Thinkabout two environments you have experienced.
- The first environment is one that did not confront the brutal facts, where the people (and the truth) were not heard.
- Thesecond environment is one that did confront the brutal facts, wherepeople had a tremendous opportunity to be heard.
Whataccounts for the difference between the two environments? If you do not havethis life experience you are not off the hook—you will need to interview aleader who has these experiences and report on that. What does the contrastteach us about how to construct an environment where the truth is heard? Usingstrong Biblical support, explain how you relate this to your ChristianWorldview? Does your Christian Worldview help you develop this environment? Howdoes this relate to the ethical components of the Meese and Ortmeier text?
These replies are from a previous discussion boards
#1 from Ryan Collins
n today’s society, technology is advancing as fast as the population is growing. The constant change in society dictates the organizations structure and path to either success or failure. Leadership is vital in the initiation and process of moving an organization forward in keeping up with competition or even being the leader in the respective market. To answer the question if Collins was incorrect regarding Wells Fargo is debatable due to the circumstances of the behind the scene aspects, which were not public knowledge until publicized.
As Paul stated in Titus 1:7 (NIV) “Since an overseer manages God’s household, he must be blameless not overbearing, not quick tempered, not given to drunkenness, not violent, not pursuing dishonest gain.” This passage is relevant to the Wells Fargo leadership and initial perspective of Jim Collins. In the initial research of Collins, the apparent facts to including the Dow along with the profits reported, I believe Collins was on point pertaining to the initial research and facts present. The perspective of Collins on the reporting of Wells Fargo’s successes after 2001 derives from his statement of “build enduring greatness through a paradoxical blend of personal humility and professional will” (Wexler, Wycoff, & Fischer, 2007, p. 6).
Looking at the imperative events which took place during the early 2000’s changed the banking aspect and societies approaches on life in general. The devastating event of terrorism on September 11 may have been the trigger event. This event may have encouraging the spike in Wells Fargo’s success due to diversion of the public to enact the lack of integrity triggering uncommon business practices which came back to haunt Wells Fargo. Even if Collins misinterpreted the success of Wells Fargo, the discrepancy was hidden, and the facts apparent to Collins allowed for Wells Fargo to be a part of the 11 successful companies.
According to Collins (2001), the hedgehog concept derives a cycle from good to great insinuating success to the doom loop which is the downfall of an organization relevant to leadership or practices (p.16). The internal structure of Wells Fargo was an imminent result for the Hedgehog Concept to go awry due to the lack of integrity and core values demonstrated by the leadership. The Hedgehog Concept went awry, as soon as the organization strayed from the mission statement enabling scandals and the destruction of organizations reputation to include the lack of trust from clients/customers. In reference to the Hedgehog Concept, Collins stated “It is an understanding of what you can be the best at. The distinction is absolutely crucial” (Wexler, Wycoff, & Fischer, 2007, p. 15), which is the total opposite result of the path Wells Fargo leadership ran the operations.
The downward fall of Wells Fargo derived from internal criminal aspects deriving from the top down. The leaderships lack of knowledge or worse case knowledge of criminal intents within one’s organization lead to the failure to the organization. The deviation of mission statement and goals of the leadership led to the decline of profit per employee. The loss of profit as a top bank in the respective arena along with the loss of confidence to the investors of the bank is a perfect equation for failure contradicting the reporting.
#2 from Shockley
In September 2016, Wells Fargo’s scandalous practices came to be known. It was revealed that bank employees were opening bank accounts, transferring money, and signing up for different services in customers’ names without the customers consenting to these activities. These extra accounts were generating fees payable to the bank. It is alleged that these illegal and unethical activities were done due to aggressive, impossible to meet sales quotas placed on employees. Employees were also trained to use fake email addresses and phone numbers when customers failed to provide one. There was a culture permeating Wells Fargo that if an employee was not cheating then he would not meet the numbers required to remain employed at the company (Cavico & Mutjaba, 2017, p. 4).
Jim Collins’ research focused on the numbers, so he was not wrong, but he did misinterpret the root of the numbers. When he did his examination, he saw a company that utilized the Hedgehog Concept and started producing exemplary numbers. “Then the Wells Fargo team asked itself, ‘What can we potentially do better than any other company?’ The brutal fact was that Wells Fargo would never be the best global bank in the world – and so the leadership team pulled the plug on the vast majority of the bank’s international operations” (Collins, 2001). This action appears to be the perfect example of the Hedgehog Concept. The company abandoned something it knew it would never be able to become the best at. The company then focused on “profit per employee” which they appeared to be the best at until their fraudulent activities surfaced.
Profit per employee practices can be a recipe for disaster without attentive leadership. “Without proper safeguards, incentive-based compensation arrangements in financial institutions may encourage excessive risk-taking by employees, leading to serious financial loss for financial institutions…These compensation arrangements were based on short-term revenue, and thereby incentivized employees to expose the financial institution to more risk” (Mims, 2017, p. 429). The executive leadership at Wells Fargo pushed employees to meet sales quotas and open numerous, superfluous accounts for customers or be subject to disciplinary action. This produced a cutthroat environment that eventually led to unethical activities on the part of the employee (Cavico & Mutjaba, 2017, p. 5). Culture of an organization is developed at the top of the organization and is implemented by the bottom. The leadership of Wells Fargo failed in two main ways. “The astute and agile leader should not be blind-sided by any weaknesses or improprieties in the company or organization, such as in the case of Wells Fargo, employees acting in an illegal and immoral manner to meet the unrealistic sales goals set by the bank…Moreover, the leader must be proactive, not a mere reactor, which sadly, appears to be the case with Wells Fargo” (Cavico & Mutjaba, 2017, p. 16). Had Wells Fargo’s leadership noticed the sales goals it was setting on its employees was turning into a weakness, it could have been proactive in preventing any unethical or immoral practices that would harm its customers.
Leaders with a Christian worldview should refrain from participating or allowing their employees to participate in any unethical business practice. It is important to always remember God will provide enough for those who believe in Him and trust Him. “God is able to bless you abundantly, so that in all things at all times, having all that you need, you will abound in every good word (2 Corinthians 9:8).
