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The lapse in judgement of the leadership at Wells Fargo is well documented, and serves as a reminder of the magnitude of damage that can be done to an organization if managers sway from their ethical principles in order to increase profits. What we saw in this case is that between 2011 and 2015, Wells Fargo employee's created nearly 2 million fake accounts for existing customers (Witman, 2018, Page 132). Many of these accounts were created without the customer's knowledge or consent. The purpose of creating these accounts was to help the company meet unattainable sales goals, but the positive effects of these inflated sales were short lived. Wells Fargo ultimately was forced to pay $185 million in fines in 2016, and this event left a major stain on their once stellar reputation. Even more troubling is the effect that these practices had on their customers. Many customers suffered from negative impacts to their credit score due to these practices, and it would take years for them to get their credit back to a manageable level.

If I were to be named the new CEO of this organization, and was to take on the task of re-introducing the ethical principles that made Wells Fargo one of the leading companies in the financial service industry, I would lean heavily on the ethical principles we have learned in this class. I would start by identifying three practices that I would assign the highest priority. These practices are; providing training to all managers on the regulatory requirements for the banking industry, creating accurate financial statements, and creating manageable sales goals. I would start with the management training, because due to consistently bad guidance from the executive level of this organization, there is likely a disconnect between the daily operations of these managers and what is required by law. I would begin this training with an overview of the Generally Accepted Accounting Principles (GAAP), which is the accepted body of guidance for business accounting the U.S. (Gilbert, 2026, Page 214). Next I would assume that all previous accounting statements are incorrect and request that updated statements be created. This is important because we need to see what the actual status of the company is before we could set realistic sales goals. These financial statements would include; the balance sheet, the income statement, and the cash flow statement (Gilbert, 2016, Page 212). Once I had a clear picture of what the company is capable of, I would set conservative sales goals that will allow managers to achieve results while not compromising their ethics.

As we look at the big picture of how this organization got to its current state, we see that the Wells Fargo corporate culture has encouraged unethical practices by setting sales goals that could not be achieved thorough ethical practices. In order to create more sustainable environment, we would need to change the corporate culture to one that praises the truth in financial reporting, even if the results are less than expected. It is much easier to make organizational decisions with accurate data. That data doesn't always show us what we want to see in relation to meeting organizational goals. However it is still important for senior executives to know the truth about the company's financial health. It is better to receive data that is correct but does not meet the goals that were set for that year, than to receive bad information that makes the company look healthy in the short term but ultimately leads to $185 million in fines and irreparable damage to the company's reputation.

References

Witman, Paul (2018, n.d.).Teaching Case "What Gets Measured, Gets Managed" The Wells Fargo Account Opening Scandal. Journal of Information Systems Education. Retrieved 2023, February 11. https://eds-p-ebscohost-com.ezproxy.umgc.edu/eds/detail/detail?vid=0&sid=5b1052ba-3d01-44b9-90dd-7e68be0f690c%40redis&bdata=JnNpdGU9ZWRzLWxpdmUmc2NvcGU9c2l0ZQ%3d%3d#AN=131840330&db=ehh

Gilbert, Joseph (2016, n.d.).Ethics for Managers: Philosophical Foundations and Business Realities, Chapter 5. Retrieved 2023, February 11. https://eds-p-ebscohost-com.ezproxy.umgc.edu/eds/ebookviewer/ebook?sid=af4ebaa6-5fe8-4e84-a86c-feb9b8fa5c89%40redis&ppid=pp_210&vid=0&format=EB