Wells Fargo is a multinational bank that provides various financial services to millions of customers worldwide. However, the fiasco involving false accounts and consumer money leaves many lessons for other related organizations to remember. The corporate scandal opened many corporations' eyes to the risks of having a culture that encourages greed, especially among workers. Wells Fargo places a great value on its employees and regards them as assets (Ochs, 2016).
The Source of the Major Controversy
This adds to consumer abuse, which is the source of the major controversy. The scandal was a unique one since it affected the employees in the junior ranks unlike other scandals, which are caused by the senior managers. The unethical behavior was widespread as thousands of workers secretly created new bank and credit-card accounts for clients who had no knowledge of it. As a result, there were overdraft and other related fees leading to the firing of over 5,300 workers (Ochs, 2016).
The High Risk of Losses
When workers are entrusted with information and the management does not follow up matters related to daily operations, the possibility of suffering losses is very high. The employees at the bank may have resulted in the unethical behavior due to various reasons such as pressure to perform, business mindset, and separate work and personal lives.
Pressure to Perform
One reason for the scandal was the pressure the institution put on employees to perform and meet the targets set by the management. The bank had set very high goals for the workers and each was overly aggressive to meet them, leading to performance pressure (White, 2016). In such cases, where pressure is mounted on the employees to perform, individuals are likely to disregard morals and cheat to meet the target and impress the executive. Anxiety at work can have negative impacts on the ethical behavior of the employees leading to compromise. As a result, humans may tend to adopt self-protection behavior to survive the pressure and keep their jobs. They become less concerned about ethics and engage in unethical behaviors and scandals thinking that they will be safe. However, things never work out well such as in the case of Wells Fargo as many employees were fired. Again, such incidences may lead to legal action in which perpetrators are prosecuted for defrauding the bank. The institution may be required to pay huge fines as well as compensate the affected parties. The case of Wells Fargo cost the bank $185 million, which was paid as a fine for its employees' actions in addition to $5 million, meant to pay its clients (Kouchaki, 2016). This is a big lesson to Wells Fargo and other companies to establish a culture based on trust and competence.
Business Mindset
Another factor that may influence the workers to behave in a manner that contradicts the company's missions is the business mentality in the employees. Everything they do is for the benefit of the venture to make profits, compete well with its competitors, and emerge the best. This mentality interferes with personal feelings, ethics, and values at work. Business mindset is capable of causing dishonesty, and employees may never bother to concern themselves with other things that contribute to their moral well-being. They will only think of contributing to the success of the business regardless of the mechanisms they will need to use. The employees of Wells Fargo may have justified their actions by considering the benefits of their company and their own, leading them to open several accounts to meet the bank's goals (White, 2016). Every new account each employee opened was beneficial to them, although it harmed the clients since they were not aware. This kind of fraud contravenes the law and may lead to arrests and prosecution of the perpetrators.
Separate Work and Personal Lives
Another factor that may have contributed to the unethical behavior is the identities that employees gave themselves. Individuals see themselves as parents, professionals, and teachers among others, which they try to integrate into their daily chores. However, failure to integrate them into the career may interfere with one's ethics, and this may be one of the causes of unethical behavior at Wells Fargo. The employees considered themselves as professionals working to achieve the company's targets as well as fulfill their own goals. They separated their personal role and professional roles to avoid feeling guilty about the things they did at work. The employees kept quiet about the happenings in the company yet they knew whatever they were doing was wrong (Brown & Worthington, 2017). Lack of whistleblowing reveals a culture of moral muteness in which colleagues kept quiet even when the actions of other employees compromised the values of the organization.
Creating a Culture of Ethics
The culture of Wells Fargo encourages employees to put their own interest and that of the bank ahead of the customers since it encourages a "sales at all costs" ideology. Such kinds of fraud can lead to lawsuits that cost the company millions of dollars, bad reputation, and poor performance. The costs can be avoided if organizations build cultures that promote moral and ethical behaviors among the employees and other stakeholders. However, the firing of some employees and managers by the bank shows that it was ready to fight fraud and re-establish a new culture that can promote ethical behavior at the workplace.
References
Brown, H., & Worthington, R. (2017). Corporate Culture: Reflections from 2016 and Lessons Learnt. Governance Directions, 69(2), 100.
Kouchaki, M. (2016). How Wells Fargos Fake Accounts Scandal Got So Bad. Fortune.com. Retrieved 20 March 2017, from http://fortune.com/2016/09/15/wells-fargo-scandal/
Ochs, M.S. (2016). The Leadership Blind Spots at Wells Fargo. Harvard Business Review. Retrieved 20 March 2017, from https://hbr.org/2016/10/the-leadership-blind-spots-at-wells-fargo
White, M. C. (2016). After Wells Fargo Settlement, Questions about the Scandal Emerge.
