Business Ethics In Wells Fargo

Consumers place great trust in the financial institution that they use to store their assets. Banks are expected to be protective, responsible, and professional when dealing with client’s money. However in 2016, Wells Fargo received extensive scrutiny when it was discovered that employees had fraudulently opened more than 2 million bank accounts and credits under their clients’ names without permission for four years. Employees claimed that they were required to meet certain quotas for the company to maintain their job security. Wells Fargo violated many key tenants of business ethics by sacrificing their image, their clients’ trust, and morals to stay competitive in the banking sector in the United States. By definition, business

Since it wasn’t against the law to have this clause in contracts, Wells Fargo firmly believed in the ethical egoism theory, because they illegally collected fees on false accounts to ensure that the high-ranking officers were able maximize their salary and increase the company’s revenue. The company believed that since no one noticed or was directly harmed by these acts, they were justified in continuing to open accounts. The arbitration clause kept much of the public in the dark about Wells Fargo’s practices. These practices showed Wells Fargo acting in its own self-interest given the souring economy and growing demands of consumers. When Wells Fargo first began this scam in 2011, the economy was in a crippling recession, and Wells Fargo felt the obligation to show shareholders and potential clients that it was still growing at a considerable rate. In addition, shareholders put more pressure on Wells Fargo by cashing in banking shares for stocks that were skyrocketing in value. While other banking companies were trying new ways to extract money by raising fees on new credit cards, Wells Fargo engaged in moral relativism. Since the recession worsened the economic integrity of banks, instead of following other companies,

Wells Fargo’s tarnished reputation is going to have serious repercussions on how it can do business in the future. Its damaged image has manifested in lower stock valuations and negative backlash from clients. This ethical crisis could’ve been solved using Blanchard and Peale Three-Part Test, which would evaluate if the endeavor was legal, impartial, and the impact it would have on the company. The Three-Part Test asks the decisionmaker of their personal morals and their empathy towards others’ lives. Also, the Front-Page-of-the-Newspaper Test helps to visualize the impending reception that the public would react to a decision. A headline that is ethical and impartial would draw positive attention to a company, while a negative headline would result in severe criticism and long-lasting consequences for a company. The Laura Nash Model would address the issue from different perspectives to get the whole picture. That way, it is possible to see who the decision is going to effect, and prevent a similar decision from being made. It is likely Wells Fargo didn’t consider who they were going to affect. However, if they had considered resolving their issues before they began, they could’ve avoided damaging their