Goldman Sachs Essay Sample
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Goldman Sachs Essay Sample
1. Which forces in Goldman Sachs’s external environment have accounted most for “the fortunes of fate” that the company – indeed, the investment banking industry – has experienced since 2008?
The forces in Goldman Sachs’s external environment that accounts most for “the fortunes of fate” are the economic dimension, the sociocultural dimension and the regulators that are part of the task environment. For the economic dimension is when Goldman Sachs was in time of a global financial crisis, which made some of the investors at jittery and nervous and so they begin to sell off their shares until the company’s stock price fell in half. After they transitioned from an investment bank to a holding – company bank and the big external force were the regulators; like the Securities and Exchange Commission, and the sociocultural dimension. When they transitioned, they differed from their high-risk, high- return culture because at the time they needed to respond to the changes of customs and values in their society and their company, which is the reason why they became a holding-company bank. They adjust to what ever happens in their environment and is one of the reasons why Goldman Sachs’s has been able to survive for so long in the financial market.
2. Explain the roles of Goldman’s partners, both as owners and employees, in forming and managing its internal environment. As owners, Goldman’s partners helped the company form its internal environment by investing their own money and handling the company’s assets long term. As owners they also help by leading as example for their employees by at first showing their values in high-risk high reward and hard work and then recruiting employees with the same values. This will help shape the future of the corporate culture by recruiting the certain and specific employees. Their recruiting process is a very gruesome task but is a very big part of Goldman Sachs’s strategy to further shape the company’s internal environment. Goldman only hires the top of the top and very few job candidates in the industry out of tens of thousands. And then as an employee their roles are to be always hungry for success and want more. With this attitude, employees will constantly challenge and try to out perform one another because they will always want the promotion or raise that is up for grabs and to climb up the ranks.
3. Which models of organizational effectiveness are evident in Goldman’s approach to management?
The models of organizational effectiveness that are evident in Goldman Sachs’s approach to management are the system resource approach, the internal processes approach and the goal approach. The system resource approach focuses on the extent to which the organization can acquire the resources it needs and employees are in fact a resource that is limited and needed in an organization. In Goldman Sachs’s they primarily focus on this approach during the recruitment process. The internal process approach deals with the internal mechanisms of the organization and operations and focuses on the employee’s satisfaction/morale. This approach is evident in Goldman Sachs’s because they make sure to hire employees with those hard working values and have integrity in their work. Finally the goal approach is also evident in Goldman Sachs’s because they are careful on who they hire and the employees they hire are always hungry for more success and if employees always want more success they must achieve their goals.
4. In 2008, citing Goldman as one of the “Top 20 Most Admired Companies” in the United States, Fortune magazine characterized the firm’s culture as “an impossible-to-replicate mix of extreme aggression, deep paranoia, individual ambition, and robot-like teamwork.” Judging from our case, how valid do you regard this characterization? If you were a top manager at Goldman, how would you deal with the apparent conflict between “individual ambition” and “robot-like teamwork”?
The characterization given to Goldman is in fact valid in my regard because it is an accurate description of what the behaviors and culture is like. Extreme aggression, deep paranoia and individual ambition are the characteristics of the employee’s behaviors at Goldman’s. The employees are goal oriented and are motivated to do what ever it takes to achieve their goals and even competing with fellow employees is encouraged. The employee’s “deep paranoia’s” and “individual ambitions” are connected in a way. With an “individual’s ambition” comes with the paranoia of failure, which is usually why the employees at Goldman’s tend to be also characterized as perfectionists.
And finally “robot-like teamwork” I would assume is an accurate description because since the employees are self-centered with their own goals, they will not be motivated to work harder in a team so they will only do the minimum work required in that group, making it stale and very straight forward, robot-like. If I were a top manager at Goldman, the way I would deal with this problem would be to encourage more teamwork projects and reward employees not only for individual performance but how well they work with others. For example, if an individual is in line for promotion, a determinant to get it would be to see how well that individual works in a team and in the end if the others members of the team will speak well of the individual than the promotion will be given.
5. Find an op-ed piece by ex-GS director Greg Smith entitled, “Why I Am Leaving Goldman Sachs”. Presume that everything Smith writes is accurate and true. Comment on the strengths and weaknesses of the corporate culture at Goldman Sachs.
There are few strengths of the corporate culture remaining at Goldman Sachs but the strength’s that they do have are primarily profit centered. Employees will do whatever it takes to get a larger return from their customer’s. This is a great strength but is also a very toxic weakness because whatever it takes includes ripping customers off and deceiving them. Apparently the whole company is now like this because in order to climb up the ranks of Goldman Sachs’s, all you need to do is to bring in the big numbers. So now employee motivations will change and they will start to only focus on the numbers and not the customers. Integrity in the employees work will start to fade and will spread throughout the company and will be a threat to employee satisfaction/morale and in turn threat the company’s long-run survival.
6. Consider what you have learned in this class about leadership, power and motivation. Identify and discuss three possible ways, if you were appointed a leadership role at Goldman Sachs, to improve corporate culture.
To improve corporate culture as a leader in Goldman Sachs, I would first change the employee’s motivation from profits to the customer. I would do this by exercising my power, as a leader to stop rewarding employees for only their performance and start rewarding employees that genuinely believe what they are doing is best for their clients even if it doesn’t mean brining in the most money. To find these employees and weed out employees that do not match with this belief I would push more team projects to get to see who works well with others and who doesn’t, work and observe with some individual employee’s to see what their values and behaviors are, and gain customer feedback observe employee-client interactions and note which clients seem more satisfied than others.
Another possible way I would change corporate culture would be to try and increase employee satisfaction/morale by giving them more value and purpose in their work, so the company can gain more loyal employee’s whom will stay longer. With employee satisfaction and focus on the customer will give the employees back their integrity in their work and hopefully become prideful of the company they work for.
And finally the last possible way if all else fails would be to try to inspire the employees as a leader the values of customer satisfaction, and teamwork and persuade to them it is their best interest and to the company to share these same values. To use legitimate requests for employees to work together and to tend to clients actual needs. And reward employee’s that have best customer satisfaction along with good numbers.