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Question
Ethics in business is critical for trust, however, there are many grey areas of what is, and is not, ethical.
The business world has always relied heavily on contractual agreements while conducting business. These contracts while written in ink are set in stone. Many multinationals have been charged with unethical behaviors. Choose an INTERNATIONAL company that was accused of unethical practices and write 2 pages of TEXT on what led up to the accusation and recommendations to the company. This does NOT include cover page or references.
Use RECENT references that were published between 2011 and 2016.
Answer
Unethical Business Conduct: The Case of Wells Fargo
Ethics play a vital role in the world of business. The moral judgment of what is right or wrong should act as a guide for both employers and employees. Adopting an ethical approach to business ensures that success is achieved in a socially acceptable manner. On the other hand, unethical behavior has adverse effects on the day-to-day running of a business enterprise. Some of the negative effects of unethical conduct include lack of customer loyalty, legal problems, and enhanced market efficiency. In this paper, aspects of unethical business conduct will be discussed within the context of Wells Fargo, a multinational corporation that was embroiled in allegations of unethical conduct in May 2015.
To begin with, allegations of unethical behavior by Wells Fargo’s employees were brought to light through a lawsuit filed by Mike Feuer against the company in Los Angeles. Feuer’s complained that the bank was treating customers unethically following pressure to meet the unrealistically high sales targets set by the bank’s management. Following these revelations, it emerged that the employees were constantly under pressure to record tremendous sales. To cope with the situation, they started engaging in unethical practices that negatively affected the bank’s customers. They used illegal credit cards to open unnecessary customer accounts to achieve the set sales targets (Zacks Equity Research). Additionally, some of the bank’s employees would open unwanted accounts for the customers and charge fees on those accounts without the customers’ consent. Furthermore, they would forge clients’ signatures leading to loss of funds from customers’ accounts. The bank’s customers would then realize later on that new accounts had already been created through forgery and funds deducted from them. These actions show how unethical behavior can affect customers negatively through loss of funds (Abel).
Evidently, unethical behavior in the world of business is largely triggered by the environment in which employees operate. At Wells Fargo, employees engaged in unethical conduct in response to pressure by management to reach unrealistically high sales targets. Nevertheless, the environment does not justify conduct because the employees had a professional responsibility to do their job properly. Moreover, they had an option of complaining about the impracticality of the sales targets to their bosses. Such a move would have possibly led to the alteration of the sales targets to make them achievable. By extension, many negative outcomes would have been avoided, including a lawsuit and a damaged reputation for the bank.
In terms of recommendations, banks like Wells Fargo should seek to improve their business operations by establishing ethical standards for all their employees. Before implementing these standards, it is advisable for the bank to train employees on the importance of adhering to its code of conduct. During training, the employees should be advised on various ways of achieving high sales targets without necessarily resorting to underhand tactics. Such a strategy would greatly boost customer confidence, thereby enabling the bank maintain its market share. Additionally, companies need to conduct regular checks on the day-to-day activities of their employees to ensure that their conduct is in accordance with established professional standards. If Wells Fargo’s managers had been monitoring its employees’ activities vigilantly, the issue would possibly not have become a serious ethical crisis and a subject of a court case. Lastly, in today’s highly competitive business environment, employees should always act ethically in order to maintain the trust of customers.
Works Cited
Abel, Jennifer. “Los Angeles Sues Wells Fargo for “Unfair, Unlawful and Fraudulent Conduct.” Consumer Affairs, 05 May 2015. Web.
Zacks Equity Research. “Wells Fargo Faces LA Lawsuit for Unethical Conduct.” Zacks, 05 May 2015. Web.
