Business Ethics Report: An Analysis of Wells Fargo's Ethical Failures

This report provides a detailed analysis of the Wells Fargo scandal, examining the ethical issues that arose from the company's practices. It begins with an introduction to business ethics and the specific case of Wells Fargo, outlining the ethical problems related to the creation of fake accounts and other unethical behaviors. The report discusses how the organization handled the ethical problems and defines the concept of Corporate Social Responsibility (CSR) in the context of the case, including Carroll's CSR pyramid model. It then applies relevant normative and descriptive concepts of business ethics to the situation. Furthermore, the report analyzes the consideration of varied stakeholder perspectives, including internal and external stakeholders and the impacts of both ethical and unethical practices on these groups. The report concludes with recommendations for the company and provides a list of references.

BUSINESS ETHICS

Table of Contents
INTRODUCTION.....................................................................................................................................3
PART 1.......................................................................................................................................................3
Briefly justify ethical issues that company had........................................................................................3
Briefly discuss how organization handled ethical problem......................................................................4
Defining CSR concept with reference to chosen case..............................................................................4
PART 2.......................................................................................................................................................6
Applying appropriate normative & descriptive concepts of business ethics in the context of Wells
Fargo’s Woes continue as chosen case....................................................................................................6
PART 3.......................................................................................................................................................7
Analyzing consideration of varied stakeholder perspectives...................................................................7
CONCLUSION..........................................................................................................................................8
RECOMMENDATIONS-.........................................................................................................................9
REFERENCES........................................................................................................................................10

INTRODUCTION
Business ethics is considered as contemporary organizational principles, set of standards
and values that govern behavior and actions of an individual person within a company. Each
candidate or stakeholder by following organizational principle obtain varied benefits in
unexpected manner. The current assignment will be based on specific scandal case and that is
Wells Fargo’s Woes Continue. The study will explain ethical problems organization had and
how it handled each. It will justify the concept of corporate social responsibility and will also
define relevant descriptive & normative theories related to case. Furthermore, the report will
clarify consideration of varied stakeholder’s perspectives.
PART 1
Briefly justify ethical issues that company had
Each ethical issue put negative impact on success and progress of a company in term of
damaging their brand image in market or entire sector, where it has performing from longer or
may be short term period. By referring to Wells Fargo’s Woes case, organization face legal
challenges due to having trust issue as its employees has opened millions of face credit card and
bank accounts in order to meet wildly unexpected sales aim, which considered in list of unethical
business practices. It has admitted that candidates’ forces thousands of borrowers to pay for auto
insurance, which they do not need to pay. In term of ethical issue, firm has losses faith of its
customers upon management that is not appropriate for its bank image in market as it losses may
profitable projects. This scandal occurs in 2016, which leads to decrease sales and productivity
as well as customer base of the most trustable American multinational financial services
organization. It can be said that without taking approval or permission from individual, no one
may use resources either intangible or tangle of other person, as it unethical practice that affect
negatively upon person who conduct it just like chosen company staff’s members do as they
create fake accounts without taking approval of their customers (The 10 Biggest Business
Scandals, 2017).
Along with discrimination and harassment in the workplace, fake accounting practice
were also recognized and included in category of ethical problems that firm had. For face
accounts its employees has utilized the name of the most trustable consumers, who had strong

relationship with brand from longer. Wells Fargo’s Woes case is covered in the list of the top 10
biggest business scandals in the world at year 2017.
Briefly discuss how organization handled ethical problem
After the allegations and facing legal issues due to conducting unethical practice, bank
may handle its ethical problem in effective manner, by following legal process in term of paying
criminal charges and terminating workers that has opened face accounts and receive unnecessary
amount of money from their loyal customers that they did not need to pay. It is quite essential for
company to take better action regarding current ethical issue, because it has affected its brand
reputation and position in banking sector, where number of rivals are existing and capable to
replace it in effective manner, which is one of the biggest threats for Wells Fargo. In term of
strategic decision, it may also change its compensation format to place less emphasis on sales
objectives. Along with these attempts it may do more that require to handle ethical issue which
firm had, just because of workers.
It may take legal action upon those who do so, along with firing them over fraudulent
accounts, as it impacted the whole business in negative manner, and decreases number of
customer base, which is not good for any company in the world of corporate (The Wells Fargo
Fake Accounts Scandal Just Got a Lot Worse, 2017). Organization may teach a good lesion to
people who attempts to create many face accounts and pressure approx. 570,000 customers to
auto insurance. Furthermore, for purpose of consumer safety, management may take initiative to
close the fake accounts as soon as possible that had been created without permission of people.
The biggest allegation put upon brand that it had charged 500,000 potential clients for
unnecessary insurance, because of unexpected unethical actions from its workers, who after face
many issues as firm taken legal actions against their practices, which is actually important. Just
because of above issues, bank still facing challenges in term of congressional investigations.
Defining CSR concept with reference to chosen case
Overview of concept-
Corporate social responsibility is the most beneficial and useful management concept in
the world of business that has been utilized by many companies, whether it is small or large. It
used in term of businesses self-regulation with purpose of being socially and ethically
accountable for varied things like customer privacy, environmental sustainability, worker’s

