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Business ethics is one of the fundamental aspects of the functioning of modern organizations. The firms have to meet requirements for their work and evolution because of the need for respecting all actors, customers, and partners. Unfortunately, there are some cases of rude violations of this code that also precondition the emergence of the conflict of interest. It can be determined as a situation when an organization is involved in multiple interests, financial or others, and following one of them might damage others (Anderson, 2018). For companies, it means that their clients or partners might suffer from adverse effects of various decisions aimed at the improvement of the functioning of a firm by disregarding the ethical code. The presented case offers a situation that presupposes the emergence of this undesired state.
The work of Wells Fargo and its employment of outlined schemes can be determined as the conflict of interest because of the violation of the existing code and damage caused to clients. Trying to generate additional income, the firm created fake accounts or made its clients buy services they did not need. Moreover, employees were forced to engage in unethical activities persuading customers or promoting products that presuppose extra spending and high revenue for the organization.
It created the basis for the emergence of the conflict of interest and deterioration of the situation. Another famous case, including the conflict of interest, is associated with Black Rock that breached its fiduciary duties to clients and did not provide them with the information about its other client who oversaw energy funds and owned his own natural gas company (Reuters, 2015). It helped Black Rock to generate income and, at the same time, damaged its other clients.
For the described case, ethical behavior was hindered by several approaches. First, it forced employees to perform various actions that would help to generate revenue, including deceiving clients, and providing them with false information (Wells Fargo fraud, n.d.). As a result, they acquired services that were not needed for them, or fake accounts were created. The given method does not attract significant attention and cannot be considered a serious breach until the conflict of interest appears. Additionally, the management structure created an environment that promoted unethical actions and simplified them (Wells Fargo fraud, n.d.). As for the second case, the company hindered ethical behavior by not disclosing data about the client who had his own interest and managed to acquire high revenue due to this strategy.
In such a way, the cases demonstrate that the improvement of communication across the company is vital for the elimination of the conflict of interest and observance of the ethical code. First, it is essential to cultivate a positive climate within the organization that is characterized by mutual support and respect. Employees should feel responsible for their actions not only regarding clients but also their colleagues (Pinzur, 2017). Second, to avoid the deterioration of the situation, the monitoring of the work of various departments by the special group can be recommended as a way to improve cooperation and collaboration.
Finally, the conflict of interest can be avoided by special training emphasizing the necessity to function within the existing legal and ethical field (Anderson, 2018). The effectiveness of these courses can be increased by guarantees of safety as employees should not be afraid of following the code and providing all clients with equal conditions for cooperation (Anderson, 2018). Only under these conditions, the conflict of interest can be avoided.
References
Anderson, J. (2018). The ethics of silence: Does conflict of interest explain employee silence? Healthcare Management Forum, 31(2), 6668. Web.
Pinzur, M. S. (2017). Conflict of interest. Foot & Ankle International, 38(7), 820820. Web.
Reuters. (2015). BlackRock to pay $12 million in SEC conflict of interest case. Fortune. Web.
Wells Fargo fraud. (n.d.). Web.
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