Read the following case and assess the several concepts and (20)

Characteristics from the field of Management that the case illustrates.

Justify using instances from the case.

Wells Fargo, Crisis and Scandal The recent widespread scandal at Wells Fargo

jolted and shocked the corporate world. How could such internal corrupt and

outrageously illegal and unethical activities by professionals have occurred? Wells

Fargo is "an American multinational financial services company headquartered in

San Francisco, California" with offices nationwide and "the world's second-largest

bank by market capitalization and the third largest bank in the U.S. by total assets."

In September 2016 it was discovered that the company was continuing to create

fake customer accounts to show positive financial activity and gains. 5,000

salespeople had created 2 million fake customer accounts to meet high-pressure

internal sales goals, including a monthly report called the "Motivator ".

The out-of-control sales leadership pressured sales employees to meet unrealistic,

outrageous sales targets. Dramatically unrealistic sales goals propelled by

continuous pressure from management coerced employees to open accounts for

customers who didn't want or need them. "Some Wells Fargo bankers impersonated

their customers and used false email addresses like n..e@wellsfargo.com,

according to a 2015 lawsuit filed by the city of Los Angeles."

The "abusive sales practices claimed in a lawsuit that Wells Fargo employees

probably created 3.5 million bogus accounts" starting in May 2002. Wells Fargo is

awaiting final approval to settle that case for $142 million. However, regulators and

investigations found that the misconduct was far more "pervasive and persistent"

than had been realized. "The bank's culture of misconduct extended well beyond the

original revelations." For example, regulators found that the company was (1)

"overcharging small businesses for credit card transactions by using a 'deceptive'

63-page contract to confuse them." (2) The company also charged at least 570,000

customers for auto insurance they did not need. (3)The firm admitted that it found

20,000 customers who could have defaulted on their car loans from these bogus

actions; (4) The company also had created over 3.5 million fake accounts attributed

to customers who had no knowledge of such accounts.

Wells Fargo has had to testify before Congress over these charges, which have

amounted to $185 million dollars, and more recently the company has been ordered

by regulators to return $3.4 million to brokerage customers who were defrauded. The

CEO and management team have been fired and had millions of dollars withheld

from their pay.

In the aftermath of the scandal, even though Wells Fargo executives were not

imprisoned for the extensive consumer abuses committed by the company, the

CFPB (Consumer Financial Protection Bureau) and Office of the Comptroller of the

Currency (OCC) imposed a $1 billion fine on Wells Fargo for consumer-related

abuses regarding auto loan and mortgage products. The OCC also forced the

company to allow regulators the authority to enforce several actions to prevent future

abuses, such as and including "imposing business restrictions and making changes

to executive officers or members of the bank's board of directors." The new president

of the company, Tim Sloan, stated, "What we're trying to do, as we make change in

the company and make improvements, is not just fix a problem, but build a better

bank, transform the bank for the future."