Business Ethics Report: Wells Fargo Account Fraud and CSR

This report delves into the Wells Fargo account fraud scandal, providing a comprehensive analysis of the ethical breaches within the company. The introduction establishes the importance of business ethics and its role in governing organizational behavior. Part 1 outlines the case scenario, detailing the fraudulent creation of millions of accounts and the resulting financial and reputational damage. It then explores the concept of Corporate Social Responsibility (CSR), referencing Carroll's pyramid model, and examines the ethical issues and inconsistent practices that led to the scandal. Part 2 evaluates the case through the lens of normative and descriptive business ethics theories, including deontology and utilitarianism within normative ethics, and the application of descriptive ethics to the situation. Part 3 analyzes the stakeholder perspective, considering how different groups were affected by Wells Fargo's actions. The report concludes with a summary of the key findings and a reference list.

Business Ethics

TABLE OF CONTENT
INTRODUCTION.......................................................................................................................................3
PART1........................................................................................................................................................3
Case Scenario..........................................................................................................................................3
Corporate Social Responsibility (CSR)...................................................................................................4
Issues and Consistent Practise.................................................................................................................5
PART 2.......................................................................................................................................................6
Evaluate approaches of chosen case to concept from the perspective of normative and descriptive
business ethics theories............................................................................................................................6
PART 3.......................................................................................................................................................8
Analyse the stakeholder perspective on business behaviour....................................................................8
CONCLUSION...........................................................................................................................................9
REFERENCE..............................................................................................................................................9

INTRODUCTION
Business ethics is an important area which helps out to contemplate all the important
principles, values and standards of the organisation through which the individual behaviour and
their actions can be governed. It helps out to practise all the important potential subjects that
maintain the positive attributes in the society they are like insider trading, discrimination,
corporate governance, bribery etc (Surdam, 2020). As for all the companies it is important that
the business ethics should be properly as ethics frames out all the important legal principles
which sets the standards and also helps in regulatory behaviour of all the business practises. It
provides a decision making and also to implement certain actions in the organisation. This report
will cover a case study which will be divided in three parts in which one will cover the concept
and the second part will discuss about the business theories in the ethical practises The last will
analyse all the stakeholders perspective in the business organisation.
PART1
Case Scenario
Wells Fargo account fraud scandal has made a larger controversy as there has been
created millions of fraudulent saving and checking accounts through which all the clients were
not even aware about. There were certain illegal activities by the company has been noticed that
cost approx one $185 million Fraud. As Wells Fargo clients have faced a major fraud they were
being charged by the unanticipated fees and through which they used to receive unexpected
credits and also the lines of various debit cards bills about which the individuals were not being
aware the managers in the workers have made multiples of selling solutions of financial products
through which all the higher level of management and the accounting fraud has been maintained.
They try to maintain and done fraudulent practice in which employees used to encourage all the
credit cards that are being preapproved by the customers without their employees in the company
and the bankers used to control the clients account and try to access program for their own use in
order to satisfy all such quotas and for financial products (Spinello, 2019).
There were about 5300 employees were being fired in 2016 because of all the fraudulent
sales that has been made by them. And all such financial insolvent institutions but came to words

that effective and the increase in fines through the unauthorised accounts that had been secretly
open for maintaining the illegal practices. In 2017 as there were so many employees were re-
hired and their implicated that the bank will properly see all such measures and they will
terminate the employees who are wrongfully being involved in all such activities as this was a
major fraud which led to the broader coverage through which the illegal practices in banking
practice has been taken place and made the employees to encourage all the illegal activities by
making the innocent customers suffer (Shete, 2017).
Corporate Social Responsibility (CSR)
Corporate social responsibility is mainly the management through which all the business
practices and integration can be maintained in a social manner by the concern of environmental
practice in the business interactions that is being made with the stakeholders. It is mainly living
practice in order to give a positive attribute to the community and all the social areas. It mainly
implies the behaviour in the business through which the social support, economically benefit in
all the laws and the profit with the ethical manner can be maintained. The most important
framework of corporate Shall responsibility are two important conditions they are profitability
and compliance with law. This case study is being dependent on the CSR of the company is they
were indulged in influencing fraud practice in their banking sector through which they used to
speculate various customers by charging and taking huge amount through credit bills and various
areas.
Corporate social responsibility is mainly being well understood by Carroll’s pyramid model
which is mentioned below:
 Legal responsibility: It implies that all the companies should try to follow all the rules
and regulations with proper laws in their complying with any other functioning of the
business area. As it covers out all national, local and a legal obligations through which
the proper operation and conformity in all the government areas can be maintained out.
 Economic responsibility: This is mainly being made in order to produce various goods
and services and to make proper needs of the society is through which the company can
gain profit (Sarkessian, and Nguyen, 2017). All the shareholders in the business practice
can being expected to frame their investment in a proper amount through which the main

