Wells Fargo Mockup Wells Fargo’s agreed to pay $110 million dollars to customers because unrealistic sales goals prompted personal bankers to open over 2 million fake accounts, this settlement is over and above, the $3.2 million in fees refunded when the scandal became public in September 2016. The practice allegedly started in early 2009, notorious and unrealistic sales goals were the primary cause of the “widespread fraud”, according to a top Federal Reserve official (Egan, 2017). According to Warren Buffet, who owns 10% of Wells Fargo stock, failing to address the problem, was the real “terrible mistake” (Cummings & Malter, 2016). Was there oversite? One might think, how does this happen, how could they miss such an obvious problem? Using 2016 numbers, plus the recent lawsuit, the total financial cost to Wells Fargo is just over $298 million dollars, which sounds like a huge number, but compared to generally accepted operating statistics, it represents 0.3% of total revenue and 1% of 2016 profit. The financial impact is almost negligible. Similarly, the number of employees fired was 5,300 but compared to the total number of Wells Fargo employees (265,200) it is just under 2%. It might be a bit …show more content…
Using leader sense-making as a decision model might have a better chance of highlighting the true consequences of the unacceptable behavior and the possible ramifications if left unchecked. The forecasting strategy would uncover the critical causes and resulting consequences. The misguided incentive program created illegal behaviors, but the critical missing component was predicting the calamity. Even a novice manager could anticipate the negative press and loss of jobs. Had anyone considered “the worst-case scenario” (McClafferty, 2015), surely they would have quietly put a halt to the practice, returned all ill-gotten fees, reported the issues and resolution to their auditors, and rewarded the whistleblowers for preventing a potential