CASE 10: Wells Fargo

Workers Tell Wells Fargo Horror Stories

According to CNN’s news article, finance service provider Wells Fargo has forced its employees to exercise illegal activities, such as creating unauthorised bank accounts, between years 2011 and 2015. Former employees of the company tell they faced unbearable pressure to meet sales quotas and, in fact, more than 5,000 employees were fired in response to the scandal. Also, some decided to resign either because they found the firm’s practices so unethical or could not deal with the pressure they at work. The pressure grew so enormous that employees – sometimes encouraged by their managers – even opened checking accounts for their family and friends just to meet the required number of opened bank accounts per day. Bankers working for the company also opened new bank accounts for their existing clients without the clients’ permission.


Wells Fargo Urged to Resign Over Accounts Scandal

BBC News’ article discusses the video, where Senator Elizabeth Warren urges Wells Fargo chief executive John Stumpf to resign because of the scandal that his company is going through. However, Stumpf stresses that the company never intended to put pressure on its employees and that he, as a manager, would take whole responsibility of the company’s unethical sales practices. He also mentions, that the company would have abandoned its unethical practices sooner or later. Stumpf also promises that Wells Fargo will change its practices in the future and will make sure that the opened bank accounts are legal. The company will do so by sending confirmation emails to customers after opening a deposit account in their name.


I Called the Wells Fargo Ethics Line and Was Fired

Just like the two articles above, also this article of CNN News discusses the unethical practices of Wells Fargo and how the company ended up firing the workers, who were brave enough to talk about the company’s illegal activities. Some of the former Wells Fargo employees tried to put an end to their company’s activities by refusing from participating the creation of phony bank accounts and by informing the company’s human resources workers. However, the workers’ complains were not taken into consideration, but quite contrary, in retaliation for whistleblowing, many were fired with doubtful principles. For instance, a whistleblower could get fired if she/he arrived work just a few minutes late. According to the article, retaliation against whistleblowers and employees in general is strictly forbidden in the company. Still, some former employees of the company report they had been suppressed and even bullied at work – even without any whistleblowing involved.


Letter Warned Wells Fargo of “Widespread” Fraud in 2007

Even though the former CEO of Wells Fargo claims that he was not informed about the struggles with unethical sales behaviour in his company before 2013, there is a letter from year 2007 written by the company’s former employee, which proves otherwise. In the letter, the former employee wrote about Wells Fargo’s widespread unethical sales practices and fraud in the company’s Northern California branch. The writer of the letter, who stays unknown, sued Wells Fargo and even won the case.

Despite the fact, that the letter was sent there is no proof if Stumpf, the company’s former CEO, had received it or not. Still, the letter and testimony from other employees arise a question, whether Wells Fargo had practiced its illegal sales policies even longer that the company has admitted.


Most Feared Wall Street Prosecutor Warns Bankers Against Silence

The scandal of Wells Fargo, where the company’s employees had been suppressed to create millions of unauthorised bank and credit accounts without their customers knowing it, has triggered a series of events where some powerful opinion leaders have stood against companies’ unethical behaviour. One of those people is Preet Bharara, an attorney from New York, who stresses that banking companies should built their companies on the base of honesty, integrity and transparency, and that these three ought to be the framework for other practices in any company.

According to Bharara, there are three risks that white collar criminal firms might face: a culture of minimalism, a culture of formalism and a culture of silence. The first one, meaning when a company only aims for the minimum, often has disastrous consequences. The latter of the three practices – silence – is still the most lethal one. In other words, the company should create a safe environment for its employees, where their thoughts and concerns are heard and taken into consideration.




CASE 9: Child Refugees in Turkey Making Clothes for UK Shops

The article points out the ethical issues of child labor in clothing industry. Also, the author of the article talks about adult refugees and their illegal use as labor for clothing companies, such as Zara and Mango. However, all the brands refuse that they would have had children or refugees working in their production chain.