responsibility lies is to maintain a profitable business by the surviving of the society in a
long-term basis.
 Philanthropic responsibility: In all the organisation it is important to maintain a
voluntary and discretionary practises which will not being little responsibility but will
provide companies to participate within. They usually covers gifts, donation, contribution
in the group of stakeholders and also for the community development.
 Ethical responsibility: All the business we’ll have to try the normative expectations In all
the managing and working of the business through ethical practice. It covers out all the
standards and the positive and embracing activities which I am not been written down but
should be maintained by the company so as to provide an ethical nature to their working
area (Provis, 2020).
Issues and Consistent Practise
As Wells Fargo has made largest scandals through which all the assets and contemplation is
being curbed out by their financial and fraudulent activities. As there was a creation of fake
accounts of customers through which they used to modify all the kind of compensation structures
in order to ensure exaggerate their sales goals. This is used to make the company’s image in a
fraudulent account and also it frames out to be an illegal activity which analysed to be the
declining of fake accounts but they were created so many of which through which employees
used to indulge in all fradulent acts. There were seems in 2016 it so much of fraudulent activity
has been framed out and resulted of which so many of employees were being terminated. All
such practice made an ethical insight on the mind of customers as it is the duty of the bank to
treat all the customers fairly and provide them better services by proper customer and facilities.
But while managing all such things there was a cross sale and various other activities that has
been taken place through which the fabrication of millions of amount and a fraudulent accounts
for being charged and that cause the image of the bank heavily affected.
It mainly resulted that the scandal has affected the workplace culture in the organisation
through which all the rewards and various incentives to the employees were heavily affected it
mainly printout all the unattainable goal and also made a larger unethical practice that has been
made and other healthy environment that is to be expected (Meyer-Galow, 2018). Wells Fargo
has been covered in the failure in order to maintain the risk evaluation and also there was a

banking giant that has been framed that attention of ethical compliance and all the issues that
have been solved in it was through the implementing strategy operative CSR approach in the
bank was being affected as there was all the falsified activities and the illegal practices which
were being going on through which the image and the ethical and legal and various core values
have been affected. It thereby regulated where is perceived in the accountability and also
affected and the customers scared to rely on the banking sectors in order to maintain the
balancing act through their structure. By all the banking sector has the ethical responsibility that
they should maintain all the customers demand and also secured a data in a positive manner in a
proper unsecured way but such candles impact the behaviour of the customers to rely on the
banking and any other organisation in a proper way.
PART 2
Evaluate approaches of chosen case to concept from the perspective of normative and
descriptive business ethics theories.
The business is being framed into two important theories that are normative and descriptive
ethics. The formal used to cover all the analysis of how people should act and the letter is being
concerned about what the people think to be correct.
Normative theory
It is mainly the ethical action that is being implemented on how people should act in
morality and also provides the behavioural approach about the right and wrong in the moral
actions. The two important areas of this theory are Deontology and utilitarianism.
Deontology ethics and theory covers out all the normative and morality is action which should be
characterised in the action of right and wrong in the behavioral approach and rules provide it is
mainly being used to focus on all the important responsibility, moral duties and with that all the
commitments of the society (Mahmood, 2020). As this theory implies all the ascertain morality
and all the duty and moral worth in various essential actions. It covers out the concept in which
humans usually think in a rational manner and tries to make an ethical decision so that the
individuals may not be harmed. As in this case study it is important that the company should try

