WELL FARGO CASE STUDY 2
What should business leaders take away from this scandal?
Business leaders should be aware of the pressure they put on their employees in the quest
to optimize on sales. Employees in Well Fargo were pressured to make sales, and this led to the
creation of fake accounts. Leaders should focus on of setting goals that are achievable and will
not encourage unethical methods of making sales. Also, leaders should apply ethical
considerations in business. It is clear that top management was so determined to make sales in
whichever way, even unethically. When staff members complained of the company prompting
them to engage in unethical selling, they were fired. Leaders should create a better culture, which
is acceptable by the workers and customers.
What could Well Fargo have done differently to avert cultural meltdown?
Wells Fargo should have maintained an ethical culture. It was said that the company
checked customers' bank accounts without their consent. Wells Fargo should have monitored its
employees’ activities. The supervisor’s duty is to monitor what employees are doing. However, it
seems like supervisors did not do their jobs. Leadership was lacking. The bank should have hired
employees with good leadership skills. Wells Fargo should also have motivated its employees to
increase their performance rather than pushing them to practice unethical selling. Wells Fargo
should also have created a policy, which all top management and employee should follow. This
would have helped rule out cases of fraud and unethical selling.
What values did the Stumpf model to wells Fargo employees?
Stumpf insisted on cross-selling, which entailed selling eight bank products to every
customer. This required employees to be persuasive enough to convince customers to purchase
extra services than they intended. Stumpf also emphasized on establishing trust with the
clientele. To him, for a customer to make a certain transaction or purchase a service, they needed
to trust the bank with their money. They also needed to be sure that the bank was recommending
the best bank services for them.
What behaviors can leaders model in order to encourage ethical behavior in their
organization?
Leaders should not focus on making maximum sales but should also guide the employees
on the ways to make these sales, that is, after setting targets, they should define how these targets
should be met. They should monitor the activities of employees in the company. Leaders should
also encourage employees to boost their performance. In wells Fargo, employees worked under
pressure from supervisors and were “bribed” with bonuses as compensation. They were bound to
take the easy way out and commit fraud in order to reach the target goals. This was wrong.
Instead, the leaders should have motivated employees to make good sales through incentives.
Designing ethical systems
The ethical systems did not work because the management was too greedy. Those who
reported unethical behavior were actually fired to show that the management knew the unethical
selling was bringing good profits. Leaders should restate the values of the company. Employees,
as well as the management team, should be driven by these values in conducting business rather
than being driven by their thirst for money. Leaders should also put a statement of ethics that
defines what is ethical and unethical in the company. Ethical systems would also encourage fair
