Overview of Goldman Sachs and its performance in the UK and US

1. Goldman Sachs in the United Kingdom was managed by focusing on the values of employee participation, job satisfaction and personal growth in their leadership style. The management was also able to maintain their focus on the needs of the customers and stakeholders apart from the goals associated with the growth of the organization. According to Withers (2018), Goldman Sachs have performed well in United Kingdom, becoming one of the highest rated recruiters in United Kingdom by constantly creating new jobs and due to better employee satisfaction (recruiter.co.uk 2018). According to LinkedIn Goldman Sachs is among the 25 most attractive employers, showing better commitment towards the welfare of the employees, developing programs that can support pregnant employees through their pregnancy term and also have plans to incorporate diversity in its workplace (Connely 2018). Through a combination of democratic and charismatic leadership, Goldman Sachs was able to maintain a high level of employee satisfaction as well as employee participation. Most of the employees showed deep sense of belonging and fraternity with the company and a sense of pride to be a part of this organization. The sense of satisfaction and pride existed from the top down to the bottom of the organization, and every employee felt of giving something back to the organization for helping them attain personal and professional growth. This sense of indebtedness and loyalty towards the growth of the organization is significantly influenced by how the management has developed a positive culture within the organization that is based on trust, mutual respect, integrity, accountability and a sense of responsibility towards the organization and its stakeholders which were the cornerstones of the organization (Adams 2010). Through these values, the employees not only were able to show respect and responsibility towards each others, but also towards the best interest of the stakeholders and customers, thereby helping to foster customer loyalty and brand image in the market. Such approaches can also be considered as sustainable management strategies as it can help in the long term growth of the organization. Most importantly the leaders of Goldman Sachs UK were able to inspire the employees to give their best effort and led everyone though their own examples which others could follow, living by the company’s values and on sound moral principles and listening to the employees needs and expectations (Connely 2018; Sullivan 2018).

In the United States, Goldman Sachs followed a slightly different trajectory of leadership that paid more focus to the development of the business and addressing the objectives related to organizational development and profits. The agendas allowed Goldman Sachs to become ‘peerless’ and experience immense growth and profits, but at the same time took the focus away from the best interests of the customers. The leadership also resulted in the needs and expectations of the employees and the company’s obligations to them to be completely overlooked (Bidwell et al. 2015). The management was also unable to address the expectations of the customers, as a result of which the organization mainly worked towards its own interests and towards the detriment of the interests of the customers. The leadership also was unable to maintain an ethical code of practice for the employees, due to which the organization also were indulged in several unethical behavior that eroded the trust and image of the company in the market. This resulted in a severe cultural problem within the company, in which the employees did not adequately focus towards the satisfaction of the employees, often causing their interests being exploited to promote the growth of the business (Culpepper and Reinke 2014). The investors of the bank was also misled some occasions such as masking the debts of Greece and also playing a key role in the American Banking Crash in 2009 (Goldstein et al. 2018). According to some journalists, the leadership style used by Blankfein in the Goldman Sachs United States was that of ‘founder centralism’ which mainly focused on the best interests of the founder of the company and ethically disposes the management from the responsibility towards the stakeholders, thus allowing the management to make decisions that might not be in their best interests. Such autocratic leadership though helped in the development of the company as well as providing better remunerations to the employees, it completely ignored the customer’s needs (Withers 2018). As a result of such exploitative behaviors, the operations of Goldman Scachs in United States was stated to be using a management strategy that allowed the company to act like a “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money” (Taibbi 2010). Other reports accused the company of excess workoholism, arrogance and extreme sanctimoniousness, which prevented the management to see through their own errors and continue their management approach with a sense of righteousness (Adams 2010; Sullivan 2018).

Leadership, Values and Culture in Goldman Sachs UK

2. In order to direct the company on the right path and foster the development of trust of company by stakeholders and investors, it was vital that the organization utilized a more democratic leadership style than an autocratic one, and also imply a transformational leadership to increase a sense of accountability and responsibility towards the best interests of the stakeholders and investors in the organization (Pilbeam et al., 2016). According to authors, it is important that the leadership in a large organization such as Goldman Sachs shows a vision that includes not only the focus on the development of the company and employees but also the development of the stakeholders and investors (Jacobsen and Bøgh Andersen 2015; Pilbeam et al., 2016). The leadership from Goldman Sachs operations in both United States and United Kingdom also should show more affiliations with each other, showing a shared objectives and goals and also sharing best practices that can help to achieve the organizational objectives (Withers 2018; Sullivan 2018). This also can help to ensure better cooperation with the employees and help them to work towards a common goal. It is also important that the leadership incorporates a sense of respect towards the stakeholders and investors, professional integrity and accountability, humility, courage, clarity and service centricity in order to develop more trust to the organization (Ross et al. 2014). Through professional integrity, the company can help to maintain ethical and moral code of conduct and avoid its policies to be detrimental to the interests of the stakeholders such as the customers or the investors. Through humility, the organization can avoid becoming arrogance of being the top companies in the country and maintain focus towards the responsibility of the company towards its stakeholders. Courage and clarity are important since it can ensure the company maintains a clear and transparent practice which can be easily audited and free of any ambiguity (Mishra 2018). Centricity to the service is vital to ensure the company adheres to best practice guidelines that helped the development of a positive work culture of inclusiveness, job satisfaction and customer satisfaction. A right type of leader for Goldman Sachs in United States therefore could be someone who was able to implement all these values in the organizational culture, leading the people by their own examples and guiding the employees to develop such values in their own work (Aarons et al. 2016).

