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Authors:
Vincent Giolito (Solvay Brussels School of Economics and Management); Paul Verdin (Solvay Brussels School of Economics and Management); Yassin Oualhadj (Solvay Brussels School of Economics and Management)
Published in:
2018
Version:
28-Sep-2018
Revision date:
12-Nov-2018
Length:
21 pages
Data source:
Published sources

Abstract

Wells Fargo was a remarkable success story in the US banking sector. Yet in 2016, a scandal hit. An investigation by an official US banking regulator revealed 'sales misconduct', resulting in a USD165 million penalty. For years, bank employees had been cross-selling, opening additional accounts and enrollments in financial products on behalf of existing Wells Fargo customers without first obtaining their consent, and in some cases without customers’ knowledge altogether. Coupled with extensive media coverage and individual litigation cases, the financial penalty cast cross-selling, a specific tenet of Wells Fargo’s strategy, in a negative light. The case offers a CEO perspective on this story which, because of its far-reaching implications for governance, has stretched out over a period of more than 15 years. The product of our original research, based on a vast array of public sources, the case examines a question common to many thriving companies: are issues and regulatory or legal challenges the price to pay for the overall success of strategy, or might they be a sign of a deep yet hidden flaw or serious problem in that strategy? Could unusual success be a signal that something might be wrong? This case proposes an original angle for analysis of strategic error management.

Topics

Error management; Banking and financial institutions; Top management; Strategy & execution
Location:
Industry:
Size:
265,000 employees
Other setting(s):
2000-2017

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