Wells Fargogo Case Study

Wells Fargo has recently been in the spotlight recently for unethical behavior of employees, as well as socially irresponsible behavior at the corporate level. It was recently disclosed that Wells Fargo employees opened up millions of fraudulent accounts, both for banking and credit cards, in the names of unsuspecting customers (Bryan, 2016a). These accounts were opened without explicit consent of the customers involved so that sales goals could be met. Sales goals were attached to incentives for employees, so motivation was provided to employees that had the means to commit these fraudulent actions. Soon after these revelations came to the public’s attention, it was also discovered that Wells Fargo was violating laws and regulations regarding …show more content…
Corporate social responsibility is related to the actions organizations take that benefit the organization and its shareholders, as well as society in general. Individual managerial ethics is concerned with individual behavior rather than corporate behavior. The recent situation involving Wells Fargo would appear to be an ethical problem perpetrated by the individuals who chose to participate in these fraudulent activities. It would be difficult to justify the fraudulent activity utilizing the most commonly used ethical perspectives. The utilitarian view on ethics is typically concerns with outcomes and consequences (Parnell, 2014). Massive fines, employees being fined, and customers being defrauded are all negative outcomes. The only positive outcome would have been the temporary incentive, but that would likely not outweigh the loss of the job that followed the incentive. The self-interest short-term view may be a way in which to justify the actions ethically. However, the long term view is clearly negative in this case. The individual rights, justice, integrative social contracts, and religious views of ethics would all fairly clearly classify Wells Fargo’s employees’ behavior as unethical. According to Parnell (2014), an organization cannot of itself be ethical. However, an organization can promote ethical conduct from employees by having …show more content…
Parnell (2014) recommends that leadership take on the role of displaying ethical standards through their own work roles. Providing accountability for employees that violate organizational standards of ethics in the future may also be useful in this case as Wells Fargo attempts to rectify its culture. In the case of Wells Fargo’s recent behaviors, it would likely benefit the organization to have better safeguards against this type of activity. Oversight of departments where risks of these types of events occurring may be helpful. Wells Fargo has already stopped the practice of incentives based on sales goals (Crowley, 2016). However, in addition, they should make sure that other policies don’t exist within other areas of their organization that could cause similar issues in the future. As Parnell (2014) mentions, it is often in the best interest of organizations to display socially responsible behavior due to the risk of harmful legislation and regulations occurring when issues occur that demonstrate socially irresponsible behavior. With issues like these occurring, Wells Fargo can likely look forward to increased regulatory scrutiny, at least in the short term. Complying fully with corrective measures and regulatory guidelines would clearly be the best course of action to avoid further fees and