Ethical Issue the Wells Fargo & Company

free essayWells Fargo & company is one of American multinational banking companies that leads in the sphere of financial service delivery to its esteemed customers across the states. Since its inception in 1998, Wells Fargo has had its headquarters in San Francisco and is recognized as the largest bank in the world as far as market value is concurred (Calvey, 2014). Similarly to any other company, Wells Fargo has had its strengths and weaknesses, and encounters some administrative, financial, ethical, as well as employment problems.

One of the critical decision that has been made by the Wells Fargo management was the reduction of the interest rates. It was noted that the company’s net interest was decreasing very fast, and the bank could be on the verge of having huge losses unless the proper measures were taken timely. What is more, the potential customers shifted to trade with another competitor such as JPMorgan Chase Citigroup. Therefore, the management had to reduce the interest to make it affordable for the customers; yet no other solution to the problem was suggested (Calvey, 2014).

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Another important decision made by the management of the Wells Fargo was to cut the cost as well as eliminate huge legal bills that the company had to deal with. Before that year, several account holders appeared in court to petition the allegations of the bank employees creating several accounts without customers’ confirmation. Headed by a Los Angeles attorney, Michael Kade, the workers opened the accounts by forging the signatures of the account holder and awarded them with credit cards later. Such decision was suggested according to the bank’s attempt to find ways to improve their net profits by avoiding further court cases that could negatively taint the reputation of the bank (Calvey, 2014).

The ethical issue, as reported by San Francisco Business Times, consisted in the dismissal of thirty workers of Wells Fargo because of the above mentioned fictitious new accounts. According to one of the expelled employees of the company, such actions were the result of constant pressure by the management of the bank to meet the sales quotas by each worker. The employee further reported that the management expected that by 2013 at the end of each day from 9:00 AM to 6:00 PM each employee had made a total of twenty sales (Calvey, 2014). It was rather tough as an employee could spend at least one hour with a single customer. Therefore, by the beginning of 2014, this requirement was reduced to fifteen sales per day by each client.

As the employees wanted to fulfill the goals of the company, they ventured into illegal behaviors of opening fictitious accounts for their customers in their absence that resulted in the existence of several different accounts related to single customer. The latter were feeling deceived and opted for suing the company of the misconduct as well as of the damages the company caused to the bank account holders. The case was represented by attorney Michael, who forced the company to take action as per the account holder’s allegations (Calvey, 2014).

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In order to solve the ethical issue and restore the trust of the account holders, the management had to dismiss thirty employees. Apart from that, the company had to pay for the damages they caused to the account holders (Calvey, 2014). Considering the above mentioned, it is possible to say that the matter was addressed; however, it is hard to say that it was fully resolved.

The first criticism refers to the way the ethical issue was settled by the management. As a matter of fact, the employees had no other option but to resort to an alternative way of achieving the company’s goals to increase sales (Calvey, 2014). Such scenario implies that the company established too many aims that were rather unattainable. Therefore, it is necessary that every organization dedicates enough time and effort to outline reasonable tasks that are easy to achieve with the required resources.

The company management ought to have investigated the workers who were the victims so as to bring them to an alternative disciplinary action rather than immediate dismissal. Furthermore, the management ought to have conducted proper training for the employees regarding the ways to quickly attain the quota goals, because even after reducing them to fifteen sales per day, the employee’s still failed to fulfill the task (Calvey, 2014).

It should be mentioned that the Human Resource management of the company did not succeed in playing their roles of advising the employees to undergo the training in order to achieve the company goals. The department should have fought for the rights of the dismissed employees because, in the first place, the latter acted in the interest of the bank as opposed to personal interest (Calvey, 2014). Therefore, it is sensible for the bank management to reconsider their decision.

In conclusion, it is evident that addressing various matters, including ethical issues in the workplace is crucial for every company. When interaction with the employees is concerned, it is necessary to act with caution, motivation, and respect among other incentives because the success of every business depends on the workforce as they perform various tasks. At the same time, the above mentioned dismissal of the employees may serve as an example to those with ill motives so as to discourage from such cases as that of Wells Fargo. The HR department should emphasize the importance of conducting occasional trainings for the employees to cope with the issues that occur every day in the banking systems.