Running head: FINAL ARTIFACT 1

Final Artifact

Emily Guzman

South Texas College

3332-Behavior/Ethics/Leadership 2

Professor Aaron Wilson

December 7, 2019
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1. What are the main traits exhibited by Stumpf in the case? Use the Aristotelian theory of virtues

to determine whether these traits are virtues or vices.

Wells Fargo is known as a trusting bank that helped millions of people with their banking

needs. However, that soon came to an end for some citizens back in 2016. Employees of Wells

Fargo created more than 2 million illegal customer accounts in exchange for praise, recognition,

and of course bonuses. CEO of Wells Fargo, John Stumpf, goal for all employees was to push all

products to every customer who walked into the banks. Because of this, every employee across

the nation was stressed to meet quarterly goals and decided to take the easy way out by creating

fake accounts.

The Wells Fargo banking scandal was probably one of the most embarrassing incidents

for a well-known corporation to have experienced. According to the article Wells Fargo Banking

Scandal – Why Culture Matters, the banking scandal involved more than 5,300 employees who

were committing fraudulent malpractices (Santa Clara University 2018). The employees

involved were terminated by the company. The scandal had a major impact on the organization,

however, not only was the organization affected, but also millions of people and their bank

accounts were meddled in the affair. The CEO was not aware of the unethical behavior that was

happening behind closed doors and put his blame on a “few bad apples” as the article mentions

(Santa Clara University 2018). Soon after, the CEO submitted his resignation and left the

organization with a hefty amount of cash in his pocket.

As a CEO for a major corporation, I believe that Mr. John Stumpf’s traits for handling

this matter are selfish, hypocritical, greedy, and he portrayed cowardice. These traits, however,

have no relation to the Aristotelian theory of virtues. Aristotle, a Greek philosopher, believed that
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we should act on our virtues and follow moral behavior. Ideally, a true leader would follow

virtues such as courage, honor, and truthfulness, as portrayed in the 12 virtues. The CEO did not

possess any of these virtues and solely focused on pure greediness.

The reason why these traits would be vices is because virtues are what makes up a person

based on their moral excellence. For one, if the CEO was considerate towards his employees, the

employees would have not been pressurized into committing fraud just to make the company

look good. Secondly, for holding a major position in the company, he should have not been

hypocritical, and put the blame on the employees. A real leader would have taken full ownership

and offered a statement on how they would do better for future purposes and what they would do

to resolve the issue. Instead, he submitted his resignation to the board and left the organization

fully compensated without a worry to the affected people. This action displayed cowardice and in

no way is it being a real leader. Lastly, in my opinion, I believe that the CEO was fully aware of

the malpractices that were going on in the organization. If they started in 2002, there should be

data reports of increased accounts from all branches. This should’ve raised suspicion from the

start but was waved by the CEO. Virtues allow us to be moral, and vices like the CEO possesses,

will corrupt you.

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2. Which Decision Model should have been used by Stumpf to make the best decision? Why?

CEO John Stumpf acted on his own selfish greed to make Wells Fargo well known.

Although today, they’re well known for all the wrong reasons. The Wells Fargo bank scandal is

infamous for its illicit affairs on creating more than 2 million bank accounts that apprehended

over 5,300 employees who partook in this scandal. The scandal received widespread attention

from all over the nation and customers started to worry about their secured account information.

As being the CEO of a major organization, Mr. Stumpf handled the situation incorrectly. A real

leader would not have acted out and resign to let the company fail. A true leader would offer an

apology to the millions affected and created a mission statement on how the matter was going to

be repaired. The CEO failed to use his decision-making skills, and instead allowed the company

to suffer tremendously. If the CEO would’ve developed a strategy on how to make effective

decisions for the company, then the company would’ve immediately prospered.