The ethical considerations also arise concerning the workplace conditions and working hours of refugees and children. Furthermore, refugee workers are said to have poor rights – if any rights at all – in the factories, and they can get fired any time. Also, a 15 year-old employee was staid to work 12 hours a day.

After offered with evidence that shows the employment of children and refugees, the companies have made strong declarations against the use of refugee and child labor. Still, some of them say that the ethical issues are not their concern since it is not their company producing the clothes, and that they are only subcontracting from these firms.

Many of the issues pointed out in the article have to do with environmental challenges that firms nowadays have to deal with. For instance, globalisation makes and has for decades made companies move their factories offshore, which makes it hard for the companies to monitor their subcontractors and factories (Gómez-Mejía, 2016:35). Also, the creation of worldwide company culture becomes challenging when the basic living standards in the country’s are remarkably different (Gómez-Mejía, 2016:35). Subcontracting, for this reason sets up organisational challenges for companies (Gómez-Mejía, 2016:38).

Also, the creation of organisational culture is challenging or sometimes nearly impossible in situations, where some of the company’s activities are subcontracted to an outside company (Gómez-Mejía, 2016:41). Moreover, even if the company had created codes of ethics outlining the principles and standards for the company’s members, these codes can still be general enough to allow room for managerial discretion in the company itself – not to even talk about outside companies (Gómez-Mejía, 2016:46).

Globalisation has also increased the competition between companies. As Porter discusses in his unit strategy, companies can choose to follow an overall cost leadership strategy in which the firm’s competitive advantage is achieved through lower production costs (Gómez-Mejía, 2016:56). I believe that this is also the case with the use of child and refugee labor in Turkey. To be able to compete in the global clothing industry the companies, such as Zara and Mango, put their codes of ethics aside in stead of cutting costs from other business activities.


Goméz-Mejía, L. R., Balkin, D. B. and Cardy, R. L. (2016) Managing Human Resources. Harlow: Pearson Education Limited.

Other Articles’

  1. H&M Factories in Myanmar Employed 14-Year-Old Workers

The article discusses the ethical issues of employing children. Still, H&M and some other companies point out that hiring a person over 14 is not a crime according to ILO and the work legislation, in fact, can differentiate depending on the country in question.

2. Child Labour’s Ethical Gap

Just as the article above, also “Child Labour’s Ethical Gap” talks about the dilemma of global economy, and the production of clothes in poor countries while they are sold in rich countries. However, the article points out an interesting perspective: what would the children fo, if they were not working in these companies? According to the article, the children – if not working in clothing factories – could then become victims of human trafficking, meaning they would end up working in some form of slavery, prostitution and/or pornography.

CASE 8c: Hundreds of Nokia’s Outsourced Symbian Developers Leaving Accenture

According to the article, 1,200 Symbian developers who left from Nokia transferred to an outsource firm called Accenture. However, express their disappointment with their new job at Accenture. For that reason many former Nokia workers have decided to leave the company. One of the factors causing dissatisfaction among former Nokia employees are working hours: they were not what the workers were promised, but in fact they were offered several working hours less than promised.

However, if Nokia would have liked to keep its employees, it could have chosen several ways of doing so. For instance, the company could have retrained its employees or changed their job design (Gómez-Mejía, 2016:220). By proceeding accordingly, Nokia could have become more profitable while still retaining jobs and maintaining employee motivation and engagement.

Furthermore, Nokia could also have used downsizing, meaning that by changing the scale of their production, for instance by making it smaller, the company could have improved its financial performance (Gómez-Mejía, 2016:217).


Goméz-Mejía, L. R., Balkin, D. B. and Cardy, R. L. (2016) Managing Human Resources. Harlow: Pearson Education Limited.