safety and progress (Sánchez‐Torné. and et. al., 2020). This act drives the attention of each
company towards conducting sustainable practice which is quite beneficial for them as well as
community and other local people.
Carroll’s pyramid model-
It is one of those simple models that supports a company by defining how and why they
should meet their social accountabilities (Lu and et. al., 2020). Chose organization may apply
this concept in regard to overcome negative affect of unethical practices, in term of adopting and
considering the most essential types of accountabilities that has been highlighted through model
and developed in the context of each company.
Figure 1 Carroll's CSR Pyramid
(Source: Carroll's CSR Pyramid, 2021)
It includes economic, legal, ethical and philanthropic accountabilities, which Wells Fargo
and its workers may consider and conduct into practical manner that help venture and individual
from illegal actions and legal matters as well.
Claims of company regarding corporate social responsibility and actual activities-
Wells Fargo after the biggest scandal may claim to commit each practice according to the
CSR concept, which help to rebuilt image of its bank in the market that has been affected

negatively due to illegal act of workers. It claims to make transparency between customers and
management. It commits to offer satisfactory services to people and make assure that their
privacy is the main concern of organization (Shichor and Heeren, 2020). It actually attempts
activities to advance social inclusion and diversity by supporting assure that all individual across
its workforce, communities and supply chain feel valued.
Is company practice consistent with its claimed values-
Organization consistent with its above claimed commitments in term of developing
transparency by providing all the information regarding financial plan changes and other services
that it commits to offer to citizens (Vertigans and et.al., 2020). It has provided 3 billion as
compensation and assure that each customer is safe with firm, because they may hire trustable
and honest employees who are able to provide satisfactory services to consumers.
PART 2
Applying appropriate normative & descriptive concepts of business ethics in the context of Wells
Fargo’s Woes continue as chosen case
Normative theories-
Virtue ethics-
In term of normative theory, it defines that individual acquire virtue through own practice
such as by being honest, generous, trustworthy, brand and so on. It enables them to gain the trust
of other people and away from those allegations that affect their image in front of other people
(Vandenberghe, 2020). This concept is developed by Aristotle and other ancient Greeks. It is one
of the third key approaches in normative ethics. According to it, when workers conduct ethical
practice in term of do not creating face accounts they may retain potential customers and gain the
attention of other as well which in return increase their sales target that help to grow venture
even better than its rivals.
Ethical egoism-
Just like above, it also used and considered as form of normative theory that promotion of
individual own good is in according with morality. It state that it is quite good to promote one’s
own things and it is never moral not to promote it (Rodgers and et.al., 2020). By following the
suggestions of this theory, Wells Fargo workers may learn lesson as it permit everyone to see

their and other life as being of ultimate value, and respect it in ethical manner, without hurting
anyone. It may be consisted with general sense moral perceptions. It recommends individual to
concentrate on own long term aim, instead of others and attempt to achieve by conducting ethical
practices, which organization staff may do in the future.
Descriptive theories
Individual factors-
Descriptive concept is distinguishing into two forms such as individual and situational,
which drive the attention and focus of person towards taking better decision while performing in
a company. According to this concept, individual person may take judgment after considering
varied factors that may impact their performance and current practices (Kör, Wakkee and van der
Sijde, 2021). For example, they may take decision according to own capability and efficiency in
the context of specific subject, which drive their efforts towards conducting ethical practices.
They take any form of action by taking and using own experience regarding particular situation,
which give them right direction in term of ethical and sustainable practices that is important for
everyone to conduct in effective manner.
Situational factors-
This theory is quite different from other descriptive concepts, as it provides suggestion to
employees to take judgment and act according to current situation or consider everything at
workplace, which is important for them as well as organization in term of success. It may refer to
situation cues, psychological situations feature and situation forms. Instead of focusing own
success, individual may concentrate on environment around them where they work, because it
made individual worker capable behave ethically and consider the needs of other that help to
boost morale and retain skilled employees. By considering organizational situation, they may
take ethical decision in appropriate and sustainable manner in order to grab in the future
advantages.
PART 3
Analyzing consideration of varied stakeholder perspectives
Effect of ethical practices on Wells Fargo internal and external stakeholders-