The decision model that the CEO could’ve easily followed is by identifying the

company’s goals, gathering information that considers all options, consider the consequences to

every action, make decisions that are suitable, and lastly, evaluate every decision. The first step,

identifying the company’s goals, the CEO originally had “Eight is great”, as mentioned in Wells

Fargo Banking Scandal – Why Culture Matters, as the company’s motto (Santa Clara University

2017). However, the CEO should’ve came up with a different objective, one that would not

require employees to feel pressurized into making fake accounts. He could’ve developed a

reward system, not like the one he previously had, but one that would allow employees to come

up with their own ideas on how to gain new accounts and reward them for attaining new ones.

Once we’ve identified the company’s goals, the second step would be to gather information that

considers all possible options. By doing this, the CEO would be able to use any information that
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is useful such as looking at data and sales reports and go based off on that. Once he considers all

options and looks at the possible outcomes, the CEO would be able to decide on which direction

that company should aim for. The third step consider the consequences to every action, the CEO

should have immediately noticed the increased number of new accounts and called for corrective

action. Because of the failed action, the tarnished reputation of Wells Fargo was diminished.

Now, the CEO needs to be vigilant on all its branches and instruct order to the first-line

supervisors that are responsible at every branch. What will help this is by demonstrating effective

communication throughout all branches.

The fourth step, making decisions that are suitable for the company, the CEO needs to

review every decision, action, and objective and determine if they’re appropriate for the

organization. It is crucial that all objectives are satisfactory, and if it will be received positively.

Lastly, evaluating all decisions, once the CEO has made his final decision, it’s best to review and

evaluate it once more. This step is important to ensure that all decisions that are made to benefit

the company will work. With patience, the final outcome should be achieved making the

business effective and efficient. Also, not only is this the last step, it should allow the CEO to

develop their decision-making skills for the future.

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3.What differences do you find between the leadership styles of Stumpf and Johnson? 

As mentioned above, CEO John Stumpf portrayed cowardly actions, and immediately left

the company when tensions were high. However, another company, Starbucks, also experienced

another scandal that involved two men who did not purchase anything and were waiting for a

colleague to enter the business. They immediately received backlash from the store manager who

forced them to leave the premises because they did not purchase anything. The men refused to

leave and soon after, the store manager contacted the authorities to have the men arrested. This

scandal did receive media attention and many people question their loyalty to their famous coffee

supplier. CEO of Starbucks, Kevin Johnson, issued a public apology where he expresses his

concerns over the unfair treatment that the men experienced. Unlike the CEO of Wells Fargo, Mr.

Johnson did not blame employees, he however, focused on what improvements needed to be

made for the entire corporation, and issued a worldwide training. The training required for all

Starbucks to be closed and that every employee attend the mandatory training.

CEO Johnson took initiative and demonstrated great leadership skills that every leader

should take into consideration. He was not hypocritical, nor did he justify his actions on the

organization. Being a real leader, you must show that you genuinely care for the company and

the employees that are involved. And that’s exactly what Mr. Johnson did, he took ownership of

the problems and decided to take direct action to give the best customer satisfaction. He took

care of the matter and changed the companies mission statement. Now, customers are able to go

inside any Starbucks and are free to sit and enjoy the environment without having to purchase

anything. CEO John Stumpf pushed unrealistic goals that pressurized employees to meet sales

quotas. He failed to issue a heartfelt statement and did not change the values of the company. He
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does not show the characteristics and qualities of a true leader. Being a leader, you need to show

that you’re dedicated and committed into bettering the organization.

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4. Suppose that you are appointed CEO at Wells Fargo. What can you do as a leader to encourage

ethical conduct? What is the context of your company? 

If I was appointed CEO of Wells Fargo, I would not follow the example of Mr. Stumpf

set. First, I will ensure that every employee has clear expectations so that way they will be

promoting ethical behavior in the workplace. It’s important to treat every person and customer

with respect, and no unethical behavior will be tolerated. Which CEO Stumpf failed to notice

from the very start. If there is unethical behavior, I will take disciplinary action to immediately

correct the problem before it gets out of hand. Next, as a real leader, I will lead by example to

ensure that my employees will model my behavior. As soon as my actions reflect on my

employees, my employees will be able to demonstrate their skills on the customers in order to

provide exceptional experience. As long as I show guidance, it will mull over to my employees

that will help them progress their leadership skills.