CASE 8b: Nokia Cuts 3500 Jobs “to Ensure Profitability”

In 2011, after closing down its plant in Germany and establishing a new branch in Cluj, Romania, the company also decided to close down the latter. Furthermore, the company ended up cutting jobs not only in Romania, but also in Finland and USA. The redundancy talks are held for the company’s workers in factories, as well as in marketing and support services.

In fact, reducements and job cuts can be done for various reasons, typically to improve productivity or the financial situation of the company (Gómez-Mejía, 2016:209). The reason for jobs cuts at Nokia have been made on the base of financial reasons: job cuts are way to make sure that the company stays profitable also in the future.The benefits of employee separations include reduced labor costs as well as replacement of poor performers (Gómez-Mejía, 2016:214). However, job cuts often have negative effects as well, such as increased uncertainty among workers, who get to stay.

An alternative to layoffs are is early retirements (Gómez-Mejía, 2016:218). In other words, early retirement policies may be carried out by offering a package of financial incentives, that could make retirement attractive. On the other hand, those incentives can only be offered to employees for a short period of time. In addition to early retirements, a company may also establish a hiring freeze or a pay freeze, which refers that neither new employees are hired nor the salaries of the old ones increase (Gómez-Mejía, 2016:219).


Goméz-Mejía, L. R., Balkin, D. B. and Cardy, R. L. (2016) Managing Human Resources. Harlow: Pearson Education Limited.

CASE 8a: Nokia Closes Plant in Germany and Relocates in Romania

According to the article, Nokia closed down its plant in Germany, while cutting down jobs, and opened a new facility in Romania. Despite the fact, that Nokia had received state assistance in Germany, the company had not successfully benefitted from the potential environment provided by the very country. However, some of Nokia’s spokeswoman argued, that Germany had not provided Nokia a good business environment. In the case of Nokia, the employees left without a job should probably be offered to have exit interviews. The purpose of having exit interviews is to know why an employee is leaving a company or, to support and provide the employee with counselling that is meant to help the employee to seek a new job (Gomez-Mejía, 2016:213).

Often, cutting down jobs or moving company’s facilities to another country are ways to cut company’s expenses and increase its productivity (Gomez-Mejía, 2016:209). However, according to The Worker Adjustment and Retraining Notification Act (WARN), if the company has more than 100 employees, an employer should give at least 60 days’ advance notice to the employees, who the company will lay off (Gomez-Mejía, 2016:221). Moreover, communicating with the employees before the lay offs and proceeding with them humanely has a great importance (Gomez-Mejía, 2016:221).


Goméz-Mejía, L. R., Balkin, D. B. and Cardy, R. L. (2016) Managing Human Resources. Harlow: Pearson Education Limited.

Other Articles

  1. Bangladeshissa erotettu satoja protestoivia merkkivaatetehtaiden työntekijöitä

The article discusses, how strikes have lead to job cuts of more than 1500 factory workers in Bangladesh in 2016. According to Bangladesh police, protest in the industry are illegal.

2. Alkaako riittää? Työelämälle voi heittää hyvästit 61-vuotiaana – jos sietää seurauksen

In Finland, it is possible to retire already in the age of 61. However, the cost of early retirement will be put on the person who is retiring, but the benefits may exceed the possible negative financial consequences.


CASE 7c: Engaging for Success: Enhancing Performance Through Employee Engagement

Chapter 4: Enablers of Engagement – What Has to Happen to Make Engagement Work?

As discussed in chapter four, employee engagement can indeed be practiced through pay and other concrete incentives. However, in order for these kinds of incentives to function properly and encourage employee engagement the principles for receiving them have to be clearly informed by the employer (MacLeod and Clarke, 2009:74). In stead of using traditional incentives, the book suggests four ways of achieving better employee engagement:

1&2. Leadership and engaging managers. If employers want their subordinates to engage more with their work and even increase employees’s productivity by doing so, they will have to show their own commitment to work as well as employees. Furthermore, employers should show clear and strong leadership by guiding and supporting their subordinates’ work and development at work. Good leadership also includes that managers know their organisation, its core values and goals, and knows how to communicate these to their employees, who in turn try to achieve these values and goals in their work. Most importantly, managers have to act as examples of how one can aim for the success of the company and achieve personal goals by doing so (MacLeod and Clarke, 2009:75). In other words, manager engagement is crucial if a company wants to achieve better employee engagement (MacLeod and Clarke, 2009:80).

