Perhaps you remember the scandal surrounding Wells Fargo Bank in 2016
Read Chapter 11: https://drive.google.com/
From reading the chapter, you know that utilizing the correct organizational Structure is essential if an organization is to be successful and achieve its Strategic goals.
Perhaps you remember the scandal surrounding Wells Fargo Bank in 2016 when an LA Times reporter broke the story that the bank had opened more than 2.1 million fraudulent accounts. A year later, investigations showed that more than 3.5 million improper accounts were opened due to predatory sales tactics, ultimately leading to more than $3 billion in fines for the bank.
After several years of turmoil, Charles Scharf was recruited as CEO from Chase Bank in New York. A short time later, a Wall Street Journal headline article stated “Scharf puts Stamp on Wells Fargo with Overhaul of Reporting Lines.” To rebuild the bank, his first major decision was to re-structure the bank’s three business units into five, promising that this new “organizational model… will bring greater focus and accountability” (WSJ 2/11/20).
- Scharf is clearly moving from a Decentralized structure to a more Centralized one. Of the other five key elements in Organizational Design (Specialization, Departmentalization, Formalization, Span of Control, Chain of Command) Which TWO would you also recommend he also change, if he is seeking more focus and accountability and the total elimination of any illegal behavior?
- It appears that Scharf will make Wells Fargo a more Mechanistic Organization. Is this a good idea? Why or Why Not?
- What are the differences between a Mechanistic organization and an Organic Organization? Where would you yourself prefer to work? Why?
Answer preview Perhaps you remember the scandal surrounding Wells Fargo Bank in 2016
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