Also, if I am appointed CEO, I would like to reward my team for achieving their goals.

These goals will not be impractical, and they will be attainable if they work together as a team.

These rewards will vary, they can take the form as incentives, bonuses, or an extra day off. I just

want my employees to feel appreciated and valued and know that their hard work is taking into

consideration. In order to ensure that first-line supervisors are involved with their team, I will

like to have companywide mandatory trainings. These trainings should allow managers to

develop a close interpersonal relationship with their team. Employees from all branches should

be able to approach any supervisor if they have a problem or concern. They should not feel afraid

to speak up. Lastly, I want my company to hire the best employees, just so that my company will

be efficient and effective.

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5. Develop a strategy to create a social network at Wells Fargo to encourage ethical conduct.

Social networking, today, is extremely important to have in an organization. It helps you

build relationships with people, or businesses, which could possibly lead to potential clients and

future customers. Social networking would be beneficial for Wells Fargo because we want to

increase the number of clients and inform them that Wells Fargo can also provide ethical

practices. It’s important that Wells Fargo incorporates ethical practices to gain clientele back.

The strategy that I will develop to encourage ethical conduct will be by first having

communication all throughout the organization. If there is communication throughout the

organization, people will have accurate information to share regarding the company. We need to

ensure that everybody will be passing on the information, which will make the company look

good. With communication, it encourages collaborations and will lead to innovation. Along with

communication, the second step would be to also attract people through social media. The use of

social media has evolved throughout the years, which now, it makes it easier to connect with

people. If Wells Fargo uses social media to connect with potential clients, then it will allow them

to become more visible to the public. Having public profiles will grant full attention to the

company, and people will have the company on their mind.

The third step to the strategy would be to spend time with other people outside of work. If

we associate ourselves with positive people, we will be able learn their experiences along with

their expectations, so that way we can incorporate it in our company. If we find out what people

are looking for, it will be a huge advantage so we can make improvements on the areas that need

it the most. With the steps provided, I can ensure that Wells Fargo will be on its way to success.

We just need to listen to our customers’ needs and wants and take that into consideration.
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6. Some employees at Wells Fargo claim that the immense pressure made them engage in

unethical behaviors. Do you agree? Use Milgram and Ash's experiments to answer this question.

In my opinion, I believe the employees who participated in the unethical behaviors were

coerced by management. If they did not cooperate, I believe that their job might’ve been at stake.

With this scandal, it reminds me how closely related it is with Milgram’s experiments. In the

Milgram experiments, participants had to undergo a study to see how much the participants had

to endure by inflicting pain onto each other. The participants had to shock other participants, but

because they were instructed to do so by an authoritative figure.

Just like the employees who were pressurized into creating fake accounts to meet the

sales goals, they were instructed to do so by an authoritative figure, their supervisor. They did not

have the confidence to face off someone who is superior to them. They were easily influenced by

social pressure to hit the company’s targets. They were scared to voice their opinions, because

they felt like they were going to get into trouble if they did not follow through with the creation

of the accounts.

For this to have been prevented, leaders, including the CEO, should have not abused their

power, no matter the amount of power they possess. In no way, is that the right way of being a

true leader. The employees need to feel comfortable in speaking out in what is morally wrong

and report the misconduct to HR. Leaders should lead by example because they do have an

impact on the organization, and they should be making moral decisions for the company.
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References

Santa Clara University. (2018, August 29). The CEO of Starbucks and the Practice of Ethical

xxxxxxLeadership. Retrieved December 7, 2019, from https://www.scu.edu

University of Minnesota. (2010). Organizational Behavior. Retrieved on December 7, 2019.