Business Proposal Final Draft

Business Proposal Final Draft

Business Proposal Rough Draft file is attached, need to add the topics below:

TOPIC: Banking Industry Organizational Ethics

1. Executive Summary (250 words) provides a short summary of the entire proposal so key stakeholders can see an overview of the proposal and understand it without reading the entire document. 

2. Change Management Plan (500 words) clearly articulates specific methods and strategies to be utilized to manage organizational changes associated with the selected solution implementation. 

3. Evaluating Success (250 words) summarize specific measures you will use to evaluate the success of the problem solution. 

4. Conclusion/Call to Action (100 words) provides specific steps you would like key stakeholders and sponsors to take in the implementation of the proposed solution. 




Loren Domingo-Tangco


Dr. Sladan Sinanovic

June 27, 2020

Purpose Statement

Wells Fargo company has been a leading banking and financial industry across the world. Most people have been using the company for investment and banking services such as finance and insurance, Asset management, foreign currency exchange, risk management, among other services. They are a preferred company due to the extensive services it offers to its customers across the world. The services and products being provided by the company are in excellent quality as well as a variety of options tailored to specific needs. This has brought some satisfaction among the customers musing the company services.

In recent years there have been many problems in the bank due to the increase of the cross-selling scandal problems that have even damaged the reputation of the company. Due to this scandal cases, the company has failed to achieve its mission which aims at satisfying the needs of customers and helping them succeed financially. Since the scandals faced by the company, the company has been receiving a lot of negative feedback and complaints from its customers that has led to reduced sales and customers stopping using the company services due to failure of company satisfying their needs.

The purpose of establishing a business proposal which will be used to address the issue of bank experiencing a high increase of cross-selling scandal cases with the company. Since recent times there have been a high increase in the cases and customer’s complaints, and the company is working hard to establish internal business proposals that will address the issue. The objective of this business proposal is identifying the reasons and putting together an action plan to solve the problems in the company.

Problem Statement

The bank has faced a high increase in cross-selling scandal cases, which has profoundly damaged its reputation. Per Tayan, “The mission and the value of the bank were to satisfy the customer’s needs and help them succeed financially”. Contrarily, a close look at the scandal and reasons for its existence went far away from the bank key goal. The problem is most likely to affect the company staff, shareholders as well as customers.

The Cross-selling scandal means fewer earnings for the shareholder, who are the critical beneficiaries of the profits attained through daily transactions (Tayan, 2019). In the course of the scandal the money lost will significantly reduce regular earnings. Customers of the bank are also other victims of the problem; the bank staff uses unethical means to exploit money from customers when unable to meet their daily targets. The employees of the company were also affected by the problem, those found guilty of opening new accounts without customer permission were laid off their duties. Opening of unauthorized customer accounts was fueled by high targets which were set by the management (Klemash et al. 2019).

The problem is based on self-interests, knowledge, and skills among the staff and poor organizational structure (Klemash et al. 2019). The action of the bank staff to exploit money from the customers to attain their daily targets is entirely unethical. Among the critical causes of the problem are the splitting of customer deposits, overbearing sales culture, employees’ misconducts, excessive pressure of employees by the top management, and Illicit practices (Tayan, 2019). The main goal is to identify a solution to the five leading causes of the scandal, which will help prevent the company staff from participating in any unethical practice that is not in line with its goals. The cross-selling scandal has caused significant loss of finances to both customers and company shareholders. Customers were able to lose significant amounts of money, which was withdrawn from their accounts without their consent.

The company should consider making the roles of different executive directors clear. Having a clear and distinct role will help in holding individual staff accountable. Caution employees from doing any form of the transaction without customers’ permission. Those found guilty of exploiting customers for self-interests should be laid off their duties and prosecuted in a court of law. The cross-selling cases which go against organizational ethics have highly increased among the bank employees. The targets set by the management are putting employees under pressure to perform. Pressure cause employees to involve these acts to meet the set goals.

Data and Research Findings

Using the qualitative data collected about the net income of Wells Fargo in from the year 2009 to 2019, the net income of the company was greatly affected by the cross-selling scandal in the company. The company lost almost $185 million due to the fines towards resolving the cross-selling scandal. The company also lost millions of dollars due to other criminal cases.

From the data obtained during the research, there are findings associated with the cross-selling scandal that faced the Wells Fargo bank. For instance, marketing management didn’t give enough incentives to the employees. During the scandal, we find that the incentives for the employees play an essential role in decision making. Improper design of the incentives with appropriate company culture may lead to some unethical decisions from the employees, which causes many problems in the company. For examples, it creates many issues from the reputation of the company to the value of the stock of the company.

