Collins, Business Ethics 3e
SAGE Publishing, 2021
Test Bank
CASE STUDY 10: THE WELLS FARGO SCANDAL: A TALE OF A TOXIC CORPORATE
CULTURE
Multiple Choice
1. Wells Fargo employees took what action to meet their sales targets?
a. created additional credit card and bank accounts
b. signed up customer’s family members
c. falsified sales reports
d. worked overtime and weekends
2. The 2007–2008 financial crisis produced financial protection legislation such as
Dodd-Frank and the ______.
a. Regulatory Response Act
b. Financial Services Act
c. Glass-Steagall Act
d. Consumer Protection Act
3. What federal agency was created to address misconduct by financial firms?
a. Securities and Exchange Commission
b. Department of the Treasury
c. Federal Trade Commission
d. Consumer Financial Protection Bureau
Collins, Business Ethics 3e
SAGE Publishing, 2021
4. As early as 2002, reports about Wells Fargo were filed alleging ______.
a. absence of account oversight
b. lack of compliance with regulations
c. retaliation against employees
d. violation of the public trust
5. Why were fraud accounts created?
a. launder money
b. meet sales targets
c. enrich employees
d. hide other unethical behaviors
6. Account holders were unaware that accounts were opened in their names but were
still responsible for ______.
a. depositing funds
b. changes of address
c. maintaining account activity
d. account fees
7. Wells Fargo opened more than half a million ______ accounts without mentioning it
to customers.
a. mortgage
b. credit card
Collins, Business Ethics 3e
SAGE Publishing, 2021
c. car loan
d. mutual fund
8. Wells Fargo claimed to have what kind of work culture?
a. culture of caring
b. competition culture
c. holistic wellness culture
d. culture of results
9. Within Wells Fargo’s work culture, employees were challenged to do what?
a. improve customer satisfaction scores
b. meet unrealistic sales goals
c. promote ethical workplace culture
d. comply with all federal regulations
10. What was communicated as the main goal of corporate values at Wells Fargo?
a. customer service
b. public good
c. profit
d. conscientiousness
Collins, Business Ethics 3e
SAGE Publishing, 2021
11. One of the factors contributing to employee silence was ______.
a. fear of retaliation
b. lack of reportable events
c. agreement with practices
d. no avenues for reporting
12. The company’s ______ created a hypercompetitive environment for employees.
a. financial demands
b. customer base
c. performance review system
d. incentive structure
13. Employees who engaged in fraud were not seeking personal gain but ______.
a. meeting public demand
b. agreeing with shareholder demands
c. trying to do what was best for the company
d. complied with a culture that sanctioned fraud
14. Employees were trained to be focused on ______ and not on customer needs.
a. legal requirements
b. industry standards
c. customer desires
Collins, Business Ethics 3e
SAGE Publishing, 2021
d. sales goals
15. Wells Fargo did not have a system to ______ new account creation.
a. register
b. establish
c. verify
d. report
16. One of the reasons regulators didn’t catch this fraud scheme was that they were
______.
a. clouded by the company’s reputation
b. not looking for this particular kind of fraud
c. significantly smaller than the industry they monitor
d. satisfied with Wells Fargo’s performance
17. A ______ lawsuit is when a group of people harmed in the same way pursue a case
as representatives of the whole group.
a. class action
b. civil
c. criminal
d. defamation
Collins, Business Ethics 3e
SAGE Publishing, 2021
18. A former Wells Fargo CEO stepped down due to ______ in light of the scandal.
a. industry best practices
b. external pressures
c. security concerns
d. customer satisfaction
19. Wells Fargo took what action in light of the scandal?
a. created a code of ethics
b. complied with federal mandates
c. rehired all whistleblowers
d. eliminated sales goals
20. As of 2018, employees at Wells Fargo claimed that they still lacked the ability to
______.
a. request overtime
b. speak out without retaliation
c. verify new accounts
d. report unethical behaviors
Collins, Business Ethics 3e
SAGE Publishing, 2021
True/False
1. Customers were made aware that their information had been used to create new
accounts.
2. Employees enjoyed the competitive atmosphere and emphasis on sales.
3. One of the factors that led to bankers engaging in fraud was that they were required
to meet unrealistic sales goals.
4. Managers refused to listen to employee complaints which led to a failure to act.
5. Wells Fargo paid fines related to their participation in the subprime mortgage crisis
but not those related to earlier instances of fraud.
Collins, Business Ethics 3e
SAGE Publishing, 2021
Essay
1. Why were employees encouraged to open fraudulent accounts?
2. How did the corporate culture at Wells Fargo create a toxic environment?
3. Which fail-safes were not able to identify the fraud?
4. If you were CEO, what would you have done differently to avoid the scandal?
Collins, Business Ethics 3e
SAGE Publishing, 2021
5. If you were a new CEO taking control of Wells Fargo after the scandal, what actions
would you take to restore trust?