Running Head: WELLS FARGO BANKING SCANDAL

Case Study 3

Submitted by

Campbellsville University

Subject: Business Ethics

Professor: Dr. Rick Corum

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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At the point when news of the Wells Fargo counterfeit ¬accounts embarrassment broke
this past September, the organization's stock reacted as it had for a great part of the year:
It rose. A U.S. congressman would before long name the bank "a criminal undertaking,"
late-night TV hosts would slam it barbarously, and offended parties would document
claims that the organization as of late assessed could cost it billions of dollars. However
on that Thursday in September—as one of the more bizarre and progressively
unbelievable keeping money embarrassments in memory was being uncovered to the
world—Wells Fargo's offer cost ticked happily upward. In a thin sense, he was correct.
The organization would proceed to procure $5.3 billion in the quarter following the
embarrassment—and another $5.5 billion in the latest time frame, finishing off with
March—keeping unblemished an immense income mark that currently rushes to 18 back
to back quarters of benefit above $5 billion, an accomplishment accomplished just by one
other organization in ongoing history: Apple. A year ago, Wells Fargo was the fourth-
most-gainful organization by and large, trailing just Apple, JPMorgan Chase, and
Berkshire Hathaway. Bank stores are up altogether, achieving an untouched high of $1.3
trillion. What's more, the organization's stock has joyfully stuck to this same pattern,
climbing 20% from its transitory plunge in October. Thus, truly, except for the exit of
Stumpf himself (who unexpectedly resigned in October), a pariah would be unable to
perceive any indications of "material" aftermath from phantom record entryway. As
previous COO Tim Sloan, who supplanted his old supervisor as CEO, told Fortune in
May: "If we somehow happened to dial the time machine back to the mid year of a year
ago and state, 'This is what will happen to Wells Fargo throughout the following a half
year: Could Wells Fargo keep on creating over $5 billion of income [per quarter]?' I
figure it would be sensible for individuals to state, 'Well, that is not going to occur.' But
look what's occurred."

2. Encouraging Ethical Conduct: What behaviors can leaders model in order to encourage
ethical behavior in their organization?

It is imperative for staff members to concentrate on achieving key organization objectives

and growing great working connections in the workplace, yet it is similarly critical to
guarantee moral lead among representatives. Moral lead guarantees that your business
keeps up a notoriety for sound proficient standards and qualities that are specifically in
accordance with the organization mission. There are a couple of various ways that you
can advance moral lead among your staff. You can't anticipate that your staff should act
morally as per your organization's code of morals on the off chance that they don't have
the foggiest idea what that code is or why it's vital. Hold ordinary workshops on morals
and how to tackle issues morally. Use precedents and pretending to allow everybody to
pick between extreme choices and clarify why one is more moral than another. The all
the more preparing and assets you give, and the more noteworthy accentuation you place
on being moral and acting in like manner, the more your staff sees precisely what you
expect in the office.Far again and again, organizations essentially anticipate moral
conduct; be that as it may, in the event that you need to advance this as a noticeable
conduct among staff, at that point you have to appear and demonstrate, as it were. Give
prizes to strong moral conduct; for instance, on the off chance that you have a worker that
goes well beyond to set her own advantages aside to dependably do what is best for her
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customers, that is viewed as moral conduct and she ought to be remunerated and held up
for instance for others to endeavor to do likewise. The more you compensate workers for
sound moral choices, the more probable the majority will take action accordingly.

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

Retaliating against informants is a noteworthy rupture of trust. Morals hotlines are

actually the sort of shields set up to keep illicit action from occurring and give shelter to
representatives from hazardous workplaces. One previous Wells Fargo HR official even
said the bank had a strategy set up to strike back against tipsters. He said that Wells Fargo
would discover approaches to terminate representatives "in striking back for sparkling
light" on deals issues. It could be as straightforward as checking the representative to
discover a blame, such as showing up a couple of minutes late on a few events. On the off
chance that this individual should be at the branch at 8:30 a.m. furthermore, they
appeared at 8:32 a.m, they would fire them, the previous HR official told CNNMoney, on
the condition he stay mysterious out of dread for his vocation. CNNMoney addressed an
aggregate of four ex-Wells Fargo laborers, including Bado, who trust they were
terminated in light of the fact that they tipped off the bank about dishonest deals
rehearses. Another six previous Wells Fargo representatives disclosed to CNNMoney
they saw comparative conduct at Wells Fargo despite the fact that the organization has a
strategy set up that should forestall countering against informants. CNNMoney has found
a way to affirm that the specialists who talked namelessly worked at Wells Fargo and
now and again talked with partners who verified their reports. It's conceivable Wells
Fargo could confront lawful ramifications for any countering that happened against
workers who called the morals line. The terminating unquestionably took a colossal toll
on Bado's life. It put a perpetual stain on his securities permit, driving away other
forthcoming bank managers. Today, the New Jersey man's home is nearly being
dispossessed and he's working low maintenance, at Shop-Rite.