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Corruption in a workplace
Corporate crimes and the criminal justice system
Corporate crimes and the criminal justice system
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Many companies have had good reputations for having good business ethics, one of them is Wells Fargo, a financial service company based in San Francisco, California. After all, in 2015 Wells Fargo was listed as the 7th most respected company in the U.S. and some have even gone as far as to state that they are one of the least corrupt and smartest led businesses. However, like all businesses, something hides in the closet and behind the smile of those that say, “Everything is all right.” One of these instances wasn’t that long ago. From 2006 to 2013 for example, some employees felt over-stressed by the amount of work that was needed to be done to meet the company’s aggressive sales goals. Some even claimed that it had almost pushed them to …show more content…
According to a Forbes survey of around 1,000 Wells Fargo customers, 3% were directly affected by the scandal, 14% are still deciding on switching banks while 30% are already on the search. If such happens on the broader scale of Wells Fargo and its customers, the company will be hit hard because of the scandal. Forbes claims that if this holds true for the rest of the company; Wells Fargo could suffer from a loss of almost $100 billion in deposits and $4 billion in revenue for the next year and a half. All because of aggressive goals for a company and people wanting praise for the success of their branch. To make matters worse, around 10,000 small businesses could’ve be harmed by the scandal as well. In such cases, one business owner in California found out that he had several new accounts created. After the discovery, the businessman changed banks from Wells Fargo to Chase. On the other hand, some Wells Fargo employees were talked into selling products to businesses in groups of three, regardless if the business needed them or …show more content…
One person for example made a statement to the Occupational Safety and Health Administration how he was fired from his job at Wells Fargo working as a manager in the wealth management unit of Wells Fargo on the West Coast. OSHA has stated for Wells Fargo to rehire the manager into a similar position and pay around $5.4 million. The manager stated that he was fired from Wells Fargo after reporting various fraud efforts by bankers to his bosses. The manager was then warned that if word got out about the situation he would lose his job. He inevitably lost his job several days later and claimed he was not able to apply for a different job within the banking business since
Wells Fargo account fraud scandal One of the most recent white-collar crimes involved Wells Fargo, a banking and financial services provider. In 2016, San Francisco-based bank Wells Fargo (WFC) employees secretly created millions of unauthorized bank and credit card accounts without permission of their customers. Opening about 1.5 million fraudulent deposit accounts and submitting 565,443 credit card applications allowed Wells Fargo employees to boost their sales targets and receive bonuses. Consequently, customers were wrongly charged fees for accounts they did not know existed. In this business crime scenario, Wells Fargo is involved in paying $185 million in fines and refunding $5 million to affected customers.
As Wells Fargo convicted all the requirements of fraud they are involved to the business crime called fraud, they are liable to their fraud crime. There was a false statement which respectively conducted to the injury to the alleged victim as a result. Wells Fargo has been ordered to pay $185 million in fines, but that's a pittance compared with the $5.6 billion the bank earned in just the second quarter of this year. Meanwhile, the bank's victims weren't just nickel-and-dimed with overdraft and maintenance fees. Many of them took "significant hits" to their credit scores for not staying current on accounts they did not even know about. They will likely have difficulty securing home and car loans at reasonable rates for years to come, simply because their bank decided to defraud
Based on the contingency continuum theory the bank was on the pure accommodation side by doing full apology, by being honest and communicating it to the public. " Stumpf, who will testify at the Sept. 20 hearing, said he was sorry about the scandal. “We deeply regret any situation where a customer got a product they didn’t request,” Stumpf said during an appearance on CNBC’s “Mad Money” on Tuesday." (Puzzanghera, 2016). Then, always following the apology and restitution strategy Wells Fargo put his public first by doing paying full compensation to them. According to Egan, Wells Fargo has reached a $110 million preliminary settlement to compensate all customers who claim the scandal-ridden bank opened fake accounts and other products in their name. Furthermore, they also did some corrective actions by eliminations retail sales goals. “The elimination of product sales goals represents another step to reinforce our service culture, helps ensure that nothing gets in the way of our ability to achieve our mission and is consistent with our commitment to providing a great place to work,” he said. The sales goals will be eliminated starting Jan. 1, Wells Fargo said." According to Puzzanghera, 2016. Concerning, the corrective action the bank went beyond the elimination of retail sale goals they also fired some employees, paid their fined toward the regulatory bodies including the Consumer Financial Protection Bureau(CFPB) and the
Many organizations have been destroyed or heavily damaged financially and took a hit in terms of reputation, for example, Enron. The word Ethics is derived from a Greek word called Ethos, meaning “The character or values particular to a specific person, people, culture or movement” (The American Heritage Dictionary, 2007, p. 295). Ethics has always played and will continue to play a huge role within the corporate world. Ethics is one of the important topics that are debated at lengths without reaching a conclusion, since there isn’t a right or wrong answer. It’s basically depends on how each individual perceives a particular situation. Over the past few years we have seen very poor unethical business practices by companies like Enron, which has affected many stakeholders. Poor unethical practices affect the society in many ways; employees lose their job, investors lose their money, and the country’s economy gets affected. This leads to people start losing confidence in the economy and the organizations that are being run by the so-called “educated” top executives that had one goal in their minds, personal gain. When Enron entered the scene in the mid-1980s, it was little more than a stodgy energy distribution system. Ten years later, it was a multi-billion dollar corporation, considered the poster child of the “new economy” for its willingness to use technology and the Internet in managing energy. Fifteen years later, the company is filing for bankruptcy on the heels of a massive financial collapse, likely the largest in corporate America’s history. As this paper is being written, the scope of Enron collapse is still being researched, poked and prodded. It will take years to determine what, exactly; the impact of the demise of this energy giant will be both on the industry and the
Key stakeholders are owners, directors, employees, and the community that the organization draws it resources businessdictionary.com,2016). Out of the 1000 Wells Fargo customers that were surveyed 3% stated that they were personally affected by the scandal and 14% of them stated that they have changed banks while 30% of them were currently looking to switch. Studies predict that Wells Fargo could lose about $99 billion in deposits and $4 billion in revenue because of customers rejecting to do business. Individual customers weren’t the only ones that were affect by the scandal but similarly 10,000 small businesses (Razin, 2016). I believe that the owners will be affected as well because of profit losses that will eventually affect Wells Fargo shares and the employees were affected after 5,300 of were fired (Razin,
The movie “Glengarry Glen Ross” presented a series of ethical dilemmas that surround a group of salesmen working for a real estate company. The value of business ethics was clearly undermined and ignored in the movie as the salesmen find alternatives to keep their jobs. The movie is very effective in illustrating how unethical business practices can easily exist in the business world. Most of the time, unethical business practices remain strong in the business world because of the culture that exists within companies. In this film, the sudden demands from management forced employees to become irrational and commit unethical business practices. In fear of losing their jobs, employees were pressured to increase sales despite possible ethical ramifications. From the film, it is right to conclude that a business transaction should only be executed after all legal and ethical ramifications have been considered; and also if it will be determined legal and ethical to society.
They said to the people who support Wells Fargo, “if you feel like you received an account that you didn’t want, come in and see us and we will make it right” (Peter Conti-Brown, “Why Wells Fargo Might Not Survive its Fake Accounts Scandal”). I believe that Wells should do more than just talk to their customers if they experienced one of the fake numbers. It seems like they were and still are taking about this scandal like it wasn’t a big deal, when the case is still relevant today. Like I briefly mentioned above, the most unethical behavior about this is the fact that not just a couple members were involved. There were a couple thousand employees involved who created new bank and credit card accounts for customers without their
Explain the connection between the economic model of corporate social responsibility and “free market” or “neoclassical” economic theory.
The Wells Fargo scandal started in 2016 when it came to light that starting back in 2011 employees created over 1.5 million fraudulent bank
For this paper Washington Mutual has been selected to show how the ethical decision making process can be achieve. When it comes to business ethics in the workplace Washington Mutual has designed what can be considered a well balanced workplace with behaviors that are aligned with their moral values and business ethics. Business ethics are sometimes depicted as resolving conflicts where one option can appear to be the correct choice. There are many different ethical dilemmas that are faced by managers and leaders everyday that are highly complex and have no clear choice or guidelines to assist in making the choices for resolution. There are times when an employee has to decide whether or not to cheat, lie, steal, or break their contract. These ethical decisions are real-life situations where they are forced to make on a daily basis. This is why it is ultimately important that all employee know the six steps to ethical decision making that the company uses.
The term “ethical business” is seen, by many people, as an oxymoron. This is because a business’s main objective is to make as much money as possible. Making the most money possible, however, can often lead to unethical actions. Companies like Enron, WorldCom, and Satyam have been the posterchildren for how corporations’ greed lead to unethical practices. In recent times however, companies have been accused of being unethical based on, not how they manage their finances, but on how they treat the society that they operate in. People have started to realize that the damage companies have been doing to the world around them is more impactful and far worse than any financial fraud that these companies might be engaging in. Events like the BP oil
During the past year Wells Fargo, a well-recognized bank of the United States, has been trying to clean its name and the mess it got itself into, when it was brought to the public that the bank was involved in generating fraudulent checking and savings accounts for its clients without their knowledge or their authorization. “The way it worked was that employees moved funds from customers' existing accounts into newly-created ones without their knowledge or consent”
In the aftermath of Enron, Washington Mutual Bank, TYCO, and World Comm these companies went against the grain of what good ethical behavior is and what their respective company’s code of ethics were. The criminal justice system has made it clear that it will not allow companies and their executives to get away with the misuse of public trust by allowing them to make themselves rich at the expense of the employee. Where these crimes are both ethically and morally wrong, the CEO’s of major corporations are being punished by a ...
Ethical business practices include assuring that the highest legal and moral standards are observed in your relationships with the people in your business community. This includes the most important person in your business, your customer. Short term profit at the cost of losing a customer is long term death for your business.
Ethics is the study of right or wrong and the morality of the choices that individuals make. That basicly means the set of morals or responsibility that a person, group, or field have. Ethics can also be classified as code of morals. In business there are ethics that portray to business. These are called business ethics, business ethics just happen to be the application of ethics, morals, into the business field. Some examples of business ethics are obeying all rules and regulations even when nobody 's looking, which is pretty self explanatory, you shouldn’t be breaking rules. Even if it is as simple as washing your hands after you use the restroom or straight up lying to your customers, they are the ones making you money so if they find out