When past corporate abuse by CEO’s like in the

When a corporation,
regardless of the industry, sets unrealistic goals that are about sales and job
performance, there is always high-risk of
unethical and fraudulent behavior by that corporation’s employees.  This behavior isn’t limited to low-level employees, as there have been past corporate
abuse by CEO’s like in the Enron and savings and loan scandals that accrued
over two decades ago.  The unethical and
fraudulent behavior isn’t just linked to sales goals and job performance though;
greed is another factor as well.  We all
remember the Bernie Madoff Ponzi scheme and the billions he stole from his
investors.  Wells Fargo committed some of
the worst identify theft and fraud crimes a bank could commit against their
customers in history.  “The bank’s employees, in order to meet aggressive,
and perhaps wildly unrealistic, sales targets, fraudulently opened a bank and
credit card accounts, transferred money between those accounts, and created
fake e-mail addresses for online banking accounts to sign up customers for the
bank’s accounts” (Cavico and Mujtaba, 2017, p.4).

Wells Fargo action’s been
unethical and illegal and speaks to the core of the agency problem.  “The agency problem refers to a situation in
which a firm’s managers-the “agents” of the owners-fail to act in the best
interests of the shareholders” (Parnell, 2016. P.100). I believe with any
organization; if you have a leadership
team or even one leader who is unethical, they could single handling bring down
a corporation by their actions.  Granted,
this didn’t happen in Well Fargo’s case, but the public, legal and political
scrutiny that the company endured will take years to recover. In Wells Fargo’s
case, I would argue this was a case of adverse selection, “The inability of
shareholders to identify the precise competencies and personal attributes of
top managers who are hired” (Parnell,
2016, p.100). Shareholders don’t get to hire the leadership team, especially
bank managers, loan officers and low-level tellers.  New hires
could lead to incompetent or dishonest people hired
or promoted into leadership roles, which then could lead to the same
actions that led to fraud and identity
theft at Wells Fargo.

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There was defiantly an
ethical problem with leadership within Wells Fargo that wasn’t just one or two employees; it was a systematic epidemic
within the bank.  “Managerial ethics
refers to an individual’s responsibility to make business decisions that are
legal, honest, moral, and fair” (Parnell, 2016, p.103).  When employees of a bank defraud their
customers, Wells Fargo’s has a culture of corruption problem that needs fixing to
gain the customers trust again.  “Wells
Fargo admitted that employees had opened as many as 2 million accounts without
customer authorization over a five-year period” (Tayan, 2016, p.2).  “Wells Fargo is committed to putting our
customers’ interests first 100 percent of the time, and we regret and take responsibility
for any instances where customers might have received a product that they did not
request” (Tayan, 2016, p.2).  There are
many different perspectives on ethics, and
this case would fall under the justice view of ethics, which “suggests that all
decisions will be made by pre-established rules or guidelines”
(Parnell, 2016, p.107).  Wells Fargo says
they are committed to putting their
customers first, but I guess they forgot about the 2 million customers they
committed fraud by?