ethics, business, power, moral practices, workplace, rules, motivation, emotion, workforce, social problem, ethical behavior, knowledge, customer, employees, financial performance, human resource management, target, managers, morality, deviation
The paper discussed is written by Dirk Lindebaum, Deanna Geddes & Yannis Gabriel, under title 'Moral Emotions and Ethics in Organizations : Introduction to the Special Issue'1, published in the Journal of Business Ethics in 2017.
The authors propose to introduce the reader to the dynamics of moral emotions in business organizations, and whether these can implement ethical and moral norms within their structures.
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Wells Fargo is a retail bank in the United States, and have engaged11 between 2011 and 2015 in illegal activities, where employees at the bank surreptitiously created millions of fake bank and credit accounts for existing customers, in order to generate more revenue via banking and credit card fees, as well as inflate sales volume, in order to meet internal targets, and thus get paid large performance bonuses.
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Standard corporate finance theory offers various methods to provide firm valuation. We briefly discuss each method: the pragmatic approach is the use of the peer comparison method. The investor may use a different asset class of firm of similar type, e.g. working in the same industry or sector, and then use it as a reference for valuation. The peer method allows investors to infer the value of a given firm with respect to the value of others, comparable entities.
[...] Because American households have virtually all access to a banking account, Wells Fargo specialized in 'cross-selling', i.e. bundling new services to their existing customer base, in the hope that they would use them, and generate additional revenue from fees and charges attached to these services. Wells Fargo management designed a compensation incentive program (performance bonus) for the bank's employees in order to sign up more clients to these services and credit cards accounts, but in doing so, the bank failed to check whether the implementation of such incentives was within the letter and spirit of the law. [...]
[...] Dubuque, IA: Brown & Benchmark. 7Lindebaum, D Rebel—Therefore We Exist: Emotional Standardization in Organizations and the Emotionally Intelligent Individual.' Journal of Management Inquiry, 21:3, 262-77. workforce. As an indirect way to police these emotions, explicit and implicit rules and norms prescribe adequate and socially accepted display of emotions, which necessarily affects ethical behavior. In effect, firms as social institutions seek an emotion convergence dictated to the workforce in order to reach the same level of moral emotions, and thus similar levels of ethical behavior. [...]
[...] attitudes and standards a society or a community deem to be accepted and appropriate expressions. They also extend their definition to institutions, and the emotions they encourage individuals to exhibit as part of socially accepted - and encouraged- norms. Emotions on the other hand are more complex, in the sens that they are specific and inherent to human nature, and are not necessarily policed by individuals. Emotionology acts as a regulator of acceptable and deviant emotions. The same filter applies to moral emotions, which means that society - and firms in particular - may implement institutions and norms that may dull expressions of moral emotions through rules, or more indirectly through social and peer-pressure. [...]
[...] As far as the chain of events goes, upper and mid-level management are largely responsible for the dereliction of ethical standards at Wells Fargo. The CEO in particular is to blame, not out of lack of ethical standards, but because his decision to pursue eight products per customer had no basis in reality. It can be argued that John Stumpf did not intend for his employees to shed their ethical standards and engage in illegal activities in order to meet their local targets. [...]
[...] Geddes D. & Callister R.R. Crossing the Line(s): A Dual Thereshold Model of Anger in Organizations The Academy of Management ReviewVol No (Jul., 2007), pp Lindebaum, D Rebel—Therefore We Exist: Emotional Standardization in Organizations and the Emotionally Intelligent Individual.' Journal of Management Inquiry, 21:3, 262-77. Lindebaum & al Moral Emotions and Ethics in Organisations : Introduction to the Special Issue – Journal of Business Ethics pages 645-656 Mestrović, S. G Postemotional society. London: Sage. Scherer, K. R. [...]
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