3&4. Voice and integrity. By listening employees’ opinion and letting them speak out, the employer can create trust between the two. When employees feel, that their opinion is appreciated and that they can affect on their work they also feel more motivated. Also, hearing employee’s opinion on their work creates a sense of integrity: good results are achieved together and everybody in the organisation is needed to make the company successful (MacLeod and Clarke, 2009:75,76,93,104).

As mentioned, one of the first steps in employee engagement process is providing employees a clear vision of company’s goals and how employees’ work contributes to achieving those goals. To support the process, employers should remember to provide their subordinates feedback and coaching (MacLeod and Clarke, 2009:81). Getting feedback is important for employees because that way they can make sure they have understood not only the goals and values of the company, but also how they can contribute to those values with their own work (p. 80). Moreover, acting on feedback is important, since it also shows the value of employees’ opinion (MacLeod and Clarke, 2009:98).

Another way to increase employee engagement is to make workers enjoy being at work. For instance, employee can offer workers health and well-being programmes or provide an ergonomically-designed working environment (MacLeod and Clarke, 2009:90).

Finally, employers can make workers more engaged by providing them possibilities to develop their skills and become better at their work. The important factor here is to reduce the sense of competition between workers themselves, and rather support every worker’s individual development (MacLeod and Clarke, 2009:115).


Macleod, M. and Clarke, N. (2009). Engaging for Success: Enhancing Performance Through Employee Engagement. UK: Department for Business, Innovation and Skills.



CASE 7b: Engagement Makes All the Difference

In Employment Today Magazine’s article Robyn Reilly describes how managers can support employees to become more passionate for their work. In addition, the article stresses the negative effect of unhappy and un-motivated employees to company’s goals and productivity.

Moreover, according to Reilly engagement is always individual and subjective to each employee. For that reason, managers should know their employees and not only the work they are responsible of. Also, employees should feel supported and empowered by their supervisors. For instance, managers can make employees feel appreciated and valuable by asking their opinion on job-related decisions and by making employees feel, that they have a word on how their work is handled and constructed.

Another way of building employee engagement is building an engagement plan. Most importantly, the engagement goals should be realist, but they should have different time-goals – for instance, daily, weekly and monthly goals. Finally, employees’ goals should be supported by their managers. One way to support the achievement of engagement plans is giving out powerful speeches and descriptions to employees about the importance of their engagement and how it can help not only the company, but also the employees to make her/this work more motivating.


CASE 7a: What Is Employee Engagement?

In the article of Forbes, Kevin Kruse makes an observation that there is a difference between an employee being happy at work and being productive. In other words, achieving employment engagement might require different methods than making them feel happy at work.

An employee, who is engaged to her/his work truly cares about how the company is doing and wants to develop herself/himself to better match with the company’s needs.

When employees are engaged with their work, the productivity of the company also increases.


Other articles

  1. Rethinking Work (The New York Times, AUG. 28, 2015)

In his article Rethinking Work, Barry Schwartz claims that the basic assumption that people do not like their work and that they only go to work because they have to, is misleading and backward. In fact, according to Schwartz this basic assumption, that people don’t like to work might even lead us to dislike our work. Most importantly, he claims that people are not “in it” just for the money, but because they feel their work has a greater purpose and they want to achieve personal goals with their work.


2. What Great Managers Do Daily (Harvard Business Review, DEC. 14, 2016)

The article introduces five ways, that managers can use to increase employee engagement in their companies. Some of them are fair allocation of work and maintaining internal networks in the company, that allow employees to communicate effortlessly not only with each other but also with managers.


