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Organizational Behavior

Critical Thinking Case

Organizational BehaviorCritical Thinking Case
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Table of contents
  1. Preface
  2. 1 Management and Organizational Behavior
    1. Introduction
    2. 1.1 The Nature of Work
    3. 1.2 The Changing Workplace
    4. 1.3 The Nature of Management
    5. 1.4 A Model of Organizational Behavior and Management
    6. Key Terms
    7. Summary of Learning Outcomes
    8. Chapter Review Questions
    9. Critical Thinking Case
  3. 2 Individual and Cultural Differences
    1. Introduction
    2. 2.1 Individual and Cultural Factors in Employee Performance
    3. 2.2 Employee Abilities and Skills
    4. 2.3 Personality: An Introduction
    5. 2.4 Personality and Work Behavior
    6. 2.5 Personality and Organization: A Basic Conflict?
    7. 2.6 Personal Values and Ethics
    8. 2.7 Cultural Differences
    9. Key Terms
    10. Summary of Learning Outcomes
    11. Chapter Review Questions
    12. Management Skills Application Exercises
    13. Managerial Decision Exercises
    14. Critical Thinking Case
  4. 3 Perception and Job Attitudes
    1. Introduction
    2. 3.1 The Perceptual Process
    3. 3.2 Barriers to Accurate Social Perception
    4. 3.3 Attributions: Interpreting the Causes of Behavior
    5. 3.4 Attitudes and Behavior
    6. 3.5 Work-Related Attitudes
    7. Key Terms
    8. Summary of Learning Outcomes
    9. Chapter Review Questions
    10. Management Skills Application Exercises
    11. Managerial Decision Exercises
    12. Critical Thinking Case
  5. 4 Learning and Reinforcement
    1. Introduction
    2. 4.1 Basic Models of Learning
    3. 4.2 Reinforcement and Behavioral Change
    4. 4.3 Behavior Modification in Organizations
    5. 4.4 Behavioral Self-Management
    6. Key Terms
    7. Summary of Learning Outcomes
    8. Chapter Review Questions
    9. Management Skills Application Exercises
    10. Managerial Decision Exercises
    11. Critical Thinking Case
  6. 5 Diversity in Organizations
    1. Introduction
    2. 5.1 An Introduction to Workplace Diversity
    3. 5.2 Diversity and the Workforce
    4. 5.3 Diversity and Its Impact on Companies
    5. 5.4 Challenges of Diversity
    6. 5.5 Key Diversity Theories
    7. 5.6 Benefits and Challenges of Workplace Diversity
    8. 5.7 Recommendations for Managing Diversity
    9. Key Terms
    10. Summary of Learning Outcomes
    11. Chapter Review Questions
    12. Management Skills Application Exercises
    13. Managerial Decision Exercises
    14. Critical Thinking Case
  7. 6 Perception and Managerial Decision Making
    1. Introduction
    2. 6.1 Overview of Managerial Decision-Making
    3. 6.2 How the Brain Processes Information to Make Decisions: Reflective and Reactive Systems
    4. 6.3 Programmed and Nonprogrammed Decisions
    5. 6.4 Barriers to Effective Decision-Making
    6. 6.5 Improving the Quality of Decision-Making
    7. 6.6 Group Decision-Making
    8. Key Terms
    9. Summary of Learning Outcomes
    10. Chapter Review Questions
    11. Management Skills Application Exercises
    12. Managerial Decision Exercises
    13. Critical Thinking Case
  8. 7 Work Motivation for Performance
    1. Introduction
    2. 7.1 Motivation: Direction and Intensity
    3. 7.2 Content Theories of Motivation
    4. 7.3 Process Theories of Motivation
    5. 7.4 Recent Research on Motivation Theories
    6. Key Terms
    7. Summary of Learning Outcomes
    8. Chapter Review Questions
    9. Management Skills Application Exercises
    10. Managerial Decision Exercises
    11. Critical Thinking Case
  9. 8 Performance Appraisal and Rewards
    1. Introduction
    2. 8.1 Performance Appraisal Systems
    3. 8.2 Techniques of Performance Appraisal
    4. 8.3 Feedback
    5. 8.4 Reward Systems in Organizations
    6. 8.5 Individual and Group Incentive Plans
    7. Key Terms
    8. Summary of Learning Outcomes
    9. Chapter Review Questions
    10. Management Skills Application Exercises
    11. Managerial Decision Exercises
    12. Critical Thinking Case
  10. 9 Group and Intergroup Relations
    1. Introduction
    2. 9.1 Work Groups: Basic Considerations
    3. 9.2 Work Group Structure
    4. 9.3 Managing Effective Work Groups
    5. 9.4 Intergroup Behavior and Performance
    6. Key Terms
    7. Summary of Learning Outcomes
    8. Chapter Review Questions
    9. Management Skills Application Exercises
    10. Managerial Decision Exercises
    11. Critical Thinking Case
  11. 10 Understanding and Managing Work Teams
    1. Introduction
    2. 10.1 Teamwork in the Workplace
    3. 10.2 Team Development Over Time
    4. 10.3 Things to Consider When Managing Teams
    5. 10.4 Opportunities and Challenges to Team Building
    6. 10.5 Team Diversity
    7. 10.6 Multicultural Teams
    8. Key Terms
