The company needs to have a good moral compass and make sure that all employees do as well. Retrieved February 8, 2020, from https://money.cnn.com/2016/10/24/investing/wells-fargo-fake-accounts-angry-customers/index.html, Egan, M. (2018, July 13). “Axios and the Harris Poll released a ranking of the 100 most visible companies in America by their reputations. 5 OUR CODE OF ETHICS AND BUSINESS CONDUCT People As team members and representatives of Wells Fargo, we always value and support one another. this essay is not unique. The choices made were companywide in order for all who participated to benefit. The bank admitted that … It is also a brand that has faced many ethical and legal issues. Retrieved February 8, 2020, from https://www.forbes.com/sites/samanthatodd/2019/09/27/new-ceo-at-wells-fargo-faces-a-heavy-lift/#228a57a27431financial-crisis-fine-mortgage-backed-security/, Walsh, B. More so, when Wells Fargo executives discovered that there was an issue with fake accounts they needed to stop the program, announce the issue, and resolve before it got worse. Here is what happened. In addition, “just over half of non-Wells Fargo customers surveyed said they were unlikely to join the bank, compared with 22 percent previously” (Egan, 2016). • We treat one another with fairness and dignity; we do not tolerate dis crimination, harassment, or intimidation. On September 8, 2016 they finally fined the bank $185 million US. Social Business, 4(3), 245–253. Today, we see ethical failings repeatedly in corporate America despite the talk of the importance of ethics. Wells Fargo has a fiduciary duty to treat its customers fairly. The bank reported 24.3 million customers who actively use their checking accounts. We can custom edit this essay into an original, 100% plagiarism free essay. Piazza & Jourdan (2018) recognized that without publicity, an organizations misconduct may or may not alter organizational membership, meaning that if not caught, employees would stay to reap the benefits to their paychecks. It would have been a good decision for then CEO John Stumpf to have stepped down right away (Walsh, 2019). Retrieved February 8, 2020, from https://www.wellsfargo.com/about/corporate/governance/scharf/, Corkery, M. (2017, January 13). The entire account opening scandal of Wells Fargo was systemic in the sense that it was companywide, and not caused by one individual. Such corporate scandals raise issues associated with ethics, as well as outcomes of unethical practices. How this came about begins with: Wells Fargo company … Retrieved February 3, 2018, from https://www.latimes.com/business/la-fi-wells-fargo-ad-campaign-20180509-story.html, Shen, L. (2018, August 1). Wells Fargo was regarded for years as one of America’s best banks. You can order Unique paper and our professionals Rewrite it for you. Wells Fargo fired the Pomona, California branch manager for using the very protections the government put in place to protect Americans from this egregious behavior: the Wells Fargo’s Whistleblower Hotline. Wells Fargo lost so much public trust for the bank’s shady business practices, which came to light in the aftermath of the Great Recession, that it … On September 8, 2016, Wells Fargo, one of the nation’s oldest and largest banks, admitted in a settlement with regulators that it had created as many as two million accounts for customers without their permission. The virtue theory is made up of four characteristics. Wells Fargo & Co. is a financial services company and the “fourth largest bank in the United States by assets” (Dixon, 2020). That’s … The company used its financial strength to purchase Wachovia during the height of the financial crisis—forming what is now the third largest bank in the country by assets—and emerged from the ensuing recession largely unscathed, with operating and stock price performance among the top of its peer group (Exhibit 1). Did you catch that? The loss of honesty for a personal incentive had an effect on the corporation as a whole. Retrieved February 8, 2020, from https://money.cnn.com/2018/07/13/news/companies/wells-fargo-earnings-stock/index.html, Kouchaki, M. (2016, September 15). Wells Fargo employees were wrong for lying, creating and opening false accounts as well as hiding the fact that they were doing so in order to receive an incentive. Wells Fargo’s reputation is tanking, survey finds. The knowledge and distribution of incentives to employees for cross-selling services and accounts began the largest issue of Wells Fargo’s scandal. Despite a mission statement and vision indicating that they are a “trusted provider”, Wells Fargo has had years of scandal. The most evident ethical issue with the 2008/2009 Wells Fargo scandal was the loss or misuse of trust, which resulted in the loss of integrity of Wells Fargo employees. The ethical issue, as reported by San Francisco Business Times, consisted in the dismissal of thirty workers of Wells Fargo because of the above mentioned fictitious new accounts. The ultimate implication of all of this is that the scandals have hurt Wells Fargo’s bottom line and reputation. There is need to ensure that there is an ethical culture that keeps a tab on the business ethics practiced by the organization globally. Having been on the inside, this didn’t help establish trust and the sense of fresh beginnings (Walsh, 2019). Wells Fargo, in its formal ethics program, did train employees to avoid unethical behavior, and counseled them to call the company’s ethics hotline if they suspected anyone was behaving unethically. (2019, March 30). How a business responds and resolves the issue can turn into detrimental to the bottom line of success and development. After the scandal, negative perceptions rose to 52 percent” (Egan, 2016). The 15 Largest Banks In America. Are you interested in getting a customized paper? Change ), https://doi-org.ezproxy.snhu.edu/10.1362/204440814X14103454934258, https://www.wellsfargo.com/about/corporate/governance/scharf/, https://www.nytimes.com/2017/01/13/business/dealbook/wells-fargo-earnings-report.html, https://www.journalnow.com/business/wells-fargo-gets-poor-reputation-ranking-to-start/article_85d087d0-6bf7-5fbc-87e0-a4577ed0d11e.html, https://www.bankrate.com/banking/biggest-banks-in-america/, https://money.cnn.com/2016/10/24/investing/wells-fargo-fake-accounts-angry-customers/index.html, https://money.cnn.com/2018/07/13/news/companies/wells-fargo-earnings-stock/index.html, https://fortune.com/2016/09/15/wells-fargo-scandal/, https://www.qualitymag.com/ext/resources/files/white_papers/BuildingaCultureofCompliance-IBS.pdf, https://www.latimes.com/business/la-fi-wells-fargo-ad-campaign-20180509-story.html, https://fortune.com/2018/08/01/wells-fargo-, https://www.forbes.com/sites/samanthatodd/2019/09/27/new-ceo-at-wells-fargo-faces-a-heavy-lift/#228a57a27431financial-crisis-fine-mortgage-backed-security/, https://www.barrons.com/articles/wells-fargo-makes-a-clean-break-51553908012. And Wells Fargo was trying to run an ethical business, despite its huge blunder. We’ve got you covered. It soon came to light that the pressure on employees to hit sales quotas was immense: hourly tracking, pressure from supervisors to engage in unethical behavior, and a compensation system based heavily on bonuses. This could have shown the establishment of a culture of compliance within the organization – attributes that are “established by top management, characterized by senior management example, embedded in activities such as education, reinforced by incentive systems, given force through the treatment of transgressors, integral to information systems and their use and management, and inseparable from the organization’s structure, processes, and management style”(LeGrand, 2005). He had been working at the bank for more than two and a half decades (Walsh, 2019). Piazza & Jourdan (2018) recognized that when a member of an organization are tied to it, and have to deal with the consequences, the less they are to react to a scandal. Retrieved February 8, 2020, from https://www.journalnow.com/business/wells-fargo-gets-poor-reputation-ranking-to-start/article_85d087d0-6bf7-5fbc-87e0-a4577ed0d11e.html, Dixon, A. This was the case for Wells Fargo Bank, the growth of the company led to added pressure on employees and less emphasis on company honesty. Fill in your details below or click an icon to log in: You are commenting using your WordPress.com account. Wells Fargo Scandal: Ethical Issues And Possible Prevention Measures In today’s society the scandals that hit huge corporations are found and discussed speedily due to the use of the media. The first indication of rampant unethical practices at Wells Fargo emerged from a 2013 report by the Los Angeles Times. 2021 © gradesfixer.com. ( Log Out / How a company responds and resolves the issue can become detrimental to the bottom line of success and growth. Despite a mission statement and vision indicating that they are a “trusted provider”, Wells Fargo has had years of scandal. Many employees did speak up, and the company retaliated, firing … Wells Fargo Ethical Issues Lead to Class Action Suit November 13, 2017 by Beck Law P.C. Change ), You are commenting using your Google account. It is also a brand that has faced many ethical and legal issues. "The only thing that is constant is change.". Wells Fargo & Co. “deceived the Federal Housing Administration into insuring risky mortgages that were ineligible for federal support between 2001 and 2008” (Shen, 2018). If you’d like this or any other sample, we’ll happily email it to you. GradesFixer. As penalty, “they agreed to pay $2.09 billion for actions that allegedly contributed to the 2008 Financial Crisis” (Shen, 2018), and a $1.2 billion fine paid in April 2016” (Shen, 2018). https://doi-org.ezproxy.snhu.edu/10.1362/204440814X14103454934258, Charles W. Scharf. Blythe, J. Pssst… we can write an original essay just for you. In analyzing the Wells Fargo fake account scandal from the ethical theory of Kantianism, this case is most certainly ethically impermissible. The bank offered many different services to its customers. Carberry, E. J., Engelen, P., & Van Essen, M. (2018) found that the costs of misconduct by corporations begins with the cost of replacing employees and can lead to reputation penalties, which can be rooted to the decline of a corporations stock price and loss of stakeholders. ( Log Out / Once Stumpf did ultimately step down, Chief Operating Officer Tim Sloan took over. Retrieved February 3, 2020, from https://fortune.com/2018/08/01/wells-fargo-, Todd, S. (2019, September 27). Still, in 2020, Wells Fargo has “considerable work to do in rehabilitating its reputation with federal lawmakers and consumers” (Craver, 2019). In today’s society the scandals that hit large corporations are discovered and discussed quickly due to the use of the media. Retrieved February 8, 2020, from https://www.nytimes.com/2017/01/13/business/dealbook/wells-fargo-earnings-report.html, Craver, R. (2019, December 26). Approximately half of the people (or at least those surveyed) believe that business is unethi… You can get 100% plagiarism FREE essay in 30sec, Sorry, we cannot unicalize this essay. “In 2016, a survey was done of 1500 bank customers. The damage to its reputation is staggering and the ability of the bank to recover will depend on a sustained commitment to ethics and compliance and careful management of its business practices. Those “free” accounts promised by employees to customers were actually premium accounts, Wells Fargo premium accounts are associated to large fees. Incorrect decision making issues chosen and followed through by employees and not the consumers lead to lowered reputation and moral of Wells Fargo. By clicking “Send”, you agree to our Terms of service and Privacy statement. Results showed that before the scandals, negative perceptions were 15 percent. Students who find writing to be a difficult task. A Brief Wells Fargo 's Fraudulent Accounts Issue 1202 Words | 5 Pages.
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