Introduction
It is apparent from the Wells Fargo Scandal that the more rules change in corporate ethics, the more they stay the same when it comes to the insatiable need of firms to generate insurmountable profits by any means necessary. The Wells Fargo incident illustrates that a company’s tarnished reputation has implications beyond the financial realm. The corporation loses its customers’ goodwill and loyalty and its employees’ dedication. As with the Wells Fargo debacle, avaricious and dishonest business leaders often overlook these negative consequences. This article critically examines the Wells Fargo crisis, focusing on the harm to the company’s reputation, top leadership’s responsibility, and whether the situation at Wells Fargo constitutes an ethical issue.
Evaluating Wells Fargo’s Attempts to Enhance Its Reputation and Recommending Future Steps
Wells Fargo has been under intense pressure to repair its reputation after discovering unethical banking practices. If an institution is involved in such moral concerns, it should undertake significant modifications to reclaim its reputation. Wells Fargo has accepted responsibility for the outpouring of criticism to begin rebuilding its reputation (CBS News, 2018). The then company’s chief executive officer, John Stumpf, stated his willingness to accept personal responsibility for the crisis that rocked one of the United States central banks and resigned. The bank let go of approximately 5,300 workers linked with the fraudulent activity (WatchMojo, 2016). These workers took part in fraudulent sales, another step the bank took to repair its reputation after being harmed. Clients whose funds were stolen or lost due to the event have been refunded. Wells Fargo’s management announced changes to the corporation’s sales practices and incentive programs. These modifications are in response to the growing controversy surrounding the corporation. Only the passage of time and fundamental measures toward cultural reform at Wells Fargo may prove essential to reestablish the corporation’s public trust.
Responsibility of Top Leaders for Client-Facing Employees’ Behavior
One of the reasons why a company’s top leadership, such as that of Wells Fargo, is so important is because the company’s top or senior executives play a critical role. A company’s senior leadership should be held accountable for the activities of its employees, especially when those people engage in unethical activity. They should ensure that the corporation works within the ethical boundaries that have been established (C-SPAN, 2017). Many large companies, including Wells Fargo, have a compliance officer or division whose duty is to guarantee that the corporation conforms with all applicable ethical and legal norms and regulations.
It is challenging to introduce a new product or service, grow the company’s client base, and boost sales revenue without the knowledge of the company’s senior leadership, such as the Chief Executive Officer. It was the state of affairs during the incident with Wells Fargo since the management claimed not to be aware of what the junior staff were doing (Warren, 2016). Since senior executives are always responsible for making decisions on behalf of the organization, it is logical to deduce that they were the ones who decided to engage in an unethical choice or practice in the first place. They should take personal responsibility for any unethical actions that are carried out, regardless of whether employees were the ones carrying them out.
Why the Wells Fargo Situation is not an Ethical Dilemma
An ethical dilemma is a scenario in which a decision should be made between accessible possibilities, yet neither of the two options gives a morally sound solution. This description simplifies the whole concept, which can be found here. The case with Wells Fargo does not constitute an ethical conundrum. The senior leadership at Wells Fargo increased the pressure placed on bank workers to fulfill their sales goals (Flitter & Cowley, 2019). It resulted in the Wells Fargo crisis since the employees and senior leadership acknowledged their actions were immoral and unlawful. They were allowed not to opt-out and followed their ethical impulses even though they knew it was wrong.
The choice to create false customer accounts was completely immoral; hence, the workers who lost their jobs because they were involved in fraudulent acts cannot claim that they were only following orders. The person who blew the whistle correctly called the choice to create false accounts into question (Pope, 2017). The employees at Wells Fargo acted this way to increase their chances of reaching their sales goal, which would have resulted in them receiving their bonuses if they had been successful. In a manner analogous to this, this was the situation with the senior executives at the organization.
Conclusion
Wells Fargo controversy provides two new perspectives on corporate ethics: brand and the implications of that reputation on the organization in the short and long term. When a brand is damaged, the organization loses customers’ loyalty, trust, and engagement. Damage to a company’s reputation extends far beyond the monetary fines that may be imposed on the liable business. The decision to create false customer accounts may have been motivated by the need to increase the company’s profit margin. However, this decision resulted in losing potential customers who could have contributed to the company’s progress and expansion.
References
C-SPAN. (2017). Sen. Warren to Wells Fargo CEO: “you should be fired.”. YouTube. Web.
CBS News. (2018). Wells Fargo whistleblower on Fraudulent Banking Practices. YouTube. Web.
Flitter, E. and Cowley, S. (2019). Wells Fargo says its culture has changed. Some employees disagree. The New York Times. Available in the Trident Online Library, ProQuest database.
Warren, E. (2016). Senator Elizabeth Warren questions Wells Fargo CEO John Stumpf at Banking Committee hearing. YouTube. Web.
WatchMojo. (2016). Wells Fargo scandal: 5 things you need to know! YouTube. Web.