    9. Summary of Learning Outcomes
    10. Chapter Review Questions
    11. Management Skills Application Exercises
    12. Managerial Decision Exercises
    13. Critical Thinking Case
  12. 11 Communication
    1. Introduction
    2. 11.1 The Process of Managerial Communication
    3. 11.2 Types of Communications in Organizations
    4. 11.3 Factors Affecting Communications and the Roles of Managers
    5. 11.4 Managerial Communication and Corporate Reputation
    6. 11.5 The Major Channels of Management Communication Are Talking, Listening, Reading, and Writing
    7. Key Terms
    8. Summary of Learning Outcomes
    9. Chapter Review Questions
    10. Management Skills Application Exercises
    11. Managerial Decision Exercises
    12. Critical Thinking Case
  13. 12 Leadership
    1. Introduction
    2. 12.1 The Nature of Leadership
    3. 12.2 The Leadership Process
    4. 12.3 Leader Emergence
    5. 12.4 The Trait Approach to Leadership
    6. 12.5 Behavioral Approaches to Leadership
    7. 12.6 Situational (Contingency) Approaches to Leadership
    8. 12.7 Substitutes for and Neutralizers of Leadership
    9. 12.8 Transformational, Visionary, and Charismatic Leadership
    10. 12.9 Leadership Needs in the 21st Century
    11. Key Terms
    12. Summary of Learning Outcomes
    13. Chapter Review Questions
    14. Management Skills Application Exercises
    15. Managerial Decision Exercises
    16. Critical Thinking Case
  14. 13 Organizational Power and Politics
    1. Introduction
    2. 13.1 Power in Interpersonal Relations
    3. 13.2 Uses of Power
    4. 13.3 Political Behavior in Organizations
    5. 13.4 Limiting the Influence of Political Behavior
    6. Key Terms
    7. Summary of Learning Outcomes
    8. Chapter Review Questions
    9. Management Skills Application Exercises
    10. Managerial Decision Exercises
    11. Critical Thinking Case
  15. 14 Conflict and Negotiations
    1. Introduction
    2. 14.1 Conflict in Organizations: Basic Considerations
    3. 14.2 Causes of Conflict in Organizations
    4. 14.3 Resolving Conflict in Organizations
    5. 14.4 Negotiation Behavior
    6. Key Terms
    7. Summary of Learning Outcomes
    8. Chapter Review Questions
    9. Management Skills Application Exercises
    10. Managerial Decision Exercises
    11. Critical Thinking Case
  16. 15 External and Internal Organizational Environments and Corporate Culture
    1. Introduction
    2. 15.1 The Organization's External Environment
    3. 15.2 External Environments and Industries
    4. 15.3 Organizational Designs and Structures
    5. 15.4 The Internal Organization and External Environments
    6. 15.5 Corporate Cultures
    7. 15.6 Organizing for Change in the 21st Century
    8. Key Terms
    9. Summary of Learning Outcomes
    10. Chapter Review Questions
    11. Management Skills Application Exercises
    12. Managerial Decision Exercises
    13. Critical Thinking Case
  17. 16 Organizational Structure and Change
    1. Introduction
    2. 16.1 Organizational Structures and Design
    3. 16.2 Organizational Change
    4. 16.3 Managing Change
    5. Key Terms
    6. Summary of Learning Outcomes
    7. Chapter Review Questions
    8. Management Skills Application Exercises
    9. Managerial Decision Exercises
    10. Critical Thinking Case
  18. 17 Human Resource Management
    1. Introduction
    2. 17.1 An Introduction to Human Resource Management
    3. 17.2 Human Resource Management and Compliance
    4. 17.3 Performance Management
    5. 17.4 Influencing Employee Performance and Motivation
    6. 17.5 Building an Organization for the Future
    7. 17.6 Talent Development and Succession Planning
    8. Key Terms
    9. Summary of Learning Outcomes
    10. Chapter Review Questions
    11. Management Skills Application Exercises
    12. Managerial Decision Exercises
    13. Critical Thinking Case
  19. 18 Stress and Well Being
    1. Introduction
    2. 18.1 Problems of Work Adjustment
    3. 18.2 Organizational Influences on Stress
    4. 18.3 Buffering Effects of Work related Stress
    5. 18.4 Coping with Work related Stress
    6. Key Terms
    7. Summary of Learning Outcomes
    8. Chapter Review Questions
    9. Management Skills Application Exercises
    10. Critical Thinking Case
  20. 19 Entrepreneurship
    1. Introduction
    2. 19.1 Overview of Entrepreneurship
    3. 19.2 Characteristics of Successful Entrepreneurs
    4. 19.3 Business Model Canvas
    5. 19.4 New Venture Financing
    6. 19.5 Design Thinking
    7. 19.6 Optimal Support for Entrepreneurship
    8. Key Terms
    9. Summary of Learning Outcomes
    10. Chapter Review Questions
    11. Management Skills Application Exercises
    12. Managerial Decision Exercises
    13. Critical Thinking Case
  21. A | Scientific Method in Organizational Research
  22. B | Scoring Keys for Self-Assessment Exercises
  23. References
  24. Index

