Wells Fargo Case Study

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Coursework Assessment Brief
Module code/name MSIN0031 Managerial Decision Making
Module leader name Dr. Tom Taiyi Yan
Academic year 2021/22
Term 1
Assessment title Assignment 2
Individual/group assessment Individual
Return and status of marked assessments: Within 4 weeks from the date of submission as per UCL guidelines. The
module team will update you if there are delays through unforeseen circumstances (e.g. ill health). All results when
first published are provisional until confirmed by the Examination Board.
Copyright Note to students: Copyright of this assessment brief is with the module leader(s) named above. If this
brief draws upon work by third parties (e.g. Case Study publishers) such third parties also hold copyright. It must not
be copied, reproduced, transferred, distributed, leased, licensed or shared any other individual(s) and/or
organisations, including web-based organisations, without permission of the copyright holder(s).
Academic Misconduct: Academic Misconduct is defined as any action or attempted action that may result in a
student obtaining an unfair academic advantage. Academic misconduct includes plagiarism, obtaining help
from/sharing work with others be they individuals and/or organisations or any other form of cheating. Refer to
Academic Manual Section 9: Student Academic Misconduct Procedure – 9.2 Definitions.
Referencing: You must reference and provide full citation for ALL sources used, including articles, text books, lecture
slides and module materials. This includes any direct quotes and paraphrased text. If in doubt, reference it. If you
need further guidance on referencing please see UCL’s referencing tutorial for students here: https://libraryguides.ucl.ac.uk/referencing-plagiarism/welcome. Failure to cite references correctly may result in your work being
referred to the Academic Misconduct Panel.
Content of this assessment brief
Section Content
A Core information
B Coursework brief and requirements
C Module learning outcomes covered in this assessment
D Groupwork instructions (if applicable)
E How your work is assessed
F Additional information
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Section A: Core information
Submission date 30/11/2021
Submission time Noon
Assessment is marked out of: 100
% weighting of this assessment
within total module mark
25%
Maximum word count/page
length/duration
1000 words, +/- 10% [i.e. 990-1100 words] Footnotes, appendices, tables,
figures, diagrams, charts included
in/excluded from word count/page
length?
Included in Word Count
Bibliographies, reference lists
included in/excluded from word
count/page length?
Excluded from Word Count
Penalty for exceeding word
count/page length
10 percentage points deduction, capped at 40% for Levels 4,5, 6,
and 50% for Level 7. Refer to Academic Manual Section 3:
Module Assessment – 3.13 Word Counts.
Penalty for late submission Standard UCL penalties apply. Students should refer to Refer to
https://www.ucl.ac.uk/academic-manual/chapters/chapter-4-
assessment-framework-taught-programmes/section-3-moduleassessment#3.12
Submitting your assessment The assignment MUST be submitted to the module submission
link located within this module’s Module ‘Submissions’ Tab by
the specific deadline.
Anonymity of identity. Normally, all
submissions are anonymous unless
the nature of the submission is such
that anonymity is not appropriate,
illustratively as in presentations or
where minutes of group meetings
are required as part of a group work
submission
The nature of this assessment is such that anonymity is required.
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Section B: Assessment Brief and Requirements
*This case report was inspired by Wells Fargo, but contains fictitious elements. Names are not real to
protect the anonymity of these individuals.
Overview of the scandal:
Forbes article: https://tinyurl.com/eubxwt4p
Financial Times video: https://tinyurl.com/cet4n6r3
Core Requirement
Imagine you are an external consultant of Wells Fargo. This bank has been involved in a massive
fraudulent scandal where “thousands of employees opening millions of accounts for customers under
false pretenses or without customer consent often by misusing customers’ identities”. You have been
asked to read the case report (see below) and identify the ethical issues and recommend solutions to
prevent the bank from engaging in fraud again.
Identify four issues from ethical lapses and moral disengagement mechanisms that upper management
and employees engaged in that facilitated their unethical actions.
• Two of these issues should be engaged in by upper management, and two of these issues
should be engaged in by employees.
• For each issue identified, propose a tactic that the relevant parties involved can engage in
to avoid or mitigate the issue in the future.
Wells Fargo Case Study
Wells Fargo is well known for its strategy of cross-selling, where they encourage existing customers to open
more accounts with them (e.g. new credit cards), rather than approaching new customers to open a new
bank account. The purpose of this strategy was supposedly to help develop in-depth relationships with
customers. However, as Wells Fargo’s stock price grew substantially due to some initial success of crossselling, it continued to double down on “deepening client relationships” that eventually led to employees
creating millions of fake accounts for thousands of clients, resulting in Wells Fargo paying at least $3 billion
in fines and litigation. How did a regular sales practice result in a multi-billion-dollar scandal?
