Unethical Business Practices At Wells Fargo

The behavior of the leadership group at Wells Fargo during the time of the scandal was strictly goal-oriented. They were initially unaware of any issues regarding the unethical practices. The leadership team ignored the red flags and failed to react fast enough to the crisis regarding the opening of over two million phony accounts. This occurred due to the corporate culture at Wells Fargo focusing primarily on a high-pressure sales environment that ultimately pushed employees to create the fake accounts. The executive team members refused to acknowledge the root problems of the scandal, citing that the fraud was a small isolated incident. The CEO, John Stumpf confirmed that the Wells Fargo leaders were clueless and had no idea that bank customers could be hit with fees for the phony accounts

There was an underlined focus from the leadership team centered on sales goals and incentives. While this type of transactional leadership is proven by rewarding employees for meeting goals, achievements, etc. and reprimanding those that do not meet goals or underachieve. The bases only is not enough, there have to be steps in place to make sure that employee are also upholding ethical practices (Kinicki & Fugate, 2016). Managers instilled fear into the employees, who were pressured and intimidated to meet enormous sales goals, even if it meant committing illegal acts. Employees who attempted to address the bad practices and intimidating environment where not taken serious, disheartened, or even terminated. Whistleblowers allege to have been terminated after bringing to the forefront reports of unethical and illegal practices. These all created an environment that sent a message to it employees to not report them and that the bank did not care. The mindset that was passed along was that the CEO only cared about the outcome, not the process or what it took to get it (Ochs,