Also, the incentives award distribution to the employees was based on the amount of the sales they made in the company. This made the employees work under pressure for them to make the right amount of sales. Although the executive managers were aware of the dilemma, they were still encouraging the employees to use unethical means to meet their sales quotas. The incentives were made too high for the employees to push them to get more customers for the company to open more accounts and different services; this increases the cross-selling scandals in the company.

Other problems have brought to the reduction of the net income and number of the customers in the company. Among this were the slow and distracted staff, slow customer services, fewer tellers in the bank, problems in the mobile and internet banking, slow account opening, loan complaints upon the issuance of Interagency Guidance on Sound Incentive Compensation Policies (IGSICP) policies in the year 2010 by New York Department of Financial service help in solving the cross-selling problem in the bank. The policies were supported by effective corporate governance.

Proposed Solution

There is a proposed solution put in place by banks to solve the problem in banks. For example, the proposed solution includes bank revising their metrics for the performance of employees to ensure that they do not involve in unethical practices to meet their set performance targets. This could be a way of reducing the scandals involving the employees since the employees will be having standard goals in banks which will be easy for them to achieve and thus no need of them using unethical practices to attain them.

The proposed solution will also provide various banks with strategies on how they will attain their targets that making it possible if the banks will be able to implement the plan during the operations. Also, this will be advantageous to most banks since they will be using the performance metrics to measure their performance and identify the areas where there is a need for improvement. It will also help them to know where they are doing the best and thus putting enough resources in the field to generate more income for the bank.

The only disadvantage of the proposed solution is that most of the banks will not be able to reach the standard target required. This will force them to use unethical methods to ensure that the standards required by banks. Also, the standard may be so high for some banks, especially those who are still young, thus forcing them to use deceitful ways to ensure that targets are attained. This will increase the cases of unethical practices in the bank rather than reducing them.

Another proposed solution is banks sharing their best practices of meeting their targets rather than abandoning them to meet them at their cost. This should be done from the branch level to ensure that there is the engagement of all staff with the customers, especially those staff who are handling the customer products. This will be more efficient for most banks since they will know which strategy can be used to achieve their objectives.

Therefore, this will reduce the cost of most banks will be reducing the cost of implementing strategies. It will help several banks with great ideas they can use to achieve their targets, especially those banks that are still developing. This will also help the Wells Fargo company to adopt ideas and practices which best suit them in achieving their targets and drop those practices that are not best in achieving their objectives.

The disadvantages of adopting these practices are the lack of enough resources such as capital, a workforce with necessary skills, and the best technology required. Some of these practices require high money and high level of technology which may be hard for some banks to achieve their targets. For instance, Wells Fargo may not be having employees with the necessary skills and experience to adopt these practices, thus making them use their methods that are unethical to reach their targets.

Another proposed solution is that banks should improve on the cross-selling communication process that employee-customer engagement is recorded and the quality of products offered gauged according to customer satisfaction. This will ensure the customers are involved in every product they are getting from the banks. This will help the banks to understand the needs of their customers and thus improving their products and services, thus giving satisfaction to the customers.

The only problem with the proposed solution is that most of the banks need to make more revenue without considering their customers. For instance, the Wells Fargo banks had put high targets for their employees. This force the employees using unethical practices of achieving these targets. The research that was done and the proposed solution that was implemented by Wells Fargo helps in reducing the glitches in the banks. It will also lessen the customer’s complaints among other issues in the bank. This can be seen from the data found from the research done in two years, 2012 and 2019.

Stakeholder Analysis and Benefits 

Stakeholder’s attitude towards organizational ethics:

· The investors are concerned with the ethical standards of the organization as

it will usually lead to a firm’s successful endeavors. They have full interest in the financial performance of a firm as lack of integrity among the management, workers, and finance department can lead to huge losses for the investor (Weiss, 2008).

· The creditors are interested with the ethical standard of the firm to

determine the capability of the organization in repaying the loans. An organization of low integrity is likely to close down or have huge financial debts making it hard for the firm to repay the lenders.

· The management is required to execute high ethical standards among the

employees to maintain the business’ reputation and long-term feasibility.

· Suppliers are involved in a sound ethical standard of the firm to discover

whether the firm will be able to pay the services rendered on time or as agreed. Unethical organization are often unable to follow through a contract.

The previous problem solution entailed background research of all employees to ensure high standards of ethics in the firms’ operations. This was to promote the culture of integrity and ensure questionable characters are uprooted from the organization. This will increase the confidence of the investors, financers, suppliers, the creditors, distributors, labor unions and others to the organization’s operations.

