June 8, 1998, the California Wells Fargo and Minneapolis banking company announced Norwest "merger of equals" in a stock transaction valued at $ 34 billion, and the one that created the most extensive and diversified financial services network of the Western Hemisphere. Wells-Norwest merged company will have $ 191 billion in assets, more than 90,000 employees, about 20 million subscribers, and the 5777 Financial Services "stores" (mortgages, consumer credit, or banking stores) in 50 states, Canada, Caribbean, Latin America and internationally. The new combined company, Wells Fargo & Co, would be the sixth largest bank in the U.S., and the largest supermarket chain and the industry's largest online bank of any U.S. bank. When merging, Paul Hazen, President and Chief Executive Officer of Wells Fargo at the time, became chairman of the new organization. Richard Kovacevich, chairman and CEO of Norwest, became president and chief executive officer of the new organization. Despite the enthusiasm of Kovacevic and Hazen merger, they had a number of potential barriers to overcome: First, Wells Fargo and Norwest were contrasting cultures - Norwest was known for customer service and high standard of sales, while Wells Fargo has been a leader in online banking and technologies, with a focus on efficiency. Second, in 1998, Wells Fargo was still in the process of overcoming the merger with First Interstate, which many considered a failure. Finally, many analysts see Wells-Norwest merger with caution. With such barriers, Kovacevic and his team wondered how they could overcome such problems through optimal integration strategy and effective execution of this plan. "Hide
by Jeffrey Pfeffer, Victoria Chan, Charles A. O'Reilly Source: Stanford Graduate School of Business 23 pages. Publication Date: October 11, 2004. Prod. #: HR26B-PDF-ENG
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