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What Are The Wells Fargo Ethical Challenges

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Learning Journal Unit 8: Managing Ethics University of the People BUS 3306 - Business and SocietyDr. Firdous Ahmad Maliki, Instructor August 10, 2023 Analysis of Wells Fargo's Ethical Challenges and Solutions Introduction Ethics play an important role in running a business, ensuring its long-term success, reputation, and stakeholder relationships. The Wells Fargo case study highlights the importance of ethics in business operations and examines the values demonstrated by former CEO John Stumpf, the impact they had on the company's culture, and why inadequacies in existing systems did not prevent unethical behavior. Issue 1: The Values Mr. Stumpf Demonstrated and Their Impact The aggressive sales goals and cross-selling emphasized by then-CEO John …show more content…

Stumpf's approach had a negative impact on Wells Fargo's organizational culture. The aggressive sales-centric culture eroded trust between employees and management and fostered an environment where ethical concerns overwhelmed performance metrics. Management placed its own position security above ethical considerations. And employees continued to make inappropriate sales under pressure from senior executives. They were even fired for reporting things that were unethical (Santa Clara University, 2017a). In the face of such cultural pressures, employees may be hesitant to raise ethical issues for fear of retaliation. Leadership and environmental arrangements to encourage ethical behavior -To foster ethical behavior within an organization, leaders must constantly demonstrate ethical behavior in their actions and decisions. Leaders should encourage a culture shift that prioritizes ethical values over performance indicators. - Promote awareness and understanding of the importance of ethics, values, and the potential impact of ethical behavior through transparent communication and regular learning sessions. - Reinforce employees' commitment to the organization's ethical behavior with appropriate

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In the article Wells Fargo’s Reaction to Scandal Fails to Satisfy Angry Lawmakers it mentions how lower-level employees were mainly affected by this unethical behavior and that more than 5,300 employees had been fired due to the unethical practice. Some employees were fired that did not participate in the unethical practice during the scandal were affected as well as a result of not being able to attain the sale goals. Stated in the article, How The Wells Fargo Phony Account Scandal Sunk John Stumpf, “Two former employees filed a $2.6 billion class action suit, alleging branch workers were unfairly fired when they could not meet Wells' aggressive sales quotas.” Customers also suffered because they trusted this bank and its employees to do their job right and they were taken advantage of.

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Wells Fargo Unethical News Wells Fargo was founded in 1852 and are widely known and is one of the banks with the most branches nationwide I think it would be safe to assume that they should be one of the most trusted as well, but unfortunately that is not the case after the huge scandal they have recently faced. In recent news Wells Fargo is facing a huge scandal after confirmation of unethical practices since 2011Wells Fargo employees have secretly opened millions of unauthorized bank and credit card accounts without customers knowing it these unauthorized accounts were made in order to hit sales targets and receive bonuses says Richard Cordray, director of the CFPB. (Egan).

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These channels offer the ability for Wells Fargo to distribute information about their ethical standards to all customers of the bank. Communicating this decision to investors can be impactful through annual reports, presentations, and shareholder meetings. This guarantees that Wells Fargo’s investors will be informed about the decision that has been made in hopes of increasing Wells Fargo’s ethical perception. Another strategy could be to provide data and analytics on the effectiveness of detecting unethical behavior within the bank, to show that the decision is indeed

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To begin, The Wells Fargo cross-selling scandal arose from the opening of millions of fake savings and checking accounts on behalf of Wells Fargo customers without their permission. The deception became widely known in late 2016 when the corporation was penalized a total of US$185 million by different regulatory organizations, including the Consumer Financial Protection Bureau (CFPB). Additional civil and criminal proceedings are expected to cost the corporation $2.7 billion by the end of 2018. The establishment of these bogus accounts is still having legal, financial, and reputational consequences for Wells Fargo and former bank officials as late as November 2022 (Wikipedia contributors, 2023). Importance of Ethics in Managing Business

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Under the stewardship of Stumpf, Wells Fargo's laser focus on financial achievements, embodied by the push to increase the number of products per customer, inadvertently promoted a culture where ethical considerations were sidelined (Skeet, 2017). This culture of ethical neglect was manifested in the creation of over 2 million unauthorized customer accounts, a direct fallout of the undue pressure on employees to meet unrealistic sales targets (Fox, 2016, p. 10). Such practices underscore the necessity for leaders to embody and promote ethical behavior, demonstrating that ethical leadership is not merely about setting ethical standards but living by them. Ethical leaders serve as paragons, shaping the moral compass of their organizations and guiding employee behavior through the exemplification of ethical values (ELAlfy & Weber, 2019, p.

