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    Case Study 2

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    1. This case study examines Wells Fargo's practice of cross-selling and the problems that resulted. Cross-selling involved opening unauthorized customer accounts without permission to meet aggressive sales goals. 2. Cross-selling initially benefited Wells Fargo by increasing sales, revenue, and stock prices. However, it later caused major issues when the fraudulent activity was discovered, damaging Wells Fargo's credibility and reputation with customers. 3. The case shows that prioritizing short-term gains over ethical practices can have severe long-term consequences for a company. Unethical cross-selling hurt both Wells Fargo and its employees.

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    Case Study 2

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    1. This case study examines Wells Fargo's practice of cross-selling and the problems that resulted. Cross-selling involved opening unauthorized customer accounts without permission to meet aggressive sales goals. 2. Cross-selling initially benefited Wells Fargo by increasing sales, revenue, and stock prices. However, it later caused major issues when the fraudulent activity was discovered, damaging Wells Fargo's credibility and reputation with customers. 3. The case shows that prioritizing short-term gains over ethical practices can have severe long-term consequences for a company. Unethical cross-selling hurt both Wells Fargo and its employees.

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    CASE STUDY 2

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    1. This case study examines Wells Fargo's practice of cross-selling and the problems that resulted. Cross-selling involved opening unauthorized customer accounts without permission to meet aggressive sales goals. 2. Cross-selling initially benefited Wells Fargo by increasing sales, revenue, and stock prices. However, it later caused major issues when the fraudulent activity was discovered, damaging Wells Fargo's credibility and reputation with customers. 3. The case shows that prioritizing short-term gains over ethical practices can have severe long-term consequences for a company. Unethical cross-selling hurt both Wells Fargo and its employees.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    4 views5 pages

    Case Study 2

    Uploaded by

    Đặng Ngọc Ánh
    1. This case study examines Wells Fargo's practice of cross-selling and the problems that resulted. Cross-selling involved opening unauthorized customer accounts without permission to meet aggressive sales goals. 2. Cross-selling initially benefited Wells Fargo by increasing sales, revenue, and stock prices. However, it later caused major issues when the fraudulent activity was discovered, damaging Wells Fargo's credibility and reputation with customers. 3. The case shows that prioritizing short-term gains over ethical practices can have severe long-term consequences for a company. Unethical cross-selling hurt both Wells Fargo and its employees.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 5

    CASE STUDY 2 : WELLS FARGO

    Prepared by: Group 1

    Class : VISK2021B

    2023-2024
    GROUP INTRODUCTION

    1. Nguyễn Hương Ly - 436602


    2. Đặng Ngọc Ánh - 436487
    3. Võ Hà Phương - 436687
    4. Phạm Hương Giang - 436646
    5. Nguyễn Khánh Hưng - 436581
    6. Vũ Thu Hà - 436698
    7. Phạm Mai Chi - 436645
    1. Cross-selling
    ● Cross-selling is to sell related and complementary products to a customer. In
    this case, Wells Fargo’s employee applied this method to steal customer
    security information from a previous purchasing to open unauthorized fake
    accounts without the customers' permission

    ● Benefit of cross-selling is to increase sales revenue, create loyal customer


    relationships, and encounter customer’s need. However, in this case Wells
    Fargo only achieved the goal of increasing sales revenue but violated
    professional ethics, leading to a loss of credibility with customers.

    2. What were the benefits of cross-selling to the bank and its


    shareholders?
    a. Increase revenue :
    ● While this fraud took place, the usual report showed a significant increase in
    the number of different accounts that a customer had with Wells Fargo from
    2011 to 2015. This attracted many investors, followed by a rapid price of
    stock. Besides, Wells Fargo charged fees from fraudulent accounts that
    customers are unaware about the existence of these accounts .
    ● Note: Shows the relationship between the number of products that a retail
    banking customer holds with Wells Fargo and the percentage of those that
    make an additional product purchase from Wells Fargo in the subsequent year.

