trade Center, the American Red Cross was criticized for their slow response time. “The Virginia-based command center known as the Disaster Operations Center (DOC) had, for more than a day afterward, failed to activate the specialized teams normally sent out after a plane crash or similar disasters” (Ferrell, Fraedrich, & Ferrell, ...