CASE 10

Case 10 summary:

·         Wells Fargo has been accused and convicted of fraudulent behavior, selling clients by-product, opening accounts and charging unknowing customers extra for services they did not need

·         The fraudulent behavior was forced upon workers through managerial pressure and unrealistic sales targets

·         Whistleblowers were fired

·         Workers were forced to work overtime unpaid to reach targets

·         CEO was forced to step down and over 5000 people were fired

·         Many fear similar behavior is standard in banks across the nation

Challenges:

·         Setting too high sales targets leads to staff cutting corners or acting in a fraudulent way

·         Managers should always be aware of unethical behavior and react if they see any

Theory, Model and Key Concept  

The Wells Fargo case is a text-book example of bad management and HR decisions. The higher managers have set unrealistic sales targets that the lower and middle managers than have to turn into action. With pressure to succeed, they start allowing and even preferring unethical behavior. The company had a system in place for ensuring that whistle blowing was available, but the HR department then proceeded to terminate or relocate any whistleblowers once a complaint was filed. In addition, working hours weren’t monitored, staff wasn’t duly paid and there have been many examples of misconduct by manager and the HR department. Now the company’s bad practices have been brought out in clear daylight, and the picture is not pretty. What’s more, the banking industry is now starting to reveal that similar practices exists in many other banks and companies as well.

In Finland, workplaces specialized in selling via phone, and cold calling, have similarly bad reputation. Many have filed complaints about companies not paying wages, of discriminative behavior, harassment and unrealistic sales goals. Especially young people often fall victim of unethical companies, taking advantage. Many you people do not know their rights, are afraid to speak out, and fear that if they do speak up they will get fired and loose the little income that they do have. The businesses have now been under intense scrutiny and observation by the government officials, and reports and complaints have been reduced. (Yle 2015)

Many companies have introduced portals for whistleblowers to raise their concerns about unethical behavior. These portals have been set out to make sure, that reporting to a higher manager is not the only way to be heard about an issue in a company. Many countries have national laws, for protecting whistleblowers. In the Wells Fargo case, the whistleblowers were identified and consecutively fired, which is the exact opposite of the intended effect of a portal for whistleblowers. The European Commission, is looking into an EU wide legislation to protect whistleblowers, as more and more companies turn global. An EU wide legislation is curcial, when it comes to protecting whistleblowers in a new globalized world. This can also be useful, especially in terms of whistleblowing on tax evasion, corruption and fraud. According to the EU, whistleblowers are providing a great service for the Union, protecting democracy and public interest. (D. Vincenti, 2017) 

Literature:

D. Vincenti, 2017, “Commission calls for input on whistleblower protection”, EurActive https://www.euractiv.com/section/politics/news/commission-calls-for-input-on-whistleblowers-protection/ (12.3.2017)

Yle, 2015, ” Työtä ilman palkkaa, epäasiallista kohtelua ja häirintää – tehovalvonta paljasti puhelinmyynnissä rehottavat ongelmat, Yle,  http://yle.fi/uutiset/3-8086070 (12.3.17)