Wells Fargo Case Study

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B. Firms often reprimand the offenders for misconduct and around half of them lose jobs. The labor market partially undoes firm-level discipline by rehiring such advisers. Firms that hire these individuals also have higher rates of prior misconduct themselves, suggesting “matching on misconduct”. Wells Fargo has been ranked third worst by the cited study in hiring employees with a black mark. Repeat of a misconduct is five times more likely amongst prior offenders (Mark Egan, 2016).

Thus it’s a clear case that Wells Fargo is in a viscous cycle of misconduct and fraud. Promoting the COO Tim Sloan to CEO is not nearly radical enough. I would like to argue that with his sponsorship, a new transformation team can work towards making wholesale changes. Robert Nardelli transformed Home Depot to a lean and efficient organization while after his departure Blake could use that platform and make the organization highly profitable(Zeynep Ton, 2009). The culture change in Wells Fargo needs to provide a safe space for employees to voice opinion and feedback.

Coupling the hard and the soft aspects, Wells Fargo can turn around the current challenges. By reviewing its revenue booking and other accounting metrics while pursuing a culture change within the organization is the best way to go.

Works Cited

Mark Egan, G. M. (2016). The Market for Financial Adviser Misconduct.

Perez, S. (2014, 10 14). Yahoo Finance. Retrieved 04 14, 2017, from http://finance.yahoo.com/news/why-wells-fargo-future-goals-210002487.html

Reuters. (2017, 04 14). Reuters. Retrieved 04 14, 2017, from http://uk.reuters.com/article/uk-banks-auditors-britain-idUKBREA261AS20140307

Simply Wall Street. (2017, 04 14). Retrieved 04 14, 2017, from https://simplywall.st/NYSE:WFC.PRX/wells-fargo

The Market Mogul. (2017, 04 14). Wells Fargo: Financial Black Sheep. The Market Mogul.

Zeynep Ton, C. R. (2009). The Home Depot Inc. Harvard Business .

Egan, Mark and Matvos, Gregor and Seru, Amit, The Market for Financial Adviser Misconduct (January 1, 2017). Available at SSRN: https://ssrn.com/abstract=2739170 or http://dx.doi.org/10.2139/ssrn.2739170