Ethical Decision-Making
Your review of the literature and professional ethics codes
addresses the importance of resolving ethical dilemmas systematically and
following established decision-making steps to resolve dilemmas effectively. As
ethical codes do not provide specific solutions for ethical dilemmas, applying
established ethical decision-making steps along with an understanding of
established ethical codes is essential. Taking a systematic approach to ethical
decision-making contributes to effective professional practice and ethical
resolutions consistent with clients’ best interests.
In a 1,050- to 1,400-word (or 3- to 4-page) paper (excluding
references and title page), based on the scenario below, discuss how you would
apply systematic steps toward a resolution of the dilemma as a consultant hired
by Wells Fargo. Discuss the specific steps of the decision-making model you
would take in making an ethical decision. How might you include the client in
making your decisions? In what way or ways is accounting for the ethics code
important for decision-making? To support your responses, in addition to the
required readings, cite at least two scholarly references.
Scenario Wells Fargo was the darling of the banking industry,
with some of the highest returns on equity in the sector and a soaring stock
price. Top management touted the company’s lead in “cross-selling”: the sale of
additional products to existing customers. “Eight is great,” as in eight Wells
Fargo products for every customer, was CEO John Stumpf’s mantra.
In September 2016, Wells Fargo announced that it was paying
$185 million in fines for the creation of over 2 million unauthorized customer
accounts. It soon came to light that the pressure on employees to hit sales
quotas was immense: hourly tracking, pressure from supervisors to engage in
unethical behavior, and a compensation system based heavily on bonuses.
Wells Fargo also confirmed that it had fired over 5,300
employees over the past few years related to shady sales practices. CEO John
Stumpf claimed that the scandal was the result of a few bad apples who did not
honor the company’s values and that there were no incentives to commit
unethical behavior. The board initially stood behind the CEO, but soon after
received his resignation and “clawed back” millions of dollars in his
compensation.
Further reporting found more troubling information. Many
employees had quit under the immense pressure to engage in unethical sales
practices, and some were even fired for reporting misconduct through the
company’s ethics hotline. Senior leadership was aware of these aggressive sales
practices as far back as 2004, with incidents as far back as 2002 identified.
The Board of Directors commissioned an independent investigation
that identified cultural, structural, and leadership issues as root causes of
the improper sales practices. The report cites the wayward sales culture and
performance management system; the decentralized corporate structure that gave
too much autonomy to the division’s leaders; and the unwillingness of
leadership to evaluate the sales model, given its longtime success for the
company.
