wells fargo: history & issue analysis · wells fargo: history & issue analysis green team:...
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History of Wells Fargo
Founded in San Francisco in 1852 by Henry Wells and William Fargo
Developed a reputation of trust in banking and express service
Used cutting-edge methods of transportation to grow their business
Maximized use of the new nationwide rail system and developed Ocean–to-
Ocean motto
History of Wells Fargo
Becomes stand alone banking entity in 1905
Survives 1906 earthquake and fire and rebuilding begins
Expands its reach in the 1920’s and 30’s
Creates innovative solutions for banking
Utilizes technology in the 21st Century
Primary Issue
Employees opened an estimated
2.5 million unauthorized accounts
Driven to hit sales goals
Need to develop strategies to
regain stakeholders’ trust
Situation
Investigation launched to determine
scope of scandal
Aggressive sales tactics blamed
Fines of $185 million incurred
Employees let go
New leadership named
Old Leadership
CEO John Stumpf pushed quantity over
quality
“Eight is Great”
Carrie Tolstedt failed to implement controls
Minimal monitoring of the sales program
New Leadership
Wells Fargo. CEO Timothy Sloan, Wells Fargo Leadership. Photograph. November 2017.
Rebuild culture on transparency
Refocus on customer satisfaction
Accountability
Clawbacks and bonuses
Eliminated product sales goals
Communication
Poorly established culture
Culture fostered by leadership
Forced communication to stakeholders
Wells Fargo. Commitment to Customers. Wells Fargo. PDF Image. November 2017.
Financial Sustainability
Goal to put scandal in the past
Look to financial growth, sustainability
and cost cutting measures
Decline in growth and profit due to
decline in reputation
Investors disappointed but not giving up on Wells Fargo
Focus actions to offset and reverse decline in income
SWOT
Strengths• Customer service
• Innovation
• Philanthropy
Weaknesses• Organizational structure
• Lack of communication
• Account scandal
Opportunities• New leadership
• Refocusing customer
service
• Marketing initiatives
Threats• Damaging media coverage
• Enhanced regulations
• Competitors
Recommendations
Develop a plan for reputational risk
Implement standard operating procedures
Design reporting structure for better decision making
Recognize all stakeholders
Works Cited
Ackerman, Andrew, and Emily Glazer. “Wells Fargo CEO Sloan to Apologize, Explain Bank’s Accountability in Congressional Hearing.” Wall Street Journal, 02 October 2017.
Calagna, Keri, and Matthew Davy. “Managing Reputation Risk.” Deloitte, Wall Street Journal, 24 July 2017.
Forbes Contributors. “The Wells Fargo Account Scandal: A Timeline.” Forbes Media, 2017.
Glazer, Emily. “Wells Fargo to Pay $185 Million Fine Over Account Openings.” Wall Street Journal, 08 September 2016.
Glazer, Emily. “Wells Fargo’s Slams Former Bosses’ High-Pressure Sales Tactics.” Wall Street Journal, 10 April 2017.
Glazer, Emily. “Wells Fargo’s New Mission: Growth, Not Scandal.” Wall Street Journal, 08 June 2017.
Glazer, Emily. “Wells Fargo’s New Chairman Elizabeth Duke Knows Crises.” Wall Street Journal, 15 August 2017.
Glazer, Emily. “Wells Fargo’s Sales-Scandal Tally Grows to Around 3.5 Million Accounts.” Wall Street Journal, 31 August 2017.
Works Cited continued…
Glazer, Emily. “Wells Fargo’s Year of Scandal Stretches On.” Wall Street Journal, 08 September 2017.
Glazer, Emily. “5 Things to Watch in Wells Fargo’s Results.” Wall Street Journal, 12 October 2017.
Glazer, Emily. “Wells Fargo Posts Weaker Earnings After Sales-Practices Scandal.” Wall Street Journal, 13 October 2017.
Lublin, Joann S. “After Uber and Wells Fargo, Boards Wake Up to Company Culture.” Wall Street Journal, 05 October 2017.
Rexrode, Christina, and Emily Glazer. “Wells Fargo CEO Defends Bank Culture, Lays Blame With Bad Employees.” Walls Street Journal, 13 September 2016.
Sloan, Tim. “Thank You.” Wells Fargo, 05 April 2017.
“Wells Fargo History.” Wells Fargo Bank, 2017.
“Wells Fargo.” Wells Fargo Bank, 2017.