The leadership style used by Lloyd Blankflein in Goldman Sachs United States was that of a ‘founder centric’ style (Moore 2018). This strategy mainly revolves around the best interests of the founders or the top level management, incorporating an autocratic style of leadership in the decision making process (Mayer 2017). Blankflein was mainly interested in the development of the company and the employees. The management style was able to develop a significant amount of loyalty of the employees, as the employees took significant pride to be a part of one of the best organizations in the United States. Additionally, Blankflein also was able to develop a workaholic environment as well as the confidence of the employees and helped them to achieve personal and professional development which played a significant part to make Goldman Sachs as one of the best employers (Zhao 2016). However, on the flipside, Blankflein’s leadership was not based upon strong moral values and it allowed organization of divert from the objectives of maintaining the best interest of the stakeholders which was seen in the Goldman Sachs United Kingdom Leadership. Due to this, the company was involved in several unethical activities which eroded the trust of the company among the stakeholders (Afr.com 2018). Since Blankflein was mainly focused on the growth of the company, the business was able to capitalize and exploit the needs of the customers, thereby helping to develop a negative image of the company. Thus, even if the company was significantly successful, making large profits, it faced several acquisitions of being involved in unethical practices such as misdirecting the investors and exploiting the employees (Jack 2018). The company was also accused of playing an important role in the American Banking Crash in 2009 by misdirecting the investors and customers, creating false and unsustainable demands for housing and mortgage terms. Thus, the leadership style followed by Blankflein was not the most appropriate one, since it resulted in the erosion of trust and gained the company a negative image which adversely impacted the future growth of the company (Tavakoli 2010). Even though the leadership style helped to achieve short term success and profits, the company still suffered long term losses caused due to the negative publicity the company got and also by paying different fines for its unethical activities (Moore 2018). Therefore it can be said that the leadership style used by Blankflein in United States was not the right one.

Leadership, Values and Culture in Goldman Sachs US

3. Employee engagement can be understood as the extent to which the employees feel connected to the organization where they work, the passion and commitment they show towards the job and how they utilize their discretionary effort towards the organization and it reflects upon the relationship between the employee and the employer. According to Albrecht et al. (2015), employee engagement influences the climate of the organization as well as job satisfaction and is defined by a situation in which the employees are completely absorbed in their work and show proactive decisiveness towards the growth of the company and improve the reputation of the brand as well as show a positive attitude towards the organizational objectives. According to many authors, high level of employee engagement can have both advantageous as well as disadvantageous impacts on the company. Discussed below are the key advantages and disadvantages.

The main advantages of high levels of employee engagement have been discussed by Isusi et al. (2017); Eldor and Harpaz (2016) and Breevaart et al. (2014). According to Isusi et al. (2017) better employee engagement helps to foster better job satisfaction by the employees, improve the levels of enthusiasm to participate in various organizational activities as well as increase participation in important decision making processes. According to Byrne et al. (2016), better engagement in the work helps to develop a sense of belonging and job satisfaction which develops because of a sense of connection to the company as a result of which the employees are more likely to work better. Also, because of better job satisfaction and engagement, the companies can help to ensure better employee retention and lower employee turnover ratio. Studies have shown that a work culture that is based employee satisfaction have better retention rates for the employees compared to companies that did not focus on employee satisfaction and engagement (Terera and Ngirande 2014). This has also been supported by the 2017 Gallup Report that shows a positive correlation between job satisfaction and employee participation with employee retention and turnover rates (news.gallup.com 2017). Studies by Anitha (2014) further shows that better employee engagement can also help to improve the productivity of the employee by fostering a sense of seriousness, responsibility and accountability to work due to which the employees can take more proactive steps and actions that helps in organizational growth and performance. Through the improvement of employee performance and productivity, better retention of skilled employees and improved employee satisfaction, improving employee engagement can also help to increase the profitability of the company. Studies have also shown that these factors can further help in the reduction of absenteeism within the organization as most employees would be engaged with their work more wholeheartedly, avoiding any unnecessary leaves (Isusi et al. 2017). Moreover, engagement of employees in a meaningful manner can improve the loyalty to the company which supports better retention of the employees (Breevaart et al. 2014).

