Wells Fargo Scandal

Question 1

The past activities that led to the big scandals were cross-selling strategy and lower-level employees failing to meet the sales targets for opening accounts. This scandal was also a result of poor leadership, poor working environment, and setting undefined and unattainable targets. Wells Fargo workers continued to make fake client accounts that were used to show positive financial gains and activity. Wells Fargo employees created more than 2 million fake customer accounts as the sales leadership faced pressure from the management to meet outrageous and unrealistic sales targets (Davidson, 2016). Five thousand salespersons created fake accounts to achieve high-pressure internal sales targets. There were business restrictions that were enforced through several actions that were used to prevent future abuses, such as changes in the executive members. The increased unrealistic sales goals led to continued force from the management who pressured the workers to create accounts for clients who never needed them.

Question 2

The internal dimensions responsible for the issues at Wells Fargo’s poor business policies and management, where employees were demanded to work under pressure and fear of losing their jobs. Considerably, the management should support and motivate their employees rather than create fear and pressure, which can influence their morale and lead them in the wrong direction (Ochs, 2016). For instance, due to the increased pressure, the employees found themselves cross-selling and creating fake customer accounts. The number of causes for the alleged fraudulent behavior at Wells Fargo includes improper incentives, poor governance, poor control, insufficient auditing, and inappropriate human resource management practices.

Question 3

Organizational structure creates responsibilities, roles, and a line of authority. However, in this organizational structure, dictatorship has been utilized that allowing the top orders to control the operations of Wells Fargo without any thoughts and logic. The organization structure failed to give any clear responsibilities and roles for the low-level employees. The organization structure utilized by Wells Fargo was ineffective. For instance, when the employees understand that the CEO is only interested in the results, they become reluctant to seek advice and come forward to raise their grievances. Lack of an effective organization structure could have contributed to the sales fraud at Wells Fargo.

Question 4

Wells Fargo’s cross-selling scandal was a result of corporate culture, which has a crucial contribution to employee motivation, engagement, performance, and motivation. The cross-selling culture within the organization led to excessive pressure on the employees (McLean, 2017). The ban’s practice of establishing daily sales targets led to employees opening new accounts and issuing credit and debit cards without the knowledge of the customers. The company sales system brought about an overbearing sales culture, which forced the employees to engage in fraudulent activities in fear of losing their jobs (McLean, 2017). The cross-selling initiative is not a new practice, but when workers feel pushed to sell more than demanded, they are forced to engage in unethical practices.

Question 5

Wells Fargo should have a code of conduct and ethics to prevent any illegal activities within the organization. The bank management should put favorable sales targets and emphasize on customer service rather than having cross-selling metrics. Wells Fargo should also develop novel procedures that will verify account openings and introduce extra control and training mechanisms that will eliminate violations.

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Wells Fargo Scandal . (2021, October 24). Essay Writing . Retrieved July 02, 2022, from https://www.essay-writing.com/samples/wells-fargo-scandal/
“ Wells Fargo Scandal .” Essay Writing , 24 Oct. 2021, www.essay-writing.com/samples/wells-fargo-scandal/
Wells Fargo Scandal . [online]. Available at: <https://www.essay-writing.com/samples/wells-fargo-scandal/> [Accessed 02 Jul. 2022].
Wells Fargo Scandal [Internet]. Essay Writing . 2021 Oct 24 [cited 2022 Jul 02]. Available from: https://www.essay-writing.com/samples/wells-fargo-scandal/
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