In what ways does this case study demonstrate incentive gaming? How is it different from any other type of ethics? 10. 8. Attention! The result was a corporate culture that drove company team members to fraudulently open millions of accounts using their customers’ funds and personal information without their permission.” Since metrics like new accounts opened are relied upon by sell-side stock analysts, this practice helped to double Wells Fargo’s stock price between 2012 and 2015, greatly impacting executive bonuses. The average banking household, for example, has about 16 products. Depositors who didn’t need or want these products were hit with late fees, overdraft charges, annual fees, and other costs. Nearly every human organization has principles - rules or opinions held by the organization’s members that allow its members to decide how to act. Does that education provide the necessary tools for their future lives as business leaders? The tensions between corporate culture, financial incentives, and employee conduct is illustrated by the Wells Fargo cross-selling scandal. Kant’s ethical theory is known as the categorical imperative. For clarification of how the IMA Statement of Ethical Professional Practice applies to your ethical dilemma, contact the IMA Ethics Helpline. A highly regarded news source for defense professionals in government and industry, National Defense offers insight and analysis on defense programs, policy, business, science and technology. Apparently it was all in the name of achieving financial targets set by top executives. If you’d like this or any other sample, we’ll happily email it to you. These are stylized ethical scenarios where some decision needs to be made that has ethical consequences. But culture is too vague of a word to be useful in thinking about a company’s policies, so let’s try to drill down to three specific concepts that organizations can use in practice. Should anyone really be surprised that this scandal occurred?
A friend in the military once told me that the moment to get worried is when those under one’s command stop complaining. Wells Fargo has a fiduciary duty to treat its customers fairly. Wells Fargo employees were wrong for lying, creating and opening false accounts as well as hiding the fact that they were doing so in order to receive an incentive. The goals set by management turned out to be too aggressive (and some would say unreachable), and many employees chose to create fake accounts for customers in lieu of actually cross-selling them into other services provided by the bank. A collection of one-of-a-kind videos that highlight the ethical aspects of various subjects. Wells Fargo bank (WFB) reached an agreement with regulatory agencies to pay $185 million in penalties for engaging in fraudulent marketing practices.