Wells Fargo, Crisis and Scandal

The recent widespread scandal at Wells Fargo jolted and shocked the corporate world. How could such internal corrupt and outrageously illegal and unethical activities by professionals have occurred? Wells Fargo is “an American multinational financial services company headquartered in San Francisco, California” with offices nationwide and “the world’s second-largest bank by market capitalization and the third largest bank in the U.S. by total assets.” In September 2016 it was discovered that the company was continuing to create fake customer accounts to show positive financial activity and gains. 5,000 salespeople had created 2 million fake customer accounts to meet high-pressure internal sales goals, including a monthly report called the “Motivator.”

The out-of-control sales leadership pressured sales employees to meet unrealistic, outrageous sales targets. Dramatically unrealistic sales goals propelled by continuous pressure from management coerced employees to open accounts for customers who didn't want or need them. “Some Wells Fargo bankers impersonated their customers and used false email addresses like noname@wellsfargo.com, according to a 2015 lawsuit filed by the city of Los Angeles.”

The “abusive sales practices claimed in a lawsuit that Wells Fargo employees probably created 3.5 million bogus accounts” starting in May 2002. Wells Fargo is awaiting final approval to settle that case for $142 million. However, regulators and investigations found that the misconduct was far more “pervasive and persistent” than had been realized. “The bank’s culture of misconduct extended well beyond the original revelations.” For example, regulators found that the company was (1) “overcharging small businesses for credit card transactions by using a ‘deceptive’ 63-page contract to confuse them.” (2) The company also charged at least 570,000 customers for auto insurance they did not need. (3)The firm admitted that it found 20,000 customers who could have defaulted on their car loans from these bogus actions; (4) The company also had created over 3.5 million fake accounts attributed to customers who had no knowledge of such accounts.

Wells Fargo has had to testify before Congress over these charges, which have amounted to $185 million dollars, and more recently the company has been ordered by regulators to return $3.4 million to brokerage customers who were defrauded. The CEO and management team have been fired and had millions of dollars withheld from their pay.

In the aftermath of the scandal, even though Wells Fargo executives were not imprisoned for the extensive consumer abuses committed by the company, the CFPB (Consumer Financial Protection Bureau) and Office of the Comptroller of the Currency (OCC) imposed a $1 billion fine on Wells Fargo for consumer-related abuses regarding auto loan and mortgage products. The OCC also forced the company to allow regulators the authority to enforce several actions to prevent future abuses, such as and including “imposing business restrictions and making changes to executive officers or members of the bank’s board of directors.” The new president of the company, Tim Sloan, stated, “What we’re trying to do, as we make change in the company and make improvements, is not just fix a problem, but build a better bank, transform the bank for the future.”

Critical Thinking Questions
  1. What happened at Wells Fargo with regard to past activities that led to this major scandal?
  2. What internal dimensions of the company were part of the problems that occurred?
  3. How might the organizational structure of the company have been part of the problems that occurred?
  4. . Identify and use relevant concepts from this chapter as well as your own thoughts and analysis to diagnose the scandal at Wells Fargo. How could such a scandal have occurred in the first place? Who and what was at fault?
  5. Suggest some solution paths the company might consider, using knowledge from this chapter and your own thoughts/research, to avoid such a scandal from reoccurring.

Sources: https://en.wikipedia.org/wiki/Wells_Fargo; Pasick, Adam, “Warren Buffett Explains the Wells Fargo Scandal,” Quartz, May 6, 2017. https://qz.com/977778/warren-buffett-explains-the-wells-fargo-scandal/https://qz.com/977778/warren-buffett-explains-the-wells-fargo-scandal/; Bloomberg, “The Wells Fargo Fake Accounts Scandal Just Got a Lot Worse,” Fortune, August 21, 2017. http://fortune.com/2017/08/31/wells-fargo-increases-fake-account-estimate/; Horowitz, Julia, “‘huge, huge, huge error’ in Wells Fargo Handling of Ethics Line Calls, CNN, May, 6, 2017. https://money.cnn.com/2017/05/06/investing/buffett-wells-fargo-berkshire-annual-meeting/index.html; http://money.cnn.com/2018/02/05/news/companies/wells-fargo-timeline/index.html; Wattles, Jackie, Grier, Ben, and Egan, Matt, “Wells Fargo’s 17 Month Nightmare,” CNN Business, February 5, 2018. https://money.cnn.com/2018/02/05/news/companies/wells-fargo-timeline/index.html. Hudson, Caroline, “Wells Fargo Stocks Still Struggling in Wake of Scandal,” Charlotte Business Journal, April 2, 2018. https://www.bizjournals.com/charlotte/news/2018/04/02/wells-fargo-stocks-still-struggling-in-wake-of.html

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