One main reason was unrealistically high management expectations. An ex-CEO wrote in the 2010 annual
report, “I’m often asked why we set a cross-sell goal of eight [i.e.each client opens eight accounts with the
firm]. The answer is it rhymed with ‘great.’ Perhaps our new cheer should be: ‘Let’s go again, for ten!’”. As
a result, local branch managers felt intense pressure to fulfil their quotas by nudging their employees to
create fake accounts. Once the practice started, it spreads through the branch and became a systemic habit.
According to reports, branch managers held several daily meetings to check on employees’ progress.
Employees were encouraged to fulfil their quotas through both incentivisation and threat of punishment.
When they were able to achieve their goals, not only were they awarded up to 15-20% of bonuses, they
also received favourable treatments such as accolades and fast-track promotion. On the other hand, those
who were not able to meet these daily sales quotas were subjected to regular reprimanding, demotion, and
eventually terminated.
How did they get away with creating fake accounts? As one worker, Adam, said “Honestly, it was really easy
once you’ve successfully opened the first [fake] account. No one bothers to find out, and really, there was
no repercussions for the customer as well. I made sure not to open the most expensive accounts for my
clients, because I didn’t want to be greedy. I just opened the basic accounts with a minimal fee for my clients
to pay. This way I could keep my job and practically no harm was done. Plus, everyone else was doing it, so
it seemed like an acceptable tactic that I could use as well. If others can do it, why can’t I?” Some managers
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openly encouraged such sales tactics too, and fired those who were not willing to comply with their
instructions. Further, whistle-blowers who tried reporting fake account creation and the unrealistic sales
quotas were swiftly dismissed. For example, Mandy, an ex-employee, reported unethical conduct to the
bank’s ethics hotline and even approached her manager’s superiors. However, her issues were deemed as
a misunderstanding, and not pursued further. She was subsequently fired for not meeting her own quotas,
even though she was on medical leave.
Even after the scandal broke out, responsibility was still being pushed onto others, particularly low-level
employees. Though approximately 5,300 employees were fired for the creation of fake bank accounts, but
top management executives saw little repercussions. Resisting firing one of their own, some were asked to
retire but with millions in cash and stock options. In a Senate committee meeting, ex-CEO Sanders was
reluctant to assume full responsibility for this decision and repeatedly said “though I am the Chairman of
the board, and in charge of Wells Fargo, I cannot influence decisions to fire senior management. The board
should be the one to make the decisions, not me. I cannot speak for the board.” When employees were
being questioned about their wrongdoing, they attributed blame on customer’s negligence. They blamed
customers for not reading the fine print properly, which stated that the pre-signed applications gave the
bankers authority to manage their financial accounts at the bank for them within reason. Some of these
customers were reportedly blue-collar workers, of whom some were illiterate and had reported that the
banking employees had explained the documents to them and nothing was mentioned about the authority
given to them.
Additional contextual sources:
Wells Fargo’s whistleblower video: https://tinyurl.com/bchpjmt4
Opinion analysis on unethical motivations: https://tinyurl.com/5cfncsn3
Lawsuit against Wells Fargo: https://tinyurl.com/5ffya24x
List of Ethical Lapses:
1. In-group favoritism
2. Slippery-slope effect
3. Peer Influence and Contagious unethicality
4. Obedience to Authority
List of Moral Disengagement Mechanisms:
1. Euphemistic labelling
2. Distortion of consequences
3. Displacement of responsibility
4. Diffusion of responsibility
5. Attribution of blame
A few notes:
1. I recommend the following structure (also look at the rubric posted on Moodle for
additional information):
a. You write four paragraphs, each paragraph deals with one ethical lapse or one
moral disengagement mechanism. Two paragraphs should be about upper
management, and two paragraphs should be about employees.
i. You define the concept and cite the person who discovered the
concept.
ii. Using a specific example, you write about how the ethical lapse or
moral disengagement mechanism affected management/employees.
iii. You write about how they could avoid letting the ethical lapses, and
moral disengagement mechanism influence them by applying one of
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the avoidance tactics (see lecture slides and chapter 11 in Bazerman &
Moore to be found as pdf on the Moodle Home tab for MSIN0031), or
by finding another avoidance tactic in the academic literature, or by
proposing a new avoidance tactic.
2. Please write in third person.
3. There are many issues that can be identified. Pick different examples for each issue
you identify.
4. It is very important to cite the appropriate academic literature whenever you define
a concept or write about an idea that you discovered in someone else’s writing. Citing
definitions and all ideas that are not your own is paramount.
