Disaster Nursing and Emergency Preparedness: Red Cross

American Red Cross (ARC)

The impact of this event on ARC's "benefits of business ethics"

Hurricane Katrina and the September 11 disasters had an adverse effect on the benefits of business ethics of ARC. The absence of commitment and unsuitable conduct by the workers and volunteers damaged the company's reputation. The workers and volunteers were alleged of unethical tendencies such as taking funds, lying and stealing other contributions intended for relief initiatives. For instance, Catalina Escoto escaped with over one million U.S. dollars that belonged to Red Cross funds. She spent this money in gambling shopping for gifts and she awarded herself $75,000 as bonus. There was missing the dedication on the part of workers and volunteers to the regulations and policies institutionalized to regulate the running of the company. This was because of American Red Cross inability to integrate any ethical laws for its workers and volunteers in its Ethics Policies and rules (Veenema, 2007). These policies and rules not only ignored employees' moral training but also failed to demand conformity to the specified doctrines. In the lack of the above, it is obvious that workers will require dedication to the organization's activities.

Besides employee commitment, customer satisfaction was severely damaged. During the events, the victims and their families were the customers of ARC, who either required donations or bought the basic needs of life. Even with the expanded system in the involved area, ARC noticed that it lacked skilled and qualified volunteers to deal with logistic matters. The routine catastrophe management was pressured when it experienced the scale of Hurricane Katrina. Due to the recruitment of inexperienced volunteers who were having first-time experience, few customer care reviews recommended that volunteers complain about being assigned with tasks they had not done previously. In addition, many volunteers patiently waited for various weeks before they were assigned any task (Liebsch & Liebsch, 2006).

At the time of the events, donors were ARC's investors. The mismanagement of contributions hurt the commitment of investors towards the company. After the 9/11 2001 terror attack, ARC collected thousand units of blood that were rarely used. Just after 48 hours of the catastrophe, ARC collected 400,000 units of blood but because of the frequent death of victims, the excess amount was destroyed (Veenema, 2007). Despite talking about situation to the then President Bush's government and the U.S. Food and Drug Administration, ARC failed to inform its blood contributors. The donors needed a guarantee from one of the earliest national non-profit company, for their participation in terms of blood and money. This situation caused a loss of investors' commitment towards ARC, and they required a fair distribution of funds they contributed for the victims of 9/11 catastrophes. The part of the stakeholders' attention in any company is to form the organizations' goals and objectives in such a way that their passions are met. However, ARC tried to protect the use of cash for other needs but public pressure forced them to channel all money to the victims and their families.

The role that ARC's stakeholder orientation played in this scenario

Stakeholder orientation refers to the level at which a company understands and fulfills stakeholder demands. Stakeholders comprise of shareholders, customers, employees, investors, suppliers communities and government agencies. In the scenario of ARC, there are many concerns. The organization's mission is to bring aid to disaster victims. Hurricane Katrina and the World Trade Center attack were significant events that affected the U.S. The ARC was seriously criticized because of how they handled these occasions.

In the Hurricane Katrina case, the reputation of ARC was likewise demolished. The public considered the organization's relief efforts as inadequate. There was a communication lapse between ARC and FEMA and a disagreement about the roles and responsibilities of the two agencies. Mismanagement of volunteers and funds is also another concern. Arc has been scrutinized for failing to abide by the procedures of tracking and distributing aid, diversion of relief aid and using felons as volunteers in the events against the rules of Red Cross. The number of volunteers was bigger than ever seen, and the devastation was overwhelming. Money and valuable items disappeared, and volunteers complained of improper behavior by staff.

Looking at the World Trade Center event, the organization was accused of slow response. Even after one day after the event, ARC's disaster operations department failed to activate the special team usually dispatched after similar disasters. Adding to this slow response to the disaster, ARC was also accused of mismanaging monetary donations. A different account was established for victims and families. In less than two months, approximately $550 million had been collected in pledges (Liebsch & Liebsch, 2006). However, only a third of this figure was distributed to the aid efforts. The organization used half of the funds for their reasons even though these funds were collected specifically for this disaster. The donors and government officials did not approve this act. As a result, a congressional hearing was arranged to investigate these actions. The organization was compelled to adders their stakeholder needs and concerns. The reputation of ARC was damaged because of their actions after this disaster. The two scenarios evidence how the organization failed to deliver the requirements of the stakeholders. It must embrace steps to enhance its disaster response efforts.

Ways in which ARC's corporate governance failed to provide formalized responsibility

The corporate governance of ARC failed in the provision of formalized responsibilities to the relevant agencies in various ways. First, they practiced embezzlement and mismanagement of donor funds. Second, the during Hurricane Katrina and the September 11th disasters, they failed to coordinate the numerous life-saving functions leading to prolonged suffering of the victims. Finally, the procedures used to recruit volunteers were not followed during the relief efforts. This paved way for criminal elements to gain access to the funds.