Wells Fargo is one of the oldest American multinational financial companies that is founded in 1852. The company offers a variate of financial products that include banking, investment and mortgage. Serving one in three households of the United States, Wells Fargo provides support for customers who conduct business in the context of global economy (Wells Fargo). This essay examines the effects of stakeholders and external environment on the company’s performance and discusses its respond to a recent social issue.
Primary stakeholders that are customers and employees have a direct interest in the organization, as typically they may maintain their needs through the profit from the business structure. They may influence the company’s financial performance in either positive or negative ways. For example, customers can apply their buying power to influence leaders of the company to make ethical decisions. Concerning about the ecological or social issues may not be profitable but if customers stop purchasing the products of the company, there can be even more losses.
Another case of the influence of primary stakeholders is that employees may use their working power to ask for more wages. An increase in salaries depends on financial performance of the company. If employees start to perform productively, they can ask for increased wages. By doing this, the company’s financial performance also changes, as they now have higher profitability. Moreover, in case of dissatisfaction, employers may raise awareness about how the company treats its people by using social media platforms, mass media and through protesting (Lawrence, 2020). This is unfavorable for the company and may bring up severe financial consequences to the organization. Wells Fargo did not have such events; however, it still needs to be aware of satisfying and meeting the needs of its stakeholders.
Investors are also stakeholders of the organization who have a great impact on its success. The company depends on how much investors invest and how many investors are there. Moreover, investors influence decision-making process of the leaders, forcing them to behave on the behalf of investors’ interests (Lawrenes, 2020). Therefore, the company can experience difficulties in making decisions and changing plans. This can impact success of the organization in both negative and positive ways. As such, cooperation between the leaders and investors is necessary condition to demonstrate good financial performance.
Along with the impact of stakeholder, the company’s external environment is also crucial. Two critical external factors that are technological and sociocultural forces influencing Wells Fargo’s performance. Technological forces that include information technology and the Internet maintains almost all operations of the company. Online banking allows customers to access Wells Fargo’s services and products from all over the world without any necessity in physical presence or documents. Being technologically advanced increases customers’ satisfaction, making them choose the company over other competitors in the market.
However, Wells Fargo may be attacked by hackers due to its financial services. As such, the company spends more of its budget to prevent its cyber security (Wells Fargo). Therefore, technological forces can have both positive and negative impact on the company’s success.
Sociocultural factors that are customers’ lifestyle, current social issues, customers’ needs, and other factors also influences the company. Due to the pandemic, people concern more about their financial well-being and start to rely on companies such as Wells Fargo. Moreover, the fact paced world now supports online services more than offline ones, as they are affordable and not time-consuming (Morgan, 2021).
Additionally, parents of the new generation rely more on financial companies when deciding the future of their children. This current trend helps to increase popularity of the company’s products and services, bringing more profit. On the other hand, sociocultural factors can negatively affect the organization’s financial performance. For example, recent trends of minimalism and anti-consumerism among young people can reduce the company’s profitability in the nearest future.
As a response to the recent rise of minorities, Wells Fargo is actively promoting diversity and inclusion in its workplace. Well Fargo’s CEO, Charlie Scharf commented on George Floyd’s case with the main focus on support of its diverse communities (Son, 2020). Responding to this social issue provided the company new opportunities, as it obtained public support. The company ensures that all people across its workforce, communities, and supply chain are valued, having equal access to the commodities, services and opportunities to succeed (Wells Fargo).
Wells Fargo attempts to have candidates with different background at positions of all levels, including leadership positions. It also promotes diversity and inclusion awareness by providing trainings and seminars for its stakeholders.
Making decisions in accordance with recent social issue of minorities influences the company in a positive way. Wells Fargo opens new markets and expands its target due to their response to the social issue. Moreover, the company’s comments on the events of summer 2020 demonstrates its values and position towards the society. Such response attracts new customers and helps to create the image of the company. Additionally, partners and investors can benefit from working with Wells Fargo because of its brand; thus, making the company more competitive.
References
Lawrence, A. (2020). Business and Society: Stakeholders, Ethics, Public Policy. 16th ed. McGraw-Hill Irwin.
Morgan, B. (2021). More Customers Are Shopping Online Now Than At Height Of Pandemic, Fueling Need For Digital Transformation. Forbes. Web.
Son, H. (2020). ’Appalled’— Here’s what Wall Street CEOs are saying about the killing of George Floyd and protests rocking US cities. CNBC. Web.
Wells Fargo – Building better every day. (n.d.). Wells Fargo Bank. Web.