Wells Fargo: Administrative evil and the pressure to conform

Abstract

Corporate corruption has become a pervasive problem in our society as scandals erupt with disheartening regularity. These unethical business practices result not only in financial disaster but also in the disillusionment and loss of trust on the part of consumers and shareholders alike. Unethical behavior often originates with top management. However, these bad actors cannot act alone. They must have the complicit support of others within the organization. In this installment of Business Law & Ethics Corner, we examine the pressures and motives of people deep within the corporation; the ordinary people who, by just going about their everyday jobs, enable these scandals to take place. Administrative evil is an explanatory framework to understand the tendency toward dehumanization and the rationalization of unethical behaviors. Using the Wells Fargo account scandal as an illustration, we integrate administrative evil with theories from organizational psychology which strive to understand group pressure for social conformity. We conclude with recommendations to prevent unethical attitudes and behaviors from permeating the organization.