Wells Fargo Ethical Summary

During my courses, I frequently remind students that most corporate executives, accountants, and auditors are honest and ethical. This case provides a stark and powerful example of one such individual. When I discuss a case such as this in my courses, I try to provide other examples of positive role models among corporate executives. Granted, most of these examples do not involve accounting or auditing matters, but, nevertheless, they help to blunt the impression that students may receive from studying my cases that most corporate executives are “crooks.”

There are lots of Unethical Actions that occur in a company. In September 2016, Wells Fargo was involved in a scandal that involved over 5,000 employees had made fake accounts and were eventually fired. There are 269,100 employees in the Wells Fargo organization, 2%, which is 5,300employees of the organization were let go. The Wells Fargo scandal had started in January of 2009 to September of 2016 and more fake accounts are still being made by Wells Fargo. There was so many employees involved in this scandal, therefore making it really bad for the company Wells Fargo. One of the reasons why the employees were fired from the scandal was because the people were feeling pressured to meet hard to reach performance goals. As the employees felt more anxiety, their ethical behavior became

The author Robert Solomon argues that ethics has to an integral part with regard to business management. He does not believe that business management must include unethical or illegal methods to be able to succeed. Solomon preaches that business management is not as simple as obtaining revenue. “Businesses need to abide by fair policies and their owners have to be ethical in dealing with their customers” (Shaw p. 37). The author acknowledges that while illegal practices in business management could bring positive results at first, eventually the business is bound to fail. This is why Solomon recommended eight important policies that can help businesses in integrating ethics into their operations.

The employees need to be educated on the ethics in business and the importance of complying with the ethical codes of the company. The employees need to be made to understand the importance of ethics in business and the values ethics adds in the business. Occasionally, ethics is a key to business success and it is paramount that the employees understand and appreciate the fact. The employees need to know the upholding business ethics is necessary to assure the stakeholders of the future of the business and that they can continue investing their time and money in the business. If the employees at Wells Fargo were educated on the importance of ethics and the roles ethics plays in the business, the case of the scandal could not have been witnessed.

The Sarbanes-Oxley Act of 2002 was put in place to prevent corporations from committing accounting fraud or corruption. When a corporation manages somehow to get passed all the laws they do anything to keep the corruption going by covering up everything. With this going on the company’s main focus is keep the lies going and firing whoever is in the way. Wells Fargo has stated that they have fire over a hundred thousand people throughout the nation for being a part of the illegal activity in the company. Unfortunately for Wells Fargo employees are coming out from hiding telling their side of the story.

Is regulation really doing its job efficiently? Is it an accomplice and involved in such kind of malpractices? I feel that there are a possibility and a fragment of truth to such allegations. It is implausible that Wells Fargo had mastered the art of manipulating the system without regulators getting a hint about it. No deception plan can be a full-proof plan if there are people involved in it.

(1)Most adults can certainly agree that they hate bank fees. Even worse than paying bank fees, is paying a fee on a ghost account you did not know existed. Wells Fargo is a successful American International Financial Institution, but in recent years have been involved in a scandal that has hurt their reputation.

Wells Fargo Corporate Social Responsibility initiates of diversity and inclusion, economic empowerment, and corporate sustainability have contributed to social change in many ways that worthy of highlighting in this paper. However, I have selected to feature the following organizational activities related three social change and sustainability causes: (1) developing advanced clean technology, innovation and environmental solutions, (2) increase financial literacy and self-sufficiency, and (3) and advancing the need for diverse and inclusive businesses and leadership.

A proliferation of headlines abounds regarding leaders and questionable ethical behavior. Examples in both public and private sector are easy to find. In business, one can look at the Wells Fargo scandal where employees fraudulently opened customer accounts to achieve management sales quotas and the case of Mylan Pharmaceuticals price gouging of the EpiPen as examples of unethical behavior. A quick open of the New York Times and you can read editorials on the Trump Administration and his use of the White House for personal gain, disregard for the anti-nepotism law and questionable associations and political appointments of persons such as Scott Gottlieb, Carl Ichan, and Steve Bannon. Governor Robert Bently of Alabama is currently being investigated

Comparing the Wells Fargo written policy to their actions shows a total disconnect. Quite possibly, their “shop mentality” or decentralized culture, played a part in a less ethical culture (The Economist, 2017). However, since leaders are integral in the formation of an ethical culture, it seems that upper management either did not communicate as well as they should have, or were complicit in the irregularities. Interesting though, is that Warren Buffet’s company, is the largest shareholder, again proving that it is necessary to develop and then monitor an ethics based program (CNN Wire, 2016).

Unethical behaviors within organizations exploit workers, customers and the public in certain situations. There are unethical behaviors that could be legal or illegal in some cases (Ferrell, Hirt, & Ferrell, 20019). Wells Fargo Bank banking foundation is built off retail deposits which in turn has helped the organization recuperate from credit crisis and become a stronger nationwide presence. The company also relies on its cross- selling ability to its customers as a way to become more profitable.

It is only during moral lapses and corporate scandals that interest groups and the broader public ask themselves the fundamental ethical questions, who are the managers of the organization and were they acting with the ethical guidelines. For a long time, the issue of ethics was largely ignored, with organizations focusing on profit maximization. However, this has changed, and much attention is now focused on ethics management by researchers and leaders. The issue of ethics has arisen at a time when public trust on corporate governance is low, and the legitimacy of leadership is being questioned. Leaders are expected to be the source of moral development and ethical guidance to their employees.

Today’s business world presents numerous ethical issues. In today’s world above board/moral ethics in organizations do not often materialize intuitively. Organization must strive to provide employees with a clear understanding of the overall company vision. This will aid employees in practicing the code of ethics, policies and procedures in the workplace. Companies must be unwavering in continuously delivering the uppermost ethics of provision in which customers, applicants and employees are entitled to under fair business practices. One major core value is to uphold responsible and fair business practices.

Every organization also has a profession responsibility to conduct business honestly and ethically. Our readings reported, “Experts estimated that U.S. companies lose about $600 billion a year from unethical and criminal behavior” Kinicki and Kreitner (2009). The organization could avoid having ethical issues by meeting the

The overwhelming facts point to a shady underworld of self-dealing and opportunistic exploitation of the poor and working class, which was until recently, well hidden from the commoner. The executives of WorldCom and Enron provide real world examples of unethical business practices, where the desire to make money for their shareholders transcended into an addiction to greed and self-dealing that were displayed by their, “excessive pay, perks, and golden parachutes”(Carson 392) at the expense of all stakeholders. All is not lost, there are corporations that pride themselves in their sound business model and commitment to ethical business practices. Such companies as Eaton Corporation, and Weyerhaeuser, who according to Ethisphere.com, a business ethics watchdog, are among the “2010 World`s most ethical companies.” (Ethisphere)