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...
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