Wells Fargo corruption scandal
The case study covers Wells Fargo, which operates in the Banking Industry. According to client counts and revenues, Wells Fargo is one of the largest banks in the United States. This case studies focuses on Wells Fargo’s confession of its involvement in the fraudulent accounts scandal in which millions of fake checking and savings accounts, debit cards and credit cards were created by employees. Many employees were made to perform unethical acts in pursuit of the impossible goals. This behavior affected clients’ credit ratings and resulted in the illegal exploitation of personal customer information (Franck & Lewis, 2020). The Justice Department and Security and Exchange Committee assessed the company and imposed a fine of $3 billion.
Violation of short-term goals and responsibilities
Instead of studying how it affected its brand equity and spending money on face accounts, the company spent a lot on them. To get more incentives, employees were encouraged to set up fake accounts. The staff committed fraud to reach their sales goals, including forging signatures in order to open fake bank accounts. (Williams 2020. This company was unable to keep its customers’ private information safe because it created fake accounts to pressure staff into achieving the stated goal. Flitter, 2020. Institutions have a moral obligation to ensure that there is no illegal access within and outside their organization. The organization did not protect the financial details of its customers in this case. In addition, the company ignored its obligations under the HIPAA data protection regulations.
What leaders should do to formulate and execute objectives
Managers should have established SMART targets that can be achieved by employees. Inability to achieve these objectives led to manipulation of personal data of clients and the creation of false information. Realism is an important component of SMART goals. The second component of SMART objectives is realism. Management must educate their staff about ethical business practices. They should also ensure strict compliance with the company’s code. Like other banks, Wells Fargo has its own code of ethics. It encourages honesty, transparency, and confidentiality among employees. The company made a serious mistake when management refused to enforce the code of ethics and continued to tolerate violations. Thames (2018) Leaders must ensure that defined goals are in line with company rules and ethical standards. Leaders must adhere to ethical standards during the review and implementation process. Ethical behavior emphasizes openness and responsibility. The leaders should also implement regular control measures in order to monitor the progress of the project and to identify potential causes. Use control tools such as 360-degree feedback and balanced scorecards. Managers would be able to recognize and stop unsustainable behavior during execution.
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