6b: Do Corporate Wellness Programs Really Work?

The author of the article emphasises, that despite aiming towards employee efficiency in organisations they should also care about the employees health by treating them as individuals – not only workers. He stresses, that the company will get something in return when it invests to employees’s health: the productivity among the workers will most probably rise, when they feel better at work. The author suggests the following for managers to offer to their employees:

  • Cash rewards
  • Providing discounts at gyms
  • Offering healthy food options at work
  • Participation in health programs, that would encourage people to stop smoking

Another interesting suggestion made by the author is the reason why health programs are not always that productive: employees do not even know of their existence. Wellness-programs refer to company-sponsored programs that focus on preventing employees’ health issues (Goméz, 2016:549). To make employees more conscious about wellness-programs, the author encourages managers to inform their employees about them. Also, managers should support their employees when they are new in these programs in order to avoid them dropping out from them. Nominating a wellness-leader is also an option, so whenever employees want to talk about their health-issues or health-programs at work, they would have a person to turn to.Employees can also be motivated to participate by offering them incentives.


Goméz-Mejía, L. R., Balkin, D. B. and Cardy, R. L. (2016) Managing Human Resources. Harlow: Pearson Education Limited.

Other Articles

  1. Työssä käyvien liikuntaan sijoittaminen on kannattava investointi

According to the article, regular exercise helps to reduce sick leaves and increases employees’ mental health. Overall, the article stresses, that the benefits of doing exercise are not only physical but also mental.


2. 5 Hallmarks of Great Corporate Wellness Programs

The article introduces Laura Linnan’s claims of how to identify best practices that define a wellness program that’s likely to produce results both to employees and employers.


CASE 6a: ‘Exhausted’ Merrill Lynch intern died from epileptic fit in shower after he ‘pulled three all-nighters at bank where employees compete to work the longest hours’

The article discusses the death of a 21-year-old investment bank intern, whose death is expected to be an outcome of work exhaustion. The intern named Moritz Erhardt, suffered from epilepsy, but had not told about his illness in his workplace. Despite of taking his medicine, the young intern’s exposure to stress and exhaustion due to long working hours probably decreased the effect of his medicine.

According to Erhardt’s former employer, the young intern never complained about his long working-hours. For the very reason, managers should always encourage people to talk about their health issues and ask to be treated of the illness is job-related. To do this, the employee should announce the employee rights clearly to employees, so they would know about their rights to get treatment (Goméz, 2016:538). Making employees understand the cost of neglecting the safety standards and recommendations is important, and managers can do this by making the employees aware of the costs of resistance to safety programs and rules (Goméz, 2016:538).

Occupational Safety and Health Act of 1970, OSHA, is a federal law targeted to secure employee rights. According to the law, employers should provide their employees a safe and healthy work environment and keep records of injuries and illnesses that occur in the work place (Goméz, 2016:532). However, employees also have some responsibilities under OSHA. For instance, they should report all injuries or work-related illnesses to their employee. In addition, employees should report about work conditions, that might lead to the aforementioned (Goméz, 2016:534). In the light of OSHA, the case of Erhardt becomes problematic. The fact that the intern had not reported of his illness made it hard for the employee to secure him with work conditions, that would not burden the intern. However, the employee should have intervened to the situation, where both the interns and regular employees know that there is an atmosphere of high competition among organisations actors.


Goméz-Mejía, L. R., Balkin, D. B. and Cardy, R. L. (2016) Managing Human Resources. Harlow: Pearson Education Limited.

Other Articles

  1. Tutkimus: työuupumus tarttuu työntekijältä toiselle (HS)

According to the article the “Tutkimus: työuupumus tarttuu työntekijältä toiselle” (Helsingin Sanomat, 14.7.2014) positive interaction between employees decreases the number of job-related exhaustion is organisations. Also, the more employees get to talk to another, share their job experiences and act as each other’s supporters, the less there is opportunity that they become exhausted at work.


