...9-406-002 REV: MARCH 22, 2007 BORIS GROYSBERG SCOTT SNOOK Leadership Development at Goldman Sachs Our people have driven Goldman Sachs’ success for 130 years through sustained, superb execution across a range of markets and products. The best way to maintain that advantage is by recruiting, training and mentoring people as we always have—one at a time, with great care. We want Goldman Sachs to be a magnet for the very best people in the world—from new graduates to senior hires. At the same time, we are focusing on developing our very deep bench of talented people and improving and extending our skills. We are, for instance, placing young leaders in demanding positions that stretch their abilities. We are also devoting more time and attention to the formal training and development of leaders, particularly senior leaders. — Henry M. Paulson, “Letter to Shareholders,” Goldman Sachs, 1999 Annual Report Late on the evening of November 7, 1999, a small cadre of senior leaders huddled around a conference table on the 22nd floor of 85 Broad Street, deep in the heart of New York City’s financial district. The heady atmosphere and high-octane blend of intensity, anticipation, and quiet professionalism were not unusual for one of the world’s most storied investment banks. Tonight, however, eleven of Goldman Sachs’ finest were working not on a major acquisition or IPO, but on a revolutionary leadership development plan for the firm. In June 1999, Goldman’s Management...
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...| Leadership Development at Goldman Sachs | | Problem Statement How to develop an effective senior leadership development plan at Goldman Sachs to cultivate a culture that complements the existing team culture? | Process | EA Factor (Political, Economic, legal etc.) | Implications on the problem | PoliticalEuropean acquisition of US firms | * This put pressure on the American firms. * Created the “War For Talent” | Economic * Surge in the financial sector. * Many companies were going public. * There was an increase in the acquisitions in the financial services industry. * Lucrative overseas market. * IPO markets were growing, generating continuous revenues. | * Change in the financial sector, changed the way organisations functioned. * Opportunities and resources became global in scope. * Expansion forced institutions to expand their workforce. * The increased workforce called for more capable leaders throughout the organisation. * New industries and upcoming companies presented attractive opportunities for key employees from traditional companies like Goldman Sachs. This placed stress on the employee retention ability of these older companies. * Companies like Goldman Sachs hence had to look deeper into the adequacy of their training and development programmes. | SocialNot Relevant | | Technological * Dot Com Boom * Emergence of new media, telecommunication & technology industry. | Development of technology enabled the...
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...Ethical Dilemma: Goldman Sachs Was Goldman Sachs Socially Responsible? Pamela Bryant Northcentral University Abstract Illegal and unethical activity was prevalent in the Goldman Sachs administration and the charges filed against them by the SEC were inevitable. The underlying thought at Goldman Sachs amidst the allegations was a social purpose and a contribution to the economic cycle. While there were many gray areas of activity, this research will focus on the investment strategies used to control the clients financial investment gain and in most cases loss. Furthermore, this paper will outline the unethical behavior that was associated with the fraudulent transactions of Goldman Sachs as it related to the clients and public investors. Was Goldman Sachs Socially Responsible? The problem to be investigated is whether Goldman Sachs violated its own Code of Ethics in dealing with clients and public investors. According to the Preamble of the Business Code of Ethics, Goldman Sachs believes the highest standard of integrity should be included as the focal element in a business relationship. Regardless of how perceptive one might be in understanding the investment strategies of Goldman Sachs or even its relationship to the difficulties of the market, it is clear that not all activities were in accordance with the good old-fashioned law of principle and ethics. Background Goldman Sachs history has never been clear of controversy, dating back to its inception in...
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...Gray: The Goldman Sachs Standard Are there ethics in big business? Or does big business answer to a different power? This can be a rather gray area. The problem to be investigated is the Goldman Sachs Standard and the ethics (or lack thereof) that exist in the company. The original market strategy was to provide loans for small businesses and then sell these loans as commercial paper. (Jennings, 2012) In the 1920s, this became a tough market in which to make a profit. So, to borrow a phrase, when the going gets tough, the tough change strategies. In the late 1920s, Goldman changed its investment strategy to layered investments. This strategy involves creating a company and then personally purchasing a large amount of the shares. Goldman would generally purchase approximately 90 percent of these shares. The public, unaware of the original purchase, only saw a profitable company so they eagerly purchased not only the remaining initial shares, but also purchased shares sold by Goