Wells Fargo Dubious Accounts Scandal Analysis

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Although goals stimulate employee and organizational performance, indiscriminate and rigidly set objectives encourage the nurture of inappropriate business practices. Wells Fargo’s fake accounts fraud highlights the tragedy of incentivizing achievements and pressuring staff to accomplish aggressive targets and predetermined bottom lines. From 2002 to 2016, America’s fourth-largest bank encouraged personnel to use devious means to achieve unrealistic sales quotas, subsequently jeopardizing the institution’s time-hallowed reputation (Flitter & Cowley, 2019; Cavico & Mujtaba, 2017).

According to Singh and Twalo (2015), staffs misconduct and unethical behavior could irreparably imperil a company’s eminent standing in the public eye and incur hefty civil and criminal penalties. Although goal-setting is an indispensable pillar in enhancing productivity, excessive managerial pressure on subordinates spurs moral disengagement and the eventual corrosion of organizational culture.

Business Targets, Ethics, and Employee Performance

Despite the established ethical cultures in organizations, overly aggressive targets ultimately result in fraudulent business practices. Welsh et al. (2020) assert that target-setting implicitly alters the moral reasoning processes attached to goal attainment by stimulating a strong desire to achieve the set objectives. As the business environment becomes increasingly competitive, executives and other stakeholders are continually raising their subordinates’ performance expectations. This implies that managers play an influential role in entrenching ethical conduct by creating conducive environments, which do not predispose the employees to morally comprising situations and lead to the organization’s reputational damage (Kabeyi, 2018).

For instance, the unrealistic and indiscriminate ambitions prescribed by the management and shareholders on employees immensely contributed to the Enron scandal by nurturing dishonesty and deceitful engagements (Hosseini & Mahesh, 2016). Indeed, Enron Corporation’s scandal accentuates the intertwined nature of business ethics and sustainability (Lashley, 2016; Ugoani, 2019). In this regard, an entity’s ethical culture can be impaired by the managerial failure of imposing impractical or unattainable quotas. Therefore, it is imperative for organizations to critically evaluate their aims to determine their practicality and attainability.

Sales targets are important components of the business revenue generation plan. Moreover, as an integrated strategic activity, they help the management augment the firm’s vision and correctly map the growth potential. Consequently, organizations place a disproportionate focus and emphasis on sales, effectively attracting massive risk and reputational damage. The problem is compounded by the poorly planned incentive schemes, pegged on the employees’ revenue generation accomplishments. This implies that such programs may motivate staff to circumvent the laid out ethical considerations to meet the ambitious targets.

For instance, Wells Fargo’s high-pressure income creation quota encouraged its subordinates to engage in inappropriate conduct and deceptive tactics by tying their job security and bonuses to performance. According to Daumiller and Janke (2019), cheating is promoted by unrealistic goals which can be achieved by devious and deceitful conduct. However, organizations that engage in such practices incur significant and often irreparable reputational impairment due to the perceived focus on bottom lines instead of service delivery. Thus, Wells Fargo’s ethical malpractice was primarily driven by a poorly developed incentive scheme and linking the employee tenure to their performance.

Evaluation of Wells Fargo’s Reputation Repair

One of America’s most prestigious brands, Wells Fargo bank built its longstanding reputation through the years. The positive image suffered significant damage following the revelation that employees created millions of fraudulent bank and credit card accounts using the details of the existing customers without their knowledge and consent from 2002 to 2016 (Flitter & Cowley, 2019). According to Munyoro and Magada (2016), reputation management is an indispensable corporate function as a firm’s public image contributes to an estimated 25% of its market value. The company has embarked on ambitious damage control and reputation redemption scheme.

While all corporations are vulnerable to scandals and malpractices which adversely impair the public’s perception, the diverse recovery strategies determine the degree to which the negative view is overturned. Entities that experience the misconduct of Well Fargo’s magnitude should undergo extreme and radical transformations if they intend to fully upend the disrepute. Wells Fargo subverted the redemption program by failing to implement revolutionary and comprehensive rectifications, refusing to hold the executives accountable, and thoroughly uprooting the policies that nurtured the scandal.

Although Wells Fargo has publicized reports about transforming the culture that bred widespread misconduct, the overly aggressive managerial tendencies are yet to be uprooted. As a result, the intended reputation redemption endeavor has not led to the realization of the desired changes. According to Flitter and Cowley (2019), the workers continue to operate under immense pressure to mint additional revenue from customers.

Other staffs report witnessing some of their colleagues circumventing the established internal rules, just to meet the ambitious performance quotas. Although it is arguable that some of these practices are enabled by departmental and operational managers without the knowledge of senior executives, the structure of the internal systems discourages whistleblowing. The botched damage control is also manifested by the changed sales incentives as opposed to a complete overhaul.

Executives’ Responsibility for the Behavior of Customer-Facing Employees

Organizational executives are responsible for the behavior of the subordinates and the customer-facing employees. Chadegani and Jari (2016) assert that managers play an influential role in molding the organizational environment and entrenching an ethical culture that minimizes employees’ exposure to scenarios that could trigger malpractice. This implies that leaders significantly influence the conduct of their customer-facing employees.

For instance, Well Fargo’s high-pressure performance demands imposed on subordinates through slogans such as Well Fargo’s “eight is great” encouraged personnel to deploy devious strategies to secure their jobs and earn hefty bonuses (Witman, 2018). Additionally, the executives’ responsibility for the conduct of the frontline workers is captured by the policies, standards, and objectives developed by the managers and designed to direct and regulate the staffs’ behavior. Therefore, the top leaders should be responsible for the conduct of their subordinates.

The Ethical Dilemma in Wells Fargo Account Opening Scandal

Wells Fargo’s accounting opening scandal is a classical presentation of an ethical paradox. Figar and Dordevic (2016) argue that a moral dilemma entails a situation where an agent or a decision-maker faces conflicting alternatives, all of which are underlined by undesirable repercussions. Regarding Wells Fargo’s fraud, the employees encountered the option of either illegally registering customers without their consent or losing the incentives and even their jobs. Executing one choice would unmistakably result in the transgression of the other. This implies that the staff was imperatively compelled to enroll clients for unsolicited services and products, jeopardizing personal moral standings or being fired for falling short of performance expectations. Therefore, Wells Fargo is a classical scenario of an ethical dilemma.


Conclusively, ethics are important components in the conduct of business. Failure to operate results in numerous consequences, including attracting criminal and civil penalties, as well as suffering reputational damage. While regular operations such as goal-setting could be seemingly harmless, Wells Fargo’s scenario highlights the dangers of poor developing practices. In most instances, the imperiled negative public image, often built through the years, takes great and sincere efforts to rebuild. It is imperative for company executives to create an environment that promotes ethical conduct and eliminates instances or policies which predispose employees to malpractices.

Wells Fargo’s accounts opening scandal provides critical lessons for leaders and cements their responsibility for the conduct of their frontline personnel.


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Flitter, E., & Cowley, S (2019). Wells Fargo says its culture has changed. Some employees disagree. The New York Times. Web.

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Welsh, D. T., Baer, M. D., Sessions, H., & Garud, N. (2020). Motivated to disengage: The ethical consequences of goal commitment and moral disengagement in goal setting. Journal of Organizational Behavior, 41(7), 663–677. Web.

Witman, P. D. (2018). Teaching case “what gets measured, gets managed”: The Wells Fargo account opening scandal. Journal of Information Systems Education, 29(3), 131–138.

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