2. Neutralizing Negativity Is Key to Career Success

The article stresses, that at work, as well as in general in life, our mind goes into a negative mode automatically, when we face challenges – it is our survival mechanism towards threats. In order to overcome the negative mindset, the article guides employees for instance, to be grateful, think before they act and slow down and breath, before releasing negative emotions.


CASE 5: The Puzzle of Motivation

The idea behind Dan Pink’s TedTalk called The Puzzle of Motivation he stresses the encouraging effect of using incentives for employees. He claims, that when employees know that their good success at work will be rewarded, the employees get more motivated and put more effort on their work than the ones who do not get perks for their good performance. Motivating employees is also considered crucial in a book called Managing Human Resources (2016). According to the book, there are several ways of rewarding employees. For instance, employees can be offered perks, such as company’s car or free use of company’s gym (p. 369). Also, having one-time rewards or profit-sharing with employees are used in some companies (p. 369).

There is also the opportunity of offering employees with non monetary rewards, that include challenging work, interesting assignments and public recognition (p. 325). Even though many could consider non monetary rewards less motivating than money or concrete perks, their motivating effect can be just as powerful as the latter’s. Furthermore, many surveys have shown that employees actually rank pay low in importance. What is more important, is that employees want to feel appreciated (p. 325-326). Also, Dank Pink stresses the same observation in his TedTalk: bonuses and other rewards might actually doll creative thinking. Higher incentives actually lead to worse performance, according to Pink.


Goméz-Mejía, L. R., Balkin, D. B. and Cardy, R. L. (2016) Managing Human Resources. Harlow: Pearson Education Limited.

Other Articles

  1. The Best Ways to Reward Employees

According to Entrepreneur’s article managers should consider that what kind of employee behaviour and performance they want to reward. When there are clear guidelines the possibility of unequal payment policy and performance appraisal systems at work can be minimized.



2. Engaging Employees Is About More Than Just Financial Incentives

The Guardian’s article discusses the power of employee motivation as part of performance reward systems. In fact, the article finds that offering employees cash rewards does not lead to sustained high levels of work. Rather than choosing cash payment, managers should focus on making employees feel, that they have some sort of autonomy at work and that their work is appreciated and valuable.


4b: Nando’s tastes success through training: Expanding restaurant firm retains a family feel

The article argues that restaurant chain Nando’s has a remarkably high appreciation among its workers. In fact, the company has won four prices, for example he National Training Awards for management coaching (2005), training new employees (2005), for the warm, family-like feel that they have been able to create among their workers. One of the ways the company has achieved its high appreciation is by coaching its restaurant managers. During this coaching managers are introduced with the company’s values as well as trained how to create a fun and supportive working environment. Most importantly, as regional manager Rob Papps says, the company tries to establish a culture where it is possible for the employees to take more responsibility of their own development at work.

One essential factor in Nando’s way of training employees is by holding workshops. The article also stresses the importance of orientation of new employees. The idea of orientation is to inform new employees about their job, what they are expected to do and most importantly, make them feel comfortable with the transition from their old job or position to the new one (Gomez, 2016:282). At Nando’s, the ten day’s of on-site training gives the employees a realistic job preview or RJP by giving them an insight of Nando’s values as well as food hygiene, health and safety.

The ten days site-in offers also team training, where new employees can practice creativity training by for example, brainstorming (Gomez, 2016:277-278). In the case of Nando’s, team training also turned out as a valuable tool of diversity training, where employees are taught about specifically cultural differences that might otherwise stand as a block for an efficient communication between employees (Gomez, 2016:279).


Goméz-Mejía, L. R., Balkin, D. B. and Cardy, R. L. (2016) Managing Human Resources. Harlow: Pearson Education Limited.