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Title: Analysis of the Wells Fargo Banking Scandal: Importance of Ethics in Business Management and Designing Ethical Systems Introduction: The Wells Fargo banking scandal highlighted significant ethical issues within the organization, leading to severe consequences for the company's reputation and stakeholders. This case study analysis explores the importance of ethics in managing business, the values modeled by former CEO John Stumpf and their impact on Wells Fargo's culture, and the shortcomings of the existing systems to address unethical behavior. Additionally, the paper discusses the steps leaders can take to design systems that promote ethical behavior within organizations. Body: Importance of Ethics in Managing Business: Ethics

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The cross-selling strategy at Wells Fargo created an environment for their employees, which was obviously too aggressive and which led to employees unethical behavior. Furthermore, this strategy put employee’s jobs and life’s in jeopardy for the unethical decision to make their sales quotas, because it did not matter how they will do it as long as they meet their

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Ch. 12 Behavior Analyst’s Ethical Responsibility to Colleagues (Code 7.0) 1. What are some ways that you can “promote an ethical culture” where you work? Behavior analysts can manipulate the environment within the workplace which can evoke ethical behavior in others and can generate or maintain a culture of ethics.

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The implementation and education of the ethical decision-making model promote moral awareness and company values that can mitigate ethical dilemmas to an extent. The aftermath was devastating for Wells Fargo not just economically but for its image. The corporation can introduce this model in training courses for new hires and current employees. Also ensuring management comprehends the prominence of ethical decisions and are aware that they are the wheels of the car, therefore, lead by example. If the corporation initially had prioritized ethical values and decision-making evaluations at every level of the business, this scandal could have been prevented at least its magnitude.

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If I were the CEO of Wal-Mart, I will ensure high ethical employee behaviour. Every level of management and non-management employees must fully understand the ethical implications of their decisions as it relates to their personal and professional values. Corporations need to implement a Business Code of Ethics and review with all employees. Also, an excellent tool for learning is case studies and role-playing. The key in this learning is to make the Code accessible and position it as a helpful tool for all employees.

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Under this approach, an action is considered morally bad because of some characteristic of the action itself, not just because the product of the action is bad. Wells Fargo unethical practices demonstrates unethical behavior, under deontological ethical theories as its employees duty to operate in an honest and fair fashion , in providing services to the public. Wells Fargo codes of conduct does not permit sales practices of these sort, therefore the employees who participated in these practices made unethical decisions. Unfortunately there was a wrong-doing on a massive scale. The acts of unethical behavior were conducted by both the employees and management.

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Section 1: Introduction and situational analysis: In the world of business ethics, there are certain examples and scenarios that have become a commonplace for teaching aids. In the case of Enron and its eventual downfall from a perceived highly ethical and successful company. Enron was once ranked the sixth largest energy company in the world. At the height of its success, Enron seemed to be an outstanding corporate citizen, with all the social wellbeing and business ethics tools and status symbols in place (Brinkman, 2003, p. 244). However, due to a deep culture of rewarding clever strategies to bend, break laws and codes, the company eventually collapsed and filed for bankruptcy.

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As a common solution, companies should concentrate more on issues of ethical culture during the orientation of new employees, which should mitigate their feeling of not knowing much about how to act within the culture of their

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Ethics and integrity is essential and played an important role in helping the growth of the business. Behave ethically could contribute to good performance and customers’ satisfaction. This lead maintains and expands the relationship between both parties and indirectly would increase company reputation (Bandsuch, M 2009). According to the Trevino & Nelson (2010), behave in ethics and integrity not only could stronger the relationship with the customers, but also the relationship with the stakeholders.

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The History of Business Ethics and Stakeholder Theory in America Ethics play a huge role in the global business field, since considerations have to be made on moral practices, values, and judgments that govern the direction and overall success of the company. Consequently, over the progression of history, managers, entrepreneurs, and stakeholders at the helm of organizations have always had the mandate of making moral resolves on matters of ethics. According to Hunter (2003), such an approach to ethical behavior prompts a substantial growth in the organizational corporation, as well as maximizing business profits, and creating a reputable company image (Cutler, 2004). Notably, the overall performances of organizations that take part in unethical

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