BE Case Study 3 PDF

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Summary

Case study of Well Fargo Financial Scandal...

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Running head: WELLS FARGO BANKING SCANDAL

Wells Fargo Banking Scandal Name Institution

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WELLS FARGO BANKING SCANDAL

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General Discussion Questions

1. What should business leaders take away from this scandal?

From this scandal, business leaders should learn to honor compliance to regulatory framework as pertinent to the organization, support truthful workers to grow in the organization, formulate measures to avert unethical practices, avoid setting impractical targets for workers to realize within impractical time-frame and avoid encouraging unethical acts indirectly or directly among workers. 2. What could Wells Fargo have done differently to avert this cultural meltdown? When the initial incident of aggressive sales practice was disclosed in the year 2004 with well-known instances from the year 2002, they could have formulated measures to avert repetition of such instances. On another point, senior administrators should have been called in a meeting to offer them with suitable guidelines meant to stop them from repeating such instances. The organization should have started rewarding workers having honesty, moral value, and integrity. On a different point, investigation should have commenced to ascertain the degree of impact on aggressive sales practices as on 2004 and espouse corrective actions against those who are involved in such practices. Lastly, senior administrators should have been instructed to advice their juniors to desist from such aggressive sales practices. Practice of Ethical Leadership Questions

1. Modeling Character and Values: What values did Stumpf model to Wells Fargo employees? What impact might that have on the culture of Wells Fargo?

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Stumpf modeled dishonorable sales practices and supported ethical delinquency. This entails an impact to the culture of Wells Fargo. One of the impacts is unfairness and mistreatment all resulting from unethical sales practices. For instance, some members of staff were punished for reporting unethical while others were rewarded for acting unethically. Some affiliated members of staff in the company quit their job and were under the massive pressure to involve in unethical sales practices. In addition, some employees were even dismissed for exposing misdemeanors via the corporation’s ethics hotline. This raises inquiries for the rationality of having the hotline active and indicates that the administration was not harmonizing its words with its deeds, but was opposing itself ethically.

2. Encouraging Ethical Conduct: What behaviors can leaders model in order to encourage ethical behavior in their organization? There are various behaviors that leaders can model to promote ethical behavior in their organization which comprises of: leaders should encourage the affiliated members of staff to report ethical matters when they happen without hesitating. In this case, this should be well investigated and suitable sanctions issued founded on well-documented course of action and findings. On another point, leaders should be dynamic in establishing the ethics program for their organization and warranting that others chip in (Stevens, 2018). In addition, leaders should exercise ethical practices and let themselves be viewed as acting in ethical manners in the organization. “Stick to my words and not my deeds,” is an ethically dangerous practice which cannot be maintained for long-term prosperity.

3. Designing Ethical Systems: Wells Fargo did have some systems in place, like the ethics hotline, to report unethical behavior, but it didn’t work. Why do you think that

WELLS FARGO BANKING SCANDAL is? What steps can leaders take to design systems that encourage ethical behavior rather than unethical behavior?

Well Fargo’s system of warranting ethical system within the bank like having ethics hotline to expose unethical conducts by reporting failed to work since the upper administration led by the chief executive officer failed to contribute in any way to avert unethical practices. Instead, they conducted themselves in an organized and structured approach to support unethical conducts. The following steps can be adopted by leaders to design systems that warrant and encourage ethical behavior. (a). The senior leaders must “act ethics,” “speak ethics,” and “think ethics.” This is the leading significant phase in the course of designing systems to support ethical behavior. (b). Issues on “ what is unethical and what is ethical,” must be communicated across the organization. (c). Regular conference must be arranged from the upper administration to the junior who are majority of workers in a structured and organized approach (Pope, 2019). (d). Giving support on reporting instances of unethical practices should be considered. (e). lastly, system of rewarding hardworking and honest members of staff must be put in place.

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Pope, K. S. (2019). Steps to strengthen ethics in organizations: Research findings, ethics placebos, and what works. Journal of Trauma & Dissociation, 16(2), 139-152. Stevens, B. (2018). Corporate ethical codes: Effective instruments for influencing behavior. Journal of Business ethics, 78(4), 601-609....