Introduction
The Wells Fargo Financial Fraud topic was chosen to expand students’ skills in predicting future fraudulent behaviors and ways of curbing such challenges. Other students should care about the research’s title to gain more knowledge on effective decision-making in ethical dilemmas. The topic is important and timely because it exhibits the complexities of solving fraudulent business activities.
Background of the Real Case
The reports of the fraudulent activities at Wells Fargo first surfaced in 2013 when the bank opened over 3.5 million fraudulent accounts. The Consumer Financial Protection Bureau (CFPB) stressed that Wells Fargo created fake savings and checking accounts (Mumley, 2019). The discovery of the data privacy issue later exposed the organization to financial fraud in 2016. The case is a good fit based on the ethical dilemmas linked to its occurrence.
The loss of trust between customers and Wells Fargo is the central ethical dilemma associated with the case. Employers were demanded to use a cross-selling marketing strategy to scam customers by opening millions of savings and credit accounts. The case is challenging because the bank is conducting its operations at the expense of customer losses.
Application of Ethical Theory and Law
The ethical dilemma of mistrust at Wells Fargo would be resolved using different schools of thought. First, adopting a deontological school of thought would have used the human welfare policy to analyze the problem by punishing employees involved in the scandal regardless of the moral consequences. Secondly, the approach of consequentialism would have assisted Wells Fargo in judging the right and wrong actions among the founders of the scandal. The legal ramifications of this case included the fining of the organization by regulatory bodies. CFPB imposed a U.S. $100 million fine for the illegal practices and further mandated Wells Fargo to repay its customers over U.S. $ 2.5 million (Tayan, 2019). The firm has pending legislation of court hearings related to the compensation framework, and no law is being broken.
Potential Solutions and Impacts
The problems at Wells Fargo can be sorted by adopting non-toxic working cultures, implementing consistent working principles, and training employees on the importance of accountability and autonomy. Different ethical theories can align with the suggested alternatives in realizing a better business entity. The virtue-based approach theory adopts the organizational contours in shaping the personalities and morals of individuals in the workplace (Komu, 2020). Wells Fargo can use the strategy in solving the mistrust ethical dilemma. However, the theory’s weakness lies in the limitations of the definition of single virtues because such acts are time-changing. Utilitarianism will prioritize the actions that produce pleasure or happiness for most stakeholders. For instance, compensating account owners can regain their trust in the firm. Utilitarians will face the challenge of making everyone happy through a single act of compensation. The virtue of justice theory will incorporate the cultures of integrity and honesty values in disclosing the rot in Wells Fargo. Nonetheless, the ethical theory lacks guidance on how people should behave.
Decision
The Wells Fargo scandal can be solved through the empowerment of the board of directors. The current leaders should prioritize the pleasures of the key stakeholders to optimize their sales and improve their portfolio in the competitive banking industry. First, the organization should support higher competent, transparent, and inclusive leaders in top positions to spread the culture and value of integrity. Even though the change of leadership can influence the operations of Wells Fargo, there is no guarantee of developing a corruption-free zone. Ruggiero (2019) argues that training new entry-level employees on the importance of crucial decision-making processes facilitates a smooth workflow.
Conclusion
Thus, the company can adopt the policy of awareness creation to change the dilemma. Secondly, the company should replace the cross-selling marketing strategy with realistic, cost-effective, time-conscious, and steadfast goals. For example, the firm can provide financial incentives and rewards for top-performing employees to motivate other workers.
References
Komu, S. S. C. (2020). Pleasure versus virtue ethics in the light of Aristotelians and the utilitarianism of John Stuart Mills and Jeremy Bentham. Al-Milla: Journal of Religion and Thought, 2(1), 37–56. Web.
Mumley, W. (2019). Organizational culture and ethical decision-making during major crises. Journal of Values-Based Leadership, 3(1), 56–78. Web.
Ruggiero, V. (2019). Thinking critically about ethical issues (10th ed.). McGraw Hill Education.
Tayan, B. (2019). The Wells Fargo cross-selling scandal (The Harvard Law School Forum on Corporate Governance, Ed.). The Harvard Law School Forum on Corporate Governance. Web.
