Wells Fargo Essay
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
The
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These ideals profoundly influenced Wells Fargo's culture, resulting in a sales culture that encouraged unethical activity (Jordan, 2016).
Impact of the Stumpf Model on Wells Fargo Culture
The Stumpf model had a profound influence on Wells Fargo's culture. Stumpf's ambitious sales and financial performance expectations created a culture that stressed sales over ethical issues (Ochs, 2016). Employees were motivated to participate in unethical activities because of this culture, which created millions of bogus accounts (Jordan, 2016).
Behaviors Leaders Can Model to Encourage Ethical Behavior
Leaders may set an example of ethical behavior in their businesses via their behaviors and judgments. They can emphasize ethical concerns over financial achievement and create realistic goals that do not encourage unethical activity (Jordan, 2016). Leaders can also create mechanisms that support ethical behavior rather than unethical behavior, such as a hotline for reporting unethical
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References
Wikipedia contributors. (2023). Wells Fargo cross-selling scandal. Wikipedia. https://en.wikipedia.org/wiki/Wells_Fargo_cross-selling_scandal
Ochs, S. M. (2016, October 6). The Leadership Blind Spots at Wells Fargo. Harvard Business Review. https://hbr.org/2016/10/the-leadership-blind-spots-at-wells-fargo
Jordan, J. (2016). Wells Fargo was lacking values-based leadership. IMD Business School for Management and Leadership Courses. https://www.imd.org/research-knowledge/articles/wells-fargo-was-lacking-values-based-leadership/
Epley & Kumar, N. & A. (2019, April 16). How to Design an Ethical Organization. Harvard Business Review. https://hbr.org/2019/05/how-to-design-an-ethical-organization
Epley & Tannenbaum, N. & D. (2012). Treating ethics as a design problem. https://davetannenbaum.github.io/documents/EpleyTannenbaum2018.pdf
Ethical Systems. (2020). Leadership. Ethical Systems. https://www.ethicalsystems.org/leadership/
Santa Clara University. (n.d.). The Practice of Ethical Leadership.
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