to follow all the important emphasis on the customers background and should try to maintain the
fundamental aspects which are needed to be in their actions. It covers out that the government
and the banking sector should implement all the ethical values in their day to day work.
Utilitarianism
It provides all the actions that involves happiness and also the well-being is in the individuals it
has certain ideas through which they maximise of utility in the well-being concept can be applied
in through which the benefit of good, beleif, pleasure can be maintained and pain, evil can be
removed. As through this theory it is being anticipated that the banking sector Wells Fargo
should try to impose and give a proper motivation to their employees to work in an ethical
manner and to avoid all such illegal activities which will harm the customers (Iqbal, and
Mirakhor, 2017).
Descriptive theory
It provides the study of moral beliefs by the group in order to analyse the public believed
to be right and also to engage in proper moral values so as to maintain the standard of working
and people. Mainly works on individual and situational factors as individual factor implements
out the ideas of working in a focus and reflect manner that all the employees in the company
should try to maintain their behaviour any moral reasoning and also evolved it with a big
decision making in a moral concept. As all factor implements out the reason and the actions that
is being generated by the company should be made by which a positive impact can be created out
in the employs and the peoples and also which helps how to reason the human morals and values
that can be reflected out in the decision making process of all the areas. It covers out all the right
and wrong behaviour approach in the moral dilemma of actions in the working area. Wells Fargo
can thereby apply this theory in order to maintain a situation will impact and to create a positive
attributes in the environment and also to words the employer in the working area so at the
decision making process and all the behavioural approach in the working sectors can be
implemented in a better way.

PART 3
Analyse the stakeholder perspective on business behaviour
Stakeholders helps how to maintain the ethical business practices and decision through
which the sustainability of the business can be maintained by the following corporate image and
stable customer base it helps out to maintain the well-being of employs and also by framing CSR
in their module (Goel, and Misra, 2020). They play a vital role in order to maintain the
organisation and to operate the forms and working areas in a proper manner the important
stakeholders for all the organisations are customers, employees, suppliers, government,
management and many more. As for the stakeholder perspective the business is being analysed
in following manner:
 Employees: All the companies are being involved by the employees as they are the acid
in the business they used to cover high power and less interest in the organisation and
they have interested in Containing the advancement of the company and also helps out to
achieve the goals and objectives in the business practice it helps out to shape the
organisation by making the efficient work and business practices and also by putting their
efforts in various means.
 Management: They are being the important key persons in all the companies as they
used involved in all the task making a decision making processes so that the profit of the
company can be maintained. They cover high power and interest in all the organisations
and used to contribute in various decision-making processes and also in all the
consolidated actions that can be taken against the goodwill for the firm. It covers out
more power as they used to maintain the business in a forward scale and also try to
develop all the decision making activities and the management. Wells Fargo should try to
maintain a management in a proper manner so that a business can be properly reflected in
its actions (Cortina, 2017).
 Government: They are mainly the external stakeholders which used to frame all the
legitimate activities in the business practice and also try not to bother in the profit and
loss making areas. They used to help out in making policies and also in the well
awareness and benefit of the society implementing various ideas in the companies and to
effectively utilise and maintain the maximisation of the property through various

scenarios. It covers out all the effective areas and through which the maintenance of the
companies can also be elaborated (Bowie, 2020).
CONCLUSION
From this above report it is concluded that business ethics is an important part in order to
maintain decision for all the companies and also helps out to guide the principles and to promote
the ethical practises in all the business and organisations. It has two important framework which
involves the important theories like normative and descriptive normative implies all the rights
and wrongs that should be applied in the business practices and applicability of all the moral
values. Thereby it helps out to maintain the moral duties, goodwill and all the World a sensual
areas that are certain able action. All the moral development in the companies should imply
through various stages. Wells fargo Try to implement all the moral and ethical values in the
working area so that they may not be any scandals and fraud in order to protect the customers
and their rights all the important article right and wrong should be implemented in their course of
action. Further it is also analysed that Stakeholders are the important part of the company as they
used to provide a proper shape and powers to the company by implementing and contributing in
various behaviour and business practises.
REFERENCE
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Iqbal, Z. and Mirakhor, A., 2017. Key Virtues of Business Ethics in Islam. In Ethical
Dimensions of Islamic Finance (pp. 61-80). Palgrave Macmillan, Cham.
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Spinello, R.A., 2019. Business ethics: contemporary issues and cases. SAGE Publications.
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