Requirement for Leadership and Organizational behaviour certification

1. TecdeMonterreyX MMLO01I.x
Leadership and organizational behavior
Individual Practice with peer assessment
Student name: Ozioma Olive Ekohchukwukelu
Username: Olive Ozioma
3. Discuss a news article that focused on a leadership crisis that happened.
I choose to talk about Wells Fargo because we have done this case analysis in class just a few
months ago
Please see the CNN link below for more information about Wells Frago:
https://r.search.yahoo.com/_ylt=AwrErZj6MqhkS8oNjgAPxQt.;_ylu=Y29sbwNiZjEEcG9zAzEEdn
RpZANMT0NVSTA5M1RfMQRzZWMDc3I-
/RV=2/RE=1688773499/RO=10/RU=https%3a%2f%2fwww.cnn.com%2f2021%2f01%2f15%2fin
vesting%2fwells-fargo-bank-earnings-
scandal%2findex.html/RK=2/RS=LQ2_OXdtkFKzVlIkSusZY0arF5g-
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My discussion:
1. What happened? (Background, brief description of events, specific leadership actions)
The Wells Fargo leadership crisis that unfolded since 2017 involved a series of unethical
practices and mismanagement that severely impacted the company's revenue and reputation. It
was revealed that Wells Fargo employees had been creating millions of unauthorized bank
accounts and credit card applications in order to meet aggressive sales targets. The scandal
came to light when it was discovered that employees had opened these accounts without
customers' knowledge or consent.
The specific leadership actions involved setting unrealistic sales goals and creating a high-
pressure sales culture that incentivized employees to engage in fraudulent activities. Senior
executives were accused of turning a blind eye to the unethical practices or even encouraging
them.
2. What were the results? (Real or potential. Try to include both positive and negative
possibilities. Even if the event seemed clearly good or bad, consider unintended
consequences.)
The consequences of the Wells Fargo leadership crisis were significant and had both positive
and negative impacts. On the negative side, the company faced a wave of public outrage and
lost the trust of its customers. The scandal led to numerous lawsuits, regulatory investigations,

2. and hefty fines. Wells Fargo had to pay billions of dollars in settlements and compensation to
affected customers. The incident also tarnished the company's reputation and led to a decline in
its stock price.
On the positive side, the crisis prompted a thorough review of the company's practices and
culture. Wells Fargo implemented reforms to improve its internal controls, compliance, and
ethics policies. The incident also served as a wake-up call for the entire banking industry,
leading to increased scrutiny and regulatory reforms to prevent similar unethical practices.
3. Why did this happen? (Consider all possible factors, including the people and the situation)
Several factors contributed to the Wells Fargo leadership crisis. One key factor was the high-
pressure sales culture and aggressive sales targets set by top-level management. These goals
put immense pressure on employees to meet unrealistic sales quotas, leading some to engage
in fraudulent activities to meet those targets.
Another factor was the lack of adequate oversight and accountability within the organization.
Senior executives failed to address the unethical behavior or failed to detect it in a timely
manner, allowing it to persist and escalate. The hierarchical structure of the company may have
hindered effective communication and reporting of concerns.
Furthermore, the lack of a strong ethical culture and an environment that prioritized short-term
financial gains over long-term customer relationships played a significant role. The company's
leadership failed to foster a culture of integrity and ethical conduct, contributing to the erosion of
trust and the escalation of unethical practices.
4. What class concepts are relevant to this situation? (Mention at least one concept from class
and how they can be used to interpret the situation.)
One relevant concept from a leadership or management class is organizational culture and
constant politics in the organization. The Wells Fargo crisis highlights the crucial role of
organizational culture in shaping employee behavior and ethical conduct. The toxic sales culture
and aggressive targets set by the company's leadership created an environment where
employees felt compelled to engage in unethical practices to meet their goals. This emphasizes
the importance of fostering a strong ethical culture within organizations, where values and
ethical behavior are prioritized and reinforced from the top down.
Top management were also very political with their decisions. Management politics at Wells
Fargo contributed to the management crisis by creating a culture that prioritized short-term
financial gains and aggressive sales targets over ethical conduct and long-term customer
relationships. This focus on meeting unrealistic goals and the lack of effective oversight allowed
unethical practices to persist and escalate.

3. 5. What did you learn from this? (Broader lessons that might apply to other situations or
problems.)
The Wells Fargo leadership crisis serves as a cautionary tale for organizations and leaders
across industries. Some broader lessons that can be learned from this situation include:
a) Setting realistic goals and targets: Unrealistic and overly aggressive goals can lead to
unethical behavior and damage the long-term reputation of an organization. It is important for
leaders to set achievable and ethical targets for their employees.
b) Fostering an ethical culture: Organizations should prioritize and reinforce ethical behavior
through strong leadership, clear values, and ethical guidelines. Building a culture of integrity can
help prevent unethical practices and enhance trust among employees and customers.
c) Effective oversight and accountability: Leaders should establish robust oversight mechanisms
and encourage open communication channels for reporting concerns. It is crucial to have
checks and balances in place to identify and address unethical behavior in a timely manner.
d) Compliance and regulatory adherence: Organizations must prioritize compliance with
regulations and ensure that employees are trained and aware of ethical guidelines. Proactive
compliance measures can help prevent legal and reputational risks.
e) Rebuilding trust: Rebuilding trust after a crisis requires transparency, accountability, and
genuine efforts to rectify the issues. Organizations should prioritize regaining the trust of
stakeholders through open communication, sincere apologies, and tangible actions to prevent
similar incidents in the future.