The above steps provide insight into the rational aspect of Freeman’s framework. Process and transactional aspects can only be determined through study of the specific Wells Fargo processes and transactions between stakeholders, and hence are not attempted in this paper. From the stakeholder map, the following key stakeholders can be identified: • Regulators (FDIC, FRB, OCC) As a bank holding company, Wells Fargo & Company is subject to regulation under the BHC Act and to inspection, examination and supervision by the Board of Governors of the Federal Reserve Board (FRB).
The company’s national subsidiary banks are subject to regulation and examination primarily by the Office of the Comptroller of Currency (OCC) and also by the Federal Deposit Insurance Corporation (FDIC) and the FRB. departments. The company’s brokerage subsidiaries are regulated by the Securities and Exchange Commission (SEC), the National Association of Securities Dealers, Inc. and state security regulators (Bak, et al, 2004). • Competitors The increasing level of consolidation in the financial services industry has led to increased rivalry of competition.
Competitors thus have a stake in the strategies for growth and expansion followed by Wells Fargo. • Customers Wells Fargo business and earnings are also affected by general business and economic conditions in the United States and abroad. These conditions include short-term and long-term interest rates, credit and liquidity risk, foreign exchange risk, equity price risk, commodity price risk, inflation, monetary supply, fluctuations in both debt and equity capital markets, and the strength of the U. S. economy and the local economies in which Wells Fargo operates.
For example, an economic downturn, an increase in unemployment, or other events that effect household and/or corporate incomes could decrease the demand for loan and non-loan products and services and increase the number of customers who fail to pay interest or principal on their loans (Bak, et al, 2004). Wells Fargo customers are affected directly by earnings and losses. A further dimension to its customer interaction arises in that Wells Fargo must retain the confidence of its customer base with regard to issues of integrity, ethical behavior, and corporate social responsibility (CSR).
This is particularly true as the bank operates across international boundaries, including online trading. As consumer choices and education increases, their demands and requirements could also increase, requiring the appropriate adjustments within Wells Fargo’s business processes and operations. 1. Risks and their Impact The following table shows risks have been identified (Bak, et al, 2004) as facing Wells Fargo, together with their impact on stakeholders: Risk Stakeholder Concerned Impact Details Fiscal and monetary policies of federal government and its agencies Federal Reserve Board
Customers Availability of bank loans and deposits and the rate of interest charged. Legislative & regulatory changes Government Degree of competitive rivalry becomes more intense. Technological advances enabling more companies to provide financial services, e. g. electronic “currency” such as e-gold Suppliers Competitors Customers The importance of depositary institutions may decrease as transfer of funds no longer requires such institutions. Online scams Suppliers Regulators Customers Cost of identity theft is estimated at over $60 billion over last 5 years.
Bibliography and References
• Elias, AA, Cavana, RY, 2000, Stakeholder Analysis for Systems Thinking and Modeling, Victoria University of Wellington, New Zealand. • Franko, LG, 2004, U. S. Competitiveness in the Global Financial Services Industry, Working Paper 1001, Financial Services Forum, University of Boston, Boston, Massachusetts. • Freeman, RE, 1984, Strategic Management: a Stakeholder Approach, Pitman, Boston, Massachusetts. • Bak, A, Harrington, W, Leach, K, Attanasio, P, 2004, SMIF Investment Research: Wells Fargo & Company, viewed 13 November, 2007, http://www. smifinvestment. com/wfc/index. asp