There are many examples existing in the corporate world as a successfully companies
that has conducted ethical practices like developing rules and policies related to workplace
discrimination, etc. By considering these, it can be said that ethical practice put positive impact
on Wells Fargo external stakeholders like investors and customers, in term of providing
satisfactory services to them and increase their satisfaction level, which is not an easy task to
enhance (Ramadhini, Adhariani and Djakman, 2020). An ethical practice in term of data privacy,
conduct within well reputed organizations like chosen one may put positive impact on internal
stakeholder like owner, manager and workers, in form of building strong brand image in market,
where profitable investors and customers seek to retain with those companies that has conducted
ethical practices from longer and has not faced any kind of legal matter. It affects positively in
term of increasing and improving relationship between each stakeholder. Data privacy is the
main concern of customers and other stakeholders as well, by considering this company may
retain each of them forever with organization, which is beneficial for venture in term of
increasing sales.
Unethical practices impact on organizational internal & external stakeholders-
On the other hand, it can be said that a company may face varied challenges and
allegations from key stakeholder side whether they are external or internal due to lack of
unethical practices, as it may lead to decrease sales, customer base, and profitability more than
rivals and affect market position as well in negative manner, which is one of the biggest concern
of Well Fargo. Just because of unethical practices like lack of data privacy, misuse of customers
account and providing wrong information to them like chosen company workers does in term of
forcing each customer to pay auto insurance fee, may unable firm to retain potential consumers
for longer (Han and et.al., 2020). It may lose them and investors as well who take initiative to
growth venture even better. Among the most unexpected outcome of unethical behavior on
internal stakeholder as manager and external as customer is that they may not be able to maintain
long run relationship with brand. They may switch to another banks who offer valuable services
to people according to their needs, preferences and concerns, which is important to do for each
brand.

CONCLUSION
By summing up above discussion, it has been summarized that by following corporate
social responsibility concept and conducting practices according to business ethic principles,
organization has successfully overcome the negative impact of scandal. It has been identified
from above study that by committing for reform and transparency, Wells Fargo has attempted to
regained the trust of her customers, which is quite important and beneficial for everyone as
owner, workers and potential consumers. Furthermore, from above analysis, it has been
concluded that by taking decision related to service or product for customers after considering
stakeholder perspectives, firm has rebuilt its brand image in market.
RECOMMENDATIONS-
 There are several things exist in corporate world that Wells Fargo and its staff members
can take into their consideration as suggestion of implication after what happen earlier,
because it can help firm to overcome everything and start with new in term of building
trustworthy brand image in market, which is not that easy to do as it require a lot of
attempts and strategic implications. For example, company can make assure that each
data related to customer is secure by implementing new systems with high tech security
password, which it not simple to open by another person without taking approval or
access from senior authority. It may consider an ethical practice of management after the
biggest scandal. It helps to regain the attention of earlier potential customers as they are
beneficial for brand in term of gaining attention of new as well.
 In term of recommendation, company can hire new staff and provide training to them
about securing customer accounts, which is important for them after making earlier
mistakes. Along with this management can take suggestion from new workers who are
capable to conduct ethical practice in form of making privacy and continue for longer
related to client data.
 Furthermore, organization can follow and adopt each suggestion into practical manner in
term of behaving ethically by focusing on needs and expectation of clients who trust upon
venture offers and management and build relations on the basis of only one element and
that is faith. It can use social media sites to promote their mission, and vision statement
that also contribute to regain the trust of local people. Because without considering and

conducting ethical practices a brand may never sustain and grow in its sector as they may
lose position and reputation in market, which is not beneficial for it at all. It can be said
that ethical business practice prevent companies from legal issues and protect customers
to lose their trust open venture.

REFERENCES
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Ramadhini, A., Adhariani, D. and Djakman, C.D., 2020. The effects of external stakeholder
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<https://www.toolshero.com/strategy/carroll-csr-pyramid/>
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