5. Some citations can be found in Bazerman & Moore chapter 7 (starting on p. 122) on
Moodle. You can find the references at the very end of the book. Other references
can be found in the reading for the module (assigned and supplementary) for Session
4, 5 and 6. The lecture slides usually indicate references in the lower left-hand corner,
too. It does not matter which referencing style you use, but it is important to stick to
one style throughout.
It is inappropriate to cite blogs and websites as anyone can create them and we
cannot necessarily believe what they write. Most journal articles, on the other hand,
are peer reviewed, which indicates that there has been a quality check on the
research conducted. You can easily find journal articles on Google Scholar, which also
provides the references in a number of different styles for you by clicking on the “.
6. The definitions of the ethical lapses and moral disengagement mechanisms can be
found in the readings and also on my lecture slides. Make sure you put them into your
own words.
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Section C: Module Learning Outcomes covered in this
Assessment
This assessment contributes towards the achievement of the following stated module Learning
Outcomes as highlighted below:
• Ability to define and use psychological concepts appropriately
• Concise and precise articulation of ideas
• Application of theoretical constructs (ethical lapses and moral disengagement
mechanisms) to real life phenomena
• Creative problem solving
• Be able to name and define factors that affect decision making such as ethical
lapses and moral disengagement mechanisms
• Understand how to avoid decision traps and thus become a better decision maker.
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Section D: Groupwork Instructions (where
relevant/appropriate)
NA
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Section E: How your work is assessed
Within each section of this assessment you may be assessed on the following aspects, as applicable and
appropriate to this assessment, and should thus consider these aspects when fulfilling the requirements of
each section:
• The accuracy of any calculations required.
• The strengths and quality of your overall analysis and evaluation;
• Appropriate use of relevant theoretical models, concepts and frameworks;
• The rationale and evidence that you provide in support of your arguments;
• The credibility and viability of the evidenced conclusions/recommendations/plans of action
you put forward;
• Structure and coherence of your considerations and reports;
• Appropriate and relevant use of, as and where relevant and appropriate, real world examples,
academic materials and referenced sources. Any references should use either the Harvard OR
Vancouver referencing system (see References, Citations and Avoiding Plagiarism)
• Academic judgement regarding the blend of scope, thrust and communication of ideas,
contentions, evidence, knowledge, arguments, conclusions.
• Each assessment requirement(s) has allocated marks/weightings.
Student submissions are reviewed/scrutinised by and internal assessor and are available to an External
Examiner for further review/scrutiny before consideration by the relevant Examination Board.
It is not uncommon for some students to feel that their submissions deserve higher marks (irrespective of
whether they actually deserve higher marks). To help you assess the relative strengths and weaknesses of
your submission please refer to UCL Assessment Criteria Guidelines, located at
https://www.ucl.ac.uk/teaching-learning/sites/teaching-learning/files/migratedfiles/UCL_Assessment_Criteria_Guide.pdf
The above is an important link as it specifies the criteria for attaining 85% +, 70% to 84%, 60% to 69%, 50%
to 59%, 40% to 49%, below 40%.
You are strongly advised to not compare your mark with marks of other submissions from your student
colleagues. Each submission has its own range of characteristics which differ from others in terms of
breadth, scope, depth, insights, and subtleties and nuances. On the surface one submission may appear to
be similar to another but invariably, digging beneath the surface reveals a range of differing
characteristics.
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Section F: Additional information from module leader
Marking Rubric
No marks (0) Very poor 20% Poor 40% Needs more work
45%
Satisfactory 50% Very Satisfactory 55%
Application of
concepts to
decision-making
40%
We use the
phrase “the
concepts” to
refer to ethical
lapse and moral
disengagement
mechanisms
Either required
content is missing or
zero has been
awarded for
examination
irregularity(ies)
The identification of
ethical lapse/moral
disengagement s in
relation to examples
in the case study, in
all respects, does not
meet the
requirements of the
brief. Concepts are
not defined and not
applied to the case
study.
The requirements
of the brief have
largely been
missed. Too few
concepts have
been applied (and
ill or not all
defined) or the
application does
not make sense in
relation to the case
study.
The concepts are ill
defined. There are
a considerable
number of errors
and
inconsistencies.
The concepts are
applied to a limited
extent. Application
should be clearer
and ethical lapses
could be better
defined.
The definition and application
of the concepts generally
have a clear structure,
although they would benefit
from further development.
Some errors and
inconsistencies.
Quite good
60%
Good 65% Very good
70%
Excellent
75%
Outstanding
80%
Publishable standard
100%
The definition and
application of the
concepts generally
have a clear
structure. Some
minor errors and
inconsistencies in
places.
Good solid work.
