Introduction
Wells Fargo & Company is a San Francisco-based community financial services company in California. In 2016, the company was ranked 27th on the Forbes Fortune 500 list of the largest companies in the U.S (Badenhausen, 2016). Wells Fargo workers were discovered to even have opened approximately two million counterfeit accounts in clients’ identities outside their knowledge between 2011 and 2015, according to a 2016 investigation. Employees claimed a prevalent, massive sales mentality that compelled many employees to identify fictitious bank and credit accounts to fulfill unrealistic sales targets and collect bonuses.
Wells Fargo Ethical Dilemmas
The Wells Fargo company’s board revealed the findings of an independent examination in April 2017, slamming the bank’s administration, marketing strategy, and companies’ assembly as causal factors of the inter-selling dishonor rewards. The policy of releasing achievement performance metrics was criticized in the study for pressuring staff to give superfluous goods to people and to establish illegitimate accounts. In 2014, Wells Fargo held an integrity seminar, instructing staff to not establish fake profiles and adjusting the pay plan to create less focus on meeting sales targets but at a reduced pace.
Ethical Frameworks
In several cases, regional bank executives, realized that their objectives remained unrealistic. They became frequently alluded to as the 50/50 goals, implying that just half of the areas were meant to satisfy their objectives. The public bank’s head of strategy development realized that low objectives result in poor performance, whereas high goals lead to a rise in dishonesty (Tayan, 2019). Leadership was also chastised in the study for allowing low-quality prospects as required raw material for the production of revenues. Deterioration was the term used by leadership to describe such low-quality accounts. As a result, they assumed that another level of laxity was an unavoidable business expense in any shopping context.
The analysis chastised leadership for refusing to realize the link between objectives and poor performance, evident in the statistics. According to the analysis, workers who participated in misbehavior were more likely to blame their actions on sales pressure than those on economic reward (Wells Fargo fraud, 2018). Furthermore, the analysis said that the fragmented structure of the organization limited corporate power duties and characterized corporate power duties as preserving a mindset of strong subordination to functional departments in a business.
Changes to be Made in The Future
Review of hiring standard, business practices, and concerns into corporate strategies during the design phase is crucial for ethics and social responsibility. The policy establishes goals that are reflective of the mission for an organization’s operations (Mumley, 2019). Integrating culture change into strategy development ensures that each aspect of the business is compatible with the overall company’s principles. Leadership changes should consider implementing ethical standards, tactical counseling, and a private feedback process regarding practical coherence in the company.
Lessons From the Wells Fargo Situation
Morality and societal values are vital aspects when developing a strategic plan. When it comes to decision-making about organizational effectiveness, morality is fundamental. Suppliers and buyers are also hampered by this choice, as there is no way for them to buy the item from distribution of income means. As a result, morals and social obligations assist the company in implementing the strategy by the general societal morals, beliefs, and ethical principles.
Conclusion
Generally, moral concerns and corporate social responsibilities should be high on a company’s focus list regarding strategic planning. They have a critical role within the companies’ setup, will be of the most significant relevance and interest to participants and are high just on relating to ethical and social responsibility radar. A crisis like the Wells Fargo deception might make it very hard for a corporation to reclaim its clients’ and people’s trust.
References
Badenhausen, K. (2016). Forbes. Web.
Mumley, W. E. (2019). Organizational culture and ethical decision-making during major crises. The Journal of Values-Based Leadership, 12(2), 9. Web.
Tayan, B. (2019). The Wells Fargo cross-selling scandal. The Harvard Law School Forum on Corporate Governance. Web.
Wells Fargo fraud. (2018). Ethics Unwrapped. Web.