Organization Culture at Goldman Sachs
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Case Details:
Case Code : HROB070
Case Length : 16 Pages
Period : 1999-05
Pub Date : 2005
Teaching Note : Available
Organization : Goldman Sachs
Industry : Investment Banking
Countries : USA
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Excerpts
Drivers of Culture
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The organization culture at GS was driven by its 14 business principles (Refer
Exhibit III). Of these, putting clients' interests topped the list. In the
1980s, GS adopted the practice of refusing to represent any company involved in
a hostile takeover bid. GS believed that the company being targeted might have
been its client in the past or had the potential to be one in the future. This
was the result of the legacy left by Goldman who stressed hard work and the
importance of absolute integrity. Walter Sachs, nephew of Goldman, remarking on
the ways in which Goldman conducted his business, said, "It was a small business
done in a small way - but with accuracy and exactitude."...
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Structure and Systems
As most of the GS partners had been in the organization right from the start
of their careers, they had worked as part of the same team at some point.
Thus, by the time they became partners, they were familiar with and trusted
each other.
The trust thus generated among the partners helped them to use
each other's resources - something that the structure of the organization
required. The organization plan at GS has been described as fluid with a
circle at the center representing a management committee, with the
operational divisions being around the circle (Refer Exhibit IV)...
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Elements of Culture
Long-term Customer Focus
GS believed in long-term customer focus. "We're focused on our
relationship being sustained over centuries, not for the next deal,"
said Rajiv A. Ghatalia, Managing Director, Investment Banking
Division, GS. GS served clients like Sears, Goodrich, and General
Foods for almost a century, 'nurtured by generations of bankers and
handed down almost like family heirlooms.' |
GS stood by its clients during difficult times. In 1987, GS
along with other members of a syndicate agreed to underwrite the sale of
state-owned British Petroleum. Following the stock market crash of October 1987,
the US stock market dipped by 22 percent in a single day, and GS was about to
face a loss of US$ 100 million on that deal.
While other underwriters reviewed their commitment by instructing their lawyers
to see if there was a legal method to reduce their exposure, GS stood by its
word, and influenced other member firms of the syndicate to stand by their word
too...
Excerpts
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