Product details

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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.
Location:
Industry:
Size:
265,000 employees
Other setting(s):
2000-2017

About

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.

Settings

Location:
Industry:
Size:
265,000 employees
Other setting(s):
2000-2017

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