Write a -4-page academic paper in which you describe a business situation, apply a critical thinking framework to the situation, and recommend evidence-based solutions to the situation. Explain how the concepts of VUCA (volatility, uncertainty, complexity, and ambiguity) could affect both the situation and the solution

Introduction

The banking business is currently undergoing fundamental change. Since the financial crisis, a litany of new rules, regulations, and procedures have been imposed on the banking sector. These rules were primarily designed to mitigate risks associated with a financial collapse that could potentially plunge the economy back into another prolonged recession. These rules, ultimately placed heavy restrictions on banks as it relates to assets, loans, deposits, and risk taking. To alleviate these concerns banks looked to focus heavily on cross selling and other forms of additional revenue. The pioneer, as it relates to cross selling was Wells Fargo. During the period immediately after the financial crisis the bank trumpeted its cross-selling statistics to investors. Each quarter the bank improved the number of products each customer had with them. These products included personal lines of credit, savings accounts, loans, credit cards, and other products. The culture of cross selling was heavily engrained with the Wells Fargo ethos ultimately helping to heavily increase profitability after the financial restrictions of Basel III were placed on it. However, investors and society soon found out that the cross-selling culture was much more insidious than originally thought. Here, due primarily to a strong sales focus, unrealistic goals, and large pressures, Wells Fargo associates were opening fraudulent accounts. In addition, many personal bankers were guiding customers to products they did not need nor want in order to make sales goals. Management ignored the issue as they too were compensated based on sales performance and the cross-selling culture. This resulted in large scale fraud the permeated throughout the organization. The scandal quickly became worldwide news as Wells Fargo betrayed the trust of its customers. Not only that, the company profited from this fraud ultimately harming the integrity of the banking system and the capital markets overall. Since this scandal, Wells Fargo continues to faulter as it relates to its customer service scores (Corkery, 2016).

Problem

The primary problem is that many customers have lost trust in the Wells Fargo brand and its ability to be proper stewards of wealth. In addition, due to various fines, penalties, and regulations, the bank continues to rank very low in customer service relative to its peers. From a banking perspective, customer service within the overall branch environment is lacking. Many branches are now heavily understaffed. In addition, customers have experience large delays in being services as there is often only a few personal bankers within a given branch. Customer service over the phone is also inadequate relative to peers in the...…remove funds from the bank, transfer assets, or take their business elsewhere.

Complexity and Ambiguity are very high as it relates to Wells Fargo. As one of the worlds largest banks, the organization is very complex. Many managers will not be able to understand all of the complexity as many elements are reliant on unknown variable. Will customers pay their credit cards on time? Will there be another recession in the next year? Will our oil and gas loans get repaid in time? All of these questions have inherent risk and complexity within them. In addition, the answers are reliant on variables that are beyond the banks control. This ultimately makes customer service solutions very difficult to implement as heavy investment is required but the resulting profitability growth is very uncertain. Likewise, the information needed to make the decision is open to large amount of interpretation adding further complexity. With economic forecasting, customer data, and customer behaviors, two people with the same facts can arrive at different conclusions. As a result, it is important to have a conservative approach (Tayan, 2018).

Conclusion

To conclude, Wells Fargo has a branding and customer service issue. Thankfully it operates in an industry which is needed by society and therefore will not eliminated by large mistakes. To gain customer trust and loyalty the organization will need to take proactive steps towards changing its incentive structure, streamlining its operations, and training is associates…