The case of Wells Fargo account fraud reveals the difficulty of attributing the responsibility while encountering the crisis. On the one hand, the company’s managers are blamed for setting a priori unachievable goals. On the other hand, the workers involved in the creation of fake accounts are liable as their illegal and immoral conduct was only one of the possible reactions to the inadequate management. However, when choosing between the two parties, I think the company’s leadership should be considered more responsible for the fraud scandal.
Effective leadership is the ability to create preconditions for subordinates to reveal their best qualities. This, in turn, guarantees better performance and overall outcome for the employees. Moreover, it creates a sustainable atmosphere showing that business leaders do not only pursue short-term goals but also are concerned about the long-term well-being of the organization and its people (The Wheatley Institution, 2014). However, in the case of Wells Fargo Bank, it is seen that the managers chose the strategy of employee motivation that does not induce moral behavior. Indeed, the company’s employees understood that the managers set standards that are hardly achievable. For this reason, in order to avoid negative sanctions, the workers found an illegal way to achieve the sales target.
Additionally, the fact – at least as we know it – that the company has chosen solely two incentives to promote sales signifies that the overall management is ineffective. For instance, the fact that instead of discussing the issues with their superiors, the workers decided to commit fraud reveals that the company may be structured in a manner that discourages free communication. Moreover, the lack of personalized stimuli may lead to reduced employee loyalty meaning that workers would prefer to pursue their own interests without caring about the benefits for the company. Therefore, it can be concluded the lack of understanding and support from leaders served as an antecedent of fraud and immoral conduct.
Reference
The Wheatley Institution. (2014). Lecture on ethics and leadership – Kim B. Clark [Video]. YouTube. Web.