Even though employee engagement has been considered to be advantageous to the company by several authors, some authors have also warned against too much employee engagement, stating that it can have detrimental impact on the organization. According to Schulz and Enslin (2014), increased employee engagement can cause an increase in the expenses of the company in order to provide training to all employees to engage in additional tasks. Hart (2016) also pointed out that too much engagement of the employees can also result in the top policies of the company to be revealed to the employees which can then fall into the hands of the competitors. Also, engaging too many people in a decision making process can increase the confusion and chaos due to the inclusion of too many points of view. According to Shuck (2017), one of the biggest challenges faced by the management towards the inclusion and engagement of the employee in all the decisions of the business is to make the employee understand the significance of the decision and how that can impact the employees as well as the organization, due to which the employees can often make uninformed decisions which can impact the long term viability of the decision or the activities being engaged in. Lambert and Quintana (2015) pointed out that one disadvantage of employee engagement is that it can be inhibited due to online representations of the employee resources, which are a common strategy used by many businesses now a days. Moreover, engaging all employees can also pose a communication challenge to the employers as it would require communicating with employees from diverse roles, responsibilities, backgrounds and regions. Keeping all the employees well informed therefore can be a challenge for the companies. Studies by Sievert and Scholz (2017) also supports that when are employees show more engagement with the company, the cons of the company becomes more evident to them and can paint a negative picture of the company due to a transparency of its business protocols, which can result in the erosion of trust on the company (Breevaart et al. 2014).

The ‘Right’ Type of Leader for Goldman Sachs

4. Senior leaders have an important role in the shaping of the organizational culture. According to Rijal (2016), transformational leadership strategy can help the leadership of a company to bring about positive changes in the organization and develop the work culture and environment in a way that can support the organizational values and objectives and help the organizational to adapt to the changing organizational needs. Longman et al. (2018) suggested that both organizational culture as well as leadership is important for an organization. The authors proposed that through effective leadership a positive change can be brought about in the organization which can ‘pull’ the employees to be engaged in various activities that can cause development and growth of the organization and an improvement of organizational performance (Henriksen and Børgesen 2016). Good leaders can inspire others to give their best effort for the organization and adhere to the best codes of conduct, helping them to see the bigger picture and orienting them towards the organizational values and codes (Richardson et al. 2015).

Several authors have proposed that effective leadership is one of the most crucial aspects that determine the success of an organization and the culture within the organization. According to Sendjaya (2016) a leadership style that focuses on providing service for the employees and stakeholders (called ‘servant leadership) can help to develop both personal and organizational excellence, and thus help in the growth of the employees as well, improving their employability as well as socioeconomic status. Studies by Burch et al. (2015); Ng et al. (2015); Kok and McDonald (2017) and Shao et al. (2016) shows that through effective leadership it is possible to inculcate within an organization a culture that values integrity, commitment, creativity, communication, enthusiasm, self confidence, openness/transparency, understanding, respect and adaptability within the organization. Moreover, through leadership, the organization can also improve openness or readiness towards change and help to motivate the employees towards common objectives. Gupta et al. (2018) also pointed out that through a strong leadership style, organization can help to promote better engagement of the employees thereby helping to improve job satisfaction, employee loyalty, employee retention and organizational performance and productivity. Additionally, a strong leadership that is based upon strong moral and ethical values and principles can help to ensure that an organizational culture follows strong moral and ethical standards respect the organizational values, aims and objectives (Letwin et al. 2016).

Studies by Hartnell et al. (2016) shows that through effective leadership and supporting a positive organizational culture, a positive impact can be made on the performance of the firm which can be explained through social identify theory and attributed theory. According to the authors, a leadership strategy that focuses on inclusiveness and engagement of the employees helps in the development of social identity which supports better productivity of the organization as each employee show more motivation to contribute to the growth of the organization and business. Similarly Alimuddin and Sukoco (2017) also suggested that the work behavior of the employee can influenced by leadership style, pointing out that effective strategies of rewarding and recognition of the employee efforts served to encourage the employee to give their best performance in an organization in the hope of receiving the recognition or rewards. The authors also pointed out that a ‘participative leadership’ was essential in the development of a positive and productive work culture which supports better work behavior in the organization. It has also been pointed out by Alimudin et al. (2017) that through better leadership, loyalty of the employees can also be improved, as it helps to impress upon the fact that the organization considers the employees as their assets and is willing to retain them and their skills in the workforce (Wang et al. 2014; Feser et al. 2015). All these aspects clearly demonstrate that by effective leadership, an organization can maintain an organizational culture that is positive, and promotes the growth of the business as well as the internal and external stakeholders.

Pros and Cons of High Employee Engagement

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