Do you agree or disagree with the authors of these articles regarding the factors that led to the scandal?

Did you find the details of this “scandal” to be
Use a motivational theory covered in the textbook to
help explain why this might have happened.
What contributed to the problems? Do you agree or
disagree with the authors of these articles regarding the factors
that led to the scandal?
How do you think Dan Pink’s TED Talk relates to this

2015 “was widely viewed by directors as having minimized and understated problems, the panel’s report said. At Wells Fargo, Crushing Pressure and Lax Oversight Produced a Scandal Ms. Tolstedt’s lawyer, Enu Mainigi of Williams & Connolly, challenged the board’s findings. We strongly disagree with the report and its attempt to lay blame with Ms. Tolstedt,” Ms. Mainigi said in a written statement. “A full and fair examination of the facts will produce a different conclusion. The red flags were all there, waiting for somebody to stitch them together An increasing number of Wells Fargo customers were opening accounts and neglecting to make a deposit. By 2012, only 8o percent of newly opened accounts were being funded, compared with go percent in 2005, according to a report that a panel of the bank’s board members issued on Monday after an investigation into the bank’s sham accounts scandal. To make the sham accounts look legitimate, Wells Fargo bankers engaged in a practice called simulated funding, the board’s report said. This was an illegal sleight of hand in which “an employee transferred funds from one customer account to another sometimes unauthorized account (or deposited and withdrew the employee’s own funds) to make it appear that the second account had been funded by the customer Some of those unfunded accounts were ginned up by bankers- without customers’ permission to goose their sales numbers. Because of the way Ms. Tolstedt ran her department, the report said, employee turnover was high. Consequently, many bankers on the front lines were inexperienced and had less incentive to uphold the bank’s values than to meet sales goals. As early as 2004, a manager with Wells Fargo’s internal investigations group noted a sharp increase in “sales gaming cases”- instances in which bankers tinkered with customer accounts, moving money into and out of them, to and from authorized Turnover in Ms. Tolstedt’s unit reached “at least 3o percent in every period from January 2011 to December 2015, the report said. For the 12 months ending in October 2015, it was an eye-catching 41 percent. accounts. Employees “feel they cannot make sales goals without gaming the system,” said the manager, whose name was not provided in the report. The incentive to cheat is based on the fear of losing their jobs. Ms. Tolstedt was unconcerned, as one witness told the report’s investigators, because, in her view, “there were always people willing to work in Wells Fargo branches. The 2004 memo said sales gaming cases had risen to about 68o in 2004, from 63 in 2000. Some Wells Fargo branch employees have described health problems they experienced because of the crushing pressure, and the report offered glimpses of how bad things were. Daily and monthly “Motivator reports were issued, pitting individuals, branches and regions against one another in terms of sales goals. One reason that bank executives were willing to sweep things under the rug, the board’s report suggested, was that there was little evidence of harm to customers from the shady practices. But ultimately, the aggregated wrongdoing caught up with the bank, resulting in fines from regulators, a tainted brand and a swath of disgraced and fired executives. While few consumers need half a dozen accounts at the same bank, Wells Fargo boasted of striving to sell its customers at least that number. As Senator Elizabeth Warren, Democrat of Massachusetts, noted in her acerbic questioning of Mr. Stumpf at a Banking Committee hearing in September, he bragged in 2014 that Wells Fargo customers had an average of 6.17 accounts per household. Dozens of midlevel and lower-level employees were faulted by the investigators for covering up investigatory committee blamed most squarely were the former chairman and chief executive officer, John G. Stumpf, and the former head of the retail branch network Carrie L. Tolstedt. the scheme or going a g with it, but the two people whom the The sales pressure peaked each January, when the bank imposed higher daily targets as part of a Jump Into January campaign. Eankers “were encouraged to make prospect lists of friends and family members” who might open accounts, investigators said. Sometimes, bankers would sandbag,” or temporarily withhold, accounts opened in December in orderto meet their January goals. Ms. Tolstedt saw her department as a “sales organization, like department or retail stores, rather than a service-oriented financial institution, the report said. Further, Ms. Tolstedt was said to have kept hidden the aggregate number of people who were fired for setting up false accounts. The manager’s report to the board in October In the end, what doomed Wells Fargo was a predictably toxic mix: A combination of aggressive sales goals and lax executive oversight “coalesced and failed dramatically the board concluded.

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