Demonstrates effort
to provide proper
definitions and
application of the
concepts to the case
study make sense.
Meets all of the
criteria at the basic
level.
Proper definitions
of all ethical lapses.
Very good
application of the
concepts to the
case study. Meets
all of the criteria at
an advanced level.
Exemplary
definitions of
concepts and
exemplary
application of the
ethical lapses to the
case study. No
errors or
inconsistencies.
Outstanding quality
of definitions.
Shows creativity in
the application of
the concepts to the
case study. No
errors or
inconsistencies.
Industry and research could
learn from this way of
applying concepts to the case
study. No errors or
inconsistencies.
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No marks (0) Very poor 20% Poor 40% Needs more work
45%
Satisfactory 50% Very Satisfactory 55%
Description and
explanation of how
to avoid the ethical
lapses chosen
40%
Avoidance tactics
from Chapter 11 in
B&M as well as
those discussed for
moral
disengagement
during the lecture
could be built on.
Other avoidance
tactics from
academic research
can be built on.
You can also come
up with your own.
We use the phrase
“the concepts” to
refer to ethical
lapse and moral
disengagement
mechanisms
Either required
content is missing
or zero has been
awarded for
examination
irregularity(ies)
Either no
avoidance tactics
are presented or
the avoidance
tactics offered are
not directly linked
to the concepts
mentioned in the
paper.
Generally, the
avoidance tactics
are quite vague or
not applicable and
would not provide
sufficient guidance
on how to
implement them.
Some effort to link
avoidance tactics to
the concepts. There
are a considerable
number of errors
and inconsistencies.
A fair effort, but
the avoidance
tactics need to be
much more clearly
linked to the
concepts.
A fair start on linking the
avoidance tactics, although
some aspects need to be
developed further to ensure
clearer guides on how to
avoid the concepts.
Quite good
60%
Good 65% Very good
70%
Excellent
75%
Outstanding
80%
Publishable standard
100%
The avoidance
tactics are generally
linked to the
concepts, although
clarity of the link
and scope could be
improved in places.
Avoidance tactics
are generally,
clearly linked to
concepts. Some
elements could be
fine-tuned further,
but overall good,
solid work.
Very good linking
of avoidance
tactics to the
concepts.
Avoidance tactics
will be very
effective.
Excellent capture of
the link between
avoidance tactics
proposed for each
concepts and
relevant, realistic
success criteria (i.e.
how would you
know that the
avoidance tactic
has worked?).
Outstanding
avoidance tactics
(including some
original ones that
build on theory)
that are
exceptionally well
linked to the
concepts and
success criteria (see
what is meant to
the left).
These theoretically derived
new avoidance tactics could
inform industry practice and
are worthy of research
pursuit to test their viability.
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No marks (0) Very poor 20% Poor 40% Needs more work
45%
Satisfactory 50% Very Satisfactory 55%
Scholarly Practice
20%
Core text:
Bazerman and
Moore book
Citing the journal
articles covered in
this Module shows
evidence of
engagement with
the material.
Either required
content is missing
or zero has been
awarded for
examination
irregularity(ies)
No evidence of
reading. Views are
unsupported and
non-authoritative.
Academic
conventions largely
ignored.
Evidence of little
reading appropriate
for the level of
study, and/or
indiscriminate use
of sources.
Academic
conventions used
weakly.
Some evidence of
reading, with
superficial linking to
given texts. Some
academic
conventions
evident, but
inconsistent, with
major weaknesses.
Fair knowledge of
core texts.
Literature used, but
descriptively.
Academic skills
mixed.
Good knowledge of core
texts. Literature used well,
but descriptively. Academic
skills mixed to good.
Quite good
60%
Good 65% Very good
70%
Excellent
75%
Outstanding
80%
Publishable standard
100%
Good knowledge of
literature beyond
core texts. Some
application of
literature rather
than just
descriptive. Good
use of academic
conventions, with
room for
improvement.
Knowledge of the
field of literature
appropriately used
to support views.
Research-informed
literature
integrated into the
work. Good use of
academic
conventions.
Very good
knowledge of the
field of literature
appropriately used
to support views.
Research-informed
literature very well
integrated into the
work. Very good
use of academic
conventions.
Excellent
knowledge of the
field of literature
appropriately used
to support views.
Research-informed
literature
exceptionally wellintegrated into the
work. Excellent use
of academic
conventions.
Critical engagement
with appropriate
reading. Knowledge
or researchinformed literature
embedded in the
work. Consistently
accurate use of
academic
conventions.
Exceptionally wide range of
relevant literature used
critically to inform argument,
balance discussion and/or
inform problem-solving.
Consistently accurate use of
academic conventions.