    Credit to Wells Fargo Investor, 2014


    ● April 2012: “We increased our retail banking cross-selling ratio to a record 5.98
    products per household.” April 2014: “We achieved a retail banking
    cross-selling record of 6.17 products per household.” The rate kept increasing.
    It doesn't matter whether customers use those accounts or not. And Wall Street
    loves it. Everyone recommends buying Wells Fargo stock
    b. Employee :
    ● When Wells Fargo’s revenue increases, employees can avoid being laid off,
    continue to do the job and bring value to the company. Besides, employees
    have opportunity to receive commission or bonus

    3. What ways did cross-selling contribute to problems the company later faced?

    - Cross-selling played a significant role in the problems faced by Wells


    Fargo
    a. Selfish interest
    ● Because of the selfish interest of Wells Fargo, which has set too high sales
    goals and targets for employees, creating high pressure within. Do not care
    about how employees obtain goals, viewing employees not as
    collaborators but as mere tools to make money. That is gutless leadership
    b. Personal gain
    ● Employees did harm customers, stealing security information and money
    from customers. Likewise, they used unethical methods such as opening
    accounts without customer permission through cross-selling to achieve
    these goals using unethical methods and hit KPIs.

    4. If you were an employee of Wells Fargo and felt pressured to


    cross-sell to customers, even when you felt this was inappropriate, what
    would you have done?

    a. Re-evaluate the company's vision and mission:


    ● Based on the company's vision : “ We want to satisfy all our customer’s
    financial needs and help them succeed financially”, it becomes evident that the
    pressure for cross-selling is not aligned with meeting the customers' needs.
    Instead, it seems to prioritize quantity over quality, potentially causing harm to
    the customers. Upon realizing this, I believe it is important to pause and
    reconsider my actions
    b. Re-evaluating personal ethics:
    ● Consider whether the requested behavior violates your personal ethical
    standards. In business, the principle of "do no harm" dictates that if you witness
    colleagues engaging in fraudulent activities, stealing customer information or
    assets to achieve Key Performance Indicators (KPIs), it is important to speak
    up and raise an alarm to awaken everyone to their behavior
    c. Discuss with colleagues:
    ● Make your colleagues aware of the massive consequences that lie behind
    engaging in fraudulent behavior. Help them understand that the short-term
    gains they might achieve will ultimately come at a high cost in terms of severe
    long-term consequences. Their actions could potentially impact not only their
    future careers but also the overall professional reputation they hold.
    d. Creating pressure within the company:
    ● After discussing with colleagues, collaborate with them to engage in a dialogue
    and negotiate with your direct manager to propose an alternative approach that
    aligns with the company's values and benefits its employees. Firstly, suggest
    retraining the staff to enhance their skills in cross-selling effectively and
    genuinely, focusing on quality rather than quantity. Secondly, emphasize that
    this approach can bring long-term benefits to the company, such as fostering
    loyalty and building stronger relationships with customers
    e. Reporting to higher authorities:
    ● If the aforementioned measures do not resolve the issue, you may consider
    reporting the situation to higher authorities within the company, such as senior
    management, the ethics department, or the human resources department. This
    report will serve as a warning regarding unethical behavior and will help
    protect your interests and the interests of the company.
    f. Seeking external support:
    ● In severe cases where internal measures fail to address the problem, you may
    contemplate seeking external support from entities such as government
    regulatory agencies, legal counsel, or media organizations. However, it is
    important to note that this decision can have serious implications for your work
    relationships and personal development, so exercise caution when making such
    a decision.

    5. Conclusion

    ● The Wells Fargo case study demonstrates the detrimental effects of unethical
    behavior within a company. Employees engaging in fraud and creating
    unauthorized customer accounts have severely damaged the company's
    reputation and harmed its customers. This case emphasizes the need for a
    strong ethical culture, proper training, effective oversight, and individual
    responsibility to prevent such misconduct. By learning from these mistakes and
    prioritizing ethical conduct, organizations can rebuild trust and preserve their
    reputation for long-term success

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