Stakeholder’s ideas for potential solution towards the firm’s ethical standards entails the firm forming a workforce with high integrity. It should set in place ethical standards regulations, punishments, and sanctions for those who breach the ethical code. There should be a set reward system for the highly ethical individuals to promote the culture in the organization. The firms should organize lessons, lectures, and symposium on ethics to promote the culture in the organization (Philip, 2003).

The government agencies can reprimand a firm who will breach the financial standards of the organization. They can provide legislation concerning the ethical breach of companies and the cases can be handled through the court. The stakeholders who will sponsor the implementation of the solution can provide support through financial incentives such as funding of the project. It will be coordinated by management within the workforce, to conform to the set ethical standards.

By solving the ethical problem, the customers are able to get proper financial services without bias, therefore, the investor’s investments are safeguarded. The creditor’s integrity in supplying the firm will increase due to high ethical standards of the firm, thus they are sure their loans will be repaid in time (Frooman, 1999).

The stakeholders who could lead to a roadblock in the solution will include the government agencies that can choose to disagree and disregard the firms’ ethical standards if they harm the employees. It can be portrayed by the media as a bad public image on the firms’ ethical systems. An ethical solution that can have a negative impact on the workers can be rejected by the labor unions.

Implementation Methods

There is recommendation on implementation methods and practices that will help the banks to achieve their targets. For instance, Wells Fargo has faced with the ethical issues which have significantly tarnish the reputation of the company. One of the recommended implementation methods to the company is refreshing the board of management together with top executive mangers. Since according to the data and findings gained from the problem, they are among the individuals who are responsible for the increase of the scandals in the banks.

The senior management of Wells Fargo demonstrated inefficiency in carrying out their duties, and thus the company should give a new face by getting new current board and new executives who are coming up with new organizational culture. This will to organize the employees using the new corporate culture, thus adopting new practices culture to achieve the targets. The new team management will help in improving the name of the company and restoring the trust in customers. This will help the company to sustain itself as well as increasing the revenue of the company. The new management team will help in readjusting the organizational culture of the Wells Fargo, improving the credibility and ethical performance of employees. A new corporate culture might be what is required to attain the anticipated change in this company.

The company should also establish an understanding of the values of business ethics. The Wells Fargo company should implement new leadership, training methods, and workshop programs to educate their employees the need for observing business ethics in the organization. It is the management and leader’s responsibilities of ensuring that they equip their employees with the essential knowledge on business ethics to avoid cases such as above scandals that could bring loss in the company revenue in terms of fines and penalties.

In every organization, the roles employees are redefined as being based on trust from the customers as they are the one who is engaging with the customers and handling the money of their customers. The violation of the business ethics by the employees in the organization will lead to detrimental consequences to the brand of the company the same effect, which affects Wells Fargo company. The violation of the business ethics may cost the company as the company will be fined and given penalties, and some may lose market share resulting from the damaged reputation.

Another implementation method is that Wells Fargo company should improve its customer relationship through creating a well-defined social responsibility program which supports both the customers and the community as a whole. Wells Fargo company should implement sponsorship programs and charity events to build the community. In doing this, it will increase the trust in their customers as well as developing their brand (Kumaran, 2015).


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Wells Fargo net income movement from 2009 to 2019TTM Net income (billion dollars) START 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 END 7.99 11.63 15.03 18 20.89 21.82 21.47 20.37 20.55 20.69 17.940000000000001 Increase START 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 END 5.62 3.6400000000000006 3.3999999999999986 2.9700000000000006 2.8900000000000006 0.92999999999999972 0.17999999999999972 0.14000000000000057 Decrease START 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 END 0.35000000000000142 1.0999999999999979 2.75 Start START 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 END 2.37 End START 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 END 17.940000000000001

Net income in billion dollars

Customer complaints in the 2012 yearCount Distracted staff Mobile/internet banking faults Slow Customer service Few tellers Slow staff Loan complaints Slow account opening 354 219 207 175 146 109 37 Cum. Count Distracted staff Mobile/internet banking faults Slow Customer service Few tellers Slow staff Loan complaints Slow account opening 354 573 780 955 1101 1210 1247

Customer complaints in the 2019 yearCount Distracted staff Fewer tellers Slow customer services Slow staff Mobile/internet banking faults Slow account opening Loan complaints 204 162 127 102 67 22 19 Cum. Count Distracted staff Fewer tellers Slow customer services Slow staff Mobile/internet banking faults Slow account opening Loan complaints 204 366 493 595 662 684 703

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