Contemporary Business Ethics Essay On Wells Fargo.

Students will have the opportunity to select a contemporary business ethics case that has been raised in the media within the past three months. Areas covered may include (but not limited to: business fraud, corporate social responsibility, leadership misconduct). Students must (after consultation with the lecturer and after a short presentation to the class provide the details of their case). Student’s must incorporate individual research to support their argument e.g a summary of the company’s code of conduct and or corporate social responsibility polic.

Overview of the Ethical Issue Case Study

The essay helps in the entire analysis of the ethical issue which has been taken place in the year 2018. The overview of the ethical issue related to the Well Cargo tried in altering the documents of the customers. Well Fargo & Company is one of the American multinational financial services organization which is headquartered in San Francisco.

The main functions of the company are inclusive of providing the different financial services, loans, mortgages services which will be beneficial for the company to gain huge productivity. There was a huge scandal which was affecting the overall productivity and profitability of the organization in a negative manner and this had led to loss of faith among the different customers.

The ethical issue which has been identified in the respective case study is related to scandal wherein Wells Fargo is altering the corporate customer’s documents. In May 17, 2018 this was noticed that Wells Fargo found themselves in another scandal as the report of the news surfaces. The news surfaced that the different employees in the respective unit wherein the different banking details and other services take place, the business banking of illegally altered the different documents of the customers who were the corporate kind of customers of Wells Fargo (Egan 2018).  

This was seen and analyzed that employees of the bank could have tried in changing and altering the different other documents of the employees as well without the knowledge of the different customers (PARTNERS 2018). An article revealed that the Wells Fargo’s wholesale unit added along with altered the various kind of information without the knowledge and the consent of the customers including Social security numbers, addresses along with the date of births of the business clients which was a huge trouble and trust issue among the different customers (Davies 2016).

Additionally, this was seen that the company accepted the entire issue was unethical and they tried to become aware of the entire behavior in the recent months from the different employees. After the entire investigation was done, this was seen and identified that the behavior was not an isolated incident and there is further investigation taking place as well (Shaw and Barry 2015).

Wells Fargo has tried in reporting the problem to office of the Comptroller of the Currency and the agency is probing the problem according to the different person familiar with the respective matter. The main issue regarding the entire incident is that there was involvement of the different kinds of documents of the customers which are being for the various internal purposes and successes as well. Moreover, the employees of the respective bank were guilty of performing the respective incident and the bank is still investigating the entire matter in accordance to the protection of the customers (Chell et al. 2016).

Ethical Concerns Raised

There are various kinds of ethical concerns raised after the issue which occurred in Wells Fargo. Firstly, the different customers lost faith from the different financial service providers named Wells Fargo. The number of issues or causes for the alleged kind of behavior at Wells Fargo was put forth. This included the poor leadership, inadequate auditing, poor control and improper incentives as well. The human behavior traits were vey unethical in nature in the respective company which affected the brand image of the firm in a negative manner (Chell et al. 2016).

Furthermore, this was seen that the respective scandal affected the overall vision of the company in front of the other competitors in the market. With such illegal actions which were done by Wells Fargo, the customers lost faith from banking with this bank and this affected the overall profitability of the firm in a negative manner (Mason 2017). There were no such following of the different rules and regulations which affected the overall growth of the firm in a negative manner. Moreover, there was breach of the private data of the different customers is the other issue which was impacting the profitability of the firm in a negative manner.

The financial service provider company tried to breach the data of the different customers in the market for gaining profitability in the market. This was the other aspect which was required to be analyzed and treated as the ethical concern which was affecting the overall growth of the firm.  The scandal of Wells Fargo was different from the other kinds of scandals which keep on occurring (Chell et al. 2016). The employees of the respective department became aggressive and they tried to hack the data which was totally unethical in nature.

According to me, the primary problem which exists in the given case is that there lacks a sense of ethicality in the entire organizational culture and it is due to this that the different members of the firm engaged in this faulty procedure were large in number (Bloomberg.com. 2018). I believe that the main reason why this incident has taken place because the organization lagged a definite set of social policies and practices which would have guided the employees and discouraged them from cheating and engaging in the fraudulent activities just to cover up for the lack of efficiency.

Another belief which I think has contributed to the given incident has been due to the culture of rewards for higher production. The management in order to increase their own individual profits tend to lure the employees in completing their targets and this has been the major contributor of the fraud. I believe that the case of Wells Fargo portrays a case of pay for performance but it can be deemed to be ethically wrong because it engages in pay for the wrong performance. However, after the incident came into consideration, another mistake made by the organization lied in the non-acknowledgement of the problem immediately and the failure to detect the fake accounts.  

Reflective opinion on the case study

This case is a classic example of wrong doing in the massive scale. A similar incident took place in India where the senior management of bank named Punjab National Bank was involved in a fraud activity involving billions and then these members left the company but justice has not been served (Chakrabarty and Bass 2015). However, at present the Wells Fargo company has admitted the fraud and has stated that the matter is being investigated in. Hence, according to me, the company needs to revive its pay system and ensure that it engages in successful decision making which will then go a long way in ensuring that the trust of the different people remain with the firm. At present, I fail to agree that an ethical decision has been made.

Applying the decision making theory, the company stated that there were no poor consequences of the given incident on the customers’ accounts and their lifestyle, but this was not the actual case and the mere problem lying in the case relates to the problem associated with the wrong actions of the firm and its employees (Businessinsider.com  2018). My view point is based on the philosophical theory of ethics based on Deontology or popularly known as the Deontological Ethics. According to this ethical theory, the focus of ethics should be on the wrongness or the rightness of the action itself and should not concentrate on the rightness or the wrongness of the consequences of the particular action (Ferrell  and Fraedrich 2015).

Thus, having followed the concept of a Deontologist, I can state that the righteousness of the situation depends on the action which then contributes to the concept of right or wrong. The action of right takes the priority over the concept of Good. Hence, I believe that even though the consequences of the action might be good, but the wrong action which resulted in that particular good makes the particular situation unethical in nature (Paquette, Sommerfeldt  and Kent 2015). Hence, in the case of Wells Fargo, although there were no negative consequences of the action which was taken by the employees, the mere existence of the wrong action having been taken by the organization based on the pure lure of an incentive caused the situation to be unethical and the allegations of the firm that they did not engage in anything wrong can be considered to be wrong and inconsistent (Huffingtonpost.com 2018).

Conclusion

Therefore, from the given analysis on the case study of the particular organization Wells Fargo which misplaced the private details and information of the different people in order to complete their targets and gain high incentives can be deemed to be unethical in nature. By engaging in the particular action, Wells Fargo faced a number of consequences and the trust of the people in the company was lost. The essay laid down the details of the particular action which took place which was then followed by an outline of the details of the case in relation to the ethical point of view. The latter half of the essay is reflective in nature and outlines the decision making criteria and the consequences and actions of the fraud from my point of view and understanding of the subject of ethics. Lastly, I have made use of the Deontological ethics in order to support my views and align my opinion.

References

Bloomberg.com., 2018. Wells Fargo Fraud . [online]. Available at:  https://www.bloomberg.com/news/articles/2018-05-04/wells-fargo-reaches-480-million-settlement-in-class-action-suit (Accessed on: 27 Sept. 2018).

Businessinsider.com , 2018. Wells Fargo Fraud. [Online]. Available at:  https://www.businessinsider.com/wells-fargo-fraud-claim-how-to-file-2018-5 (Accessed on: 27 Sept. 2018).

Chakrabarty, S. and Bass, A.E., 2015. Comparing virtue, consequentialist, and deontological ethics-based corporate social responsibility: Mitigating microfinance risk in institutional voids. Journal of Business Ethics, 126(3), pp.487-512.

Chell, E., Spence, L.J., Perrini, F. and Harris, J.D., 2016. Social entrepreneurship and business ethics: Does social equal ethical?. Journal of business ethics, 133(4), pp.619-625.

Davies, P.W., 2016. Current issues in business ethics. Routledge.

Egan, M. 2018. Wells Fargo's ethics hotline calls are on the rise. [online] CNNMoney. Available at: https://money.cnn.com/2018/06/19/news/companies/wells-fargo-ethics-hotline/index.html [Accessed 27 Sep. 2018].

Ferrell, O.C. and Fraedrich, J., 2015. Business ethics: Ethical decision making & cases. Nelson Education.

Huffingtonpost.com, 2018. Business ethics. [Online]. Available at: https://www.huffingtonpost.com/mark-pastin/the-suprise-ethics-lesson_b_14041918.html (Accessed on: 27 Sept. 2018).

Mason, R.O., 2017. Four ethical issues of the information age. In Computer Ethics (pp. 41-48). Routledge.

Paquette, M., Sommerfeldt, E.J. and Kent, M.L., 2015. Do the ends justify the means? Dialogue, development communication, and deontological ethics. Public Relations Review, 41(1), pp.30-39.

PARTNERS, V. 2018. Another scandal: Wells Fargo alters corporate customers’ documents. [online] Housingwire.com. Available at: https://www.housingwire.com/articles/43401-another-scandal-wells-fargo-alters-corporate-customers-documents [Accessed 27 Sep. 2018].

Shaw, W.H. and Barry, V., 2015. Moral issues in business. Cengage Learning