Wells Fargo's ethical scandal centered on charging millions of dollars in service fees that customers didn't ask for; these services were carried out illegally and unethically by the bank's employees to increase sales and get commissions, lawsuits were filed against the bank between criminal and civil, forcing the bank to pay more than $ 2.7 billion, in addition to the collapse of customer confidence in the bank and tarnish its reputation and the CEO was forced to resign.
Ethical Conflicts
If I were an employee of this bank, the ethical struggles I would go through would be as follows:
1. Unrealistic Profit Goals: According to Carucci (2016), Wells Fargo employees depended more on commissions than salaries as the bank only pays minimum salaries. Accordingly, the employee fell under psychological pressure and faced the dilemma of achieving minimal monthly sales, which was too high to be easily attainable. Therefore, ethical and legal principles were violated to achieve the monthly target.
2. Unethical Leadership: Although there was a hotline to report ethical and legal violations without mentioning the name of the person who reported it, a large number of employees—more than 5000—who were declared to have carried out these fraudulent operations called for consideration of the manipulation that was tacitly accepted by the company's senior management and became indirectly permissible (Fox, 2016).
3. Toxic Workplace Culture: When an employee works ethically and finds himself/herself unsuccessful among his/her fraudulent colleagues, the pressure of his/her feeling of failure by their side will make him/her turn to immoral behavior. According to Witman (2018), the dismissal of employees who do not achieve the required target has made it more difficult in the bank's work environment.
Solving Previous Ethical Problems:
For employees: If the employment policy forces the employee to act legally and unethically, the employee should consult with his management directly. If it is proven to him/her that they are involved in the matter, he/she must leave his/her job immediately because the consequences of unethical behavior are worse than leaving the job itself (MSU, 2022).
For managers, the administration that has become aware of ethical violations must take a direct and strict approach to reducing and eliminating this phenomenon and hold all those responsible to account. This comes with establishing follow-up, evaluation, and risk management committees to solve this matter without it becoming too big to be resolved. It goes directly to the gates of the judiciary, and the press then works to destroy what remains of the company's reputation (Witman, 2018).
Conclusion
The Wells Fargo scandal is a direct example of a flaw in the ethical system within companies. This system is based on putting the employees under great psychological pressure to bring profits to the company by any means, making them act unethically. If they see that the administration is condoning this behavior, they will continue to do so, so this is the general azimuth of a large number of company employees.
References
Carucci, R. (2016). Early lessons from Wells Fargo: Three ways to prevent ethical failure. Forbes.
https://www.forbes.com/sites/roncarucci/2016/09/13/early-lessons-from-wells-fargo-3-ways-to-prevent-ethical-failure/?sh=18ebb155105b
Fox, T. (2016). Wells Fargo: The Lessons of an Ethics Failure. National Defense, C1(757), 10. Retrieved from EBSCO Multi-
Search in the TUW Library.
MSU. (2022). 5 Common Ethical Issues in the Workplace.
https://www.michiganstateuniversityonline.com/resources/leadership/common-ethical-issues-in-the-workplace/
Witman, P. D. (2018). Teaching Case "What Gets Measured, Gets Managed" The Wells Fargo Account Opening Scandal.
Journal of Information Systems Education, 29(3), 131–138. Retrieved from EBSCO Multi-Search in the TUW Library.