What effect does organizational structure and compensation have on ethical behavior among chief executives at ARC?
The American Red Cross (ARC) is an independent organization, supported by public financial donations and volunteerism. Its mission is to “provide relief to victims of disasters and help people prevent, prepare for and respond to emergencies.” The ARC responds to more than 70,000 disasters annually. However, the ways in which it handled 9/11 in 2001 and Hurricane Katrina in 2005 were widely criticized as being inadequate and poorly managed. The ARC has had to address allegations of fraud, bribery, and even theft on the part of volunteers and employees working for the organization. The ARC also has faced a number of internal challenges due to high turnover, as well as charges of overcompensation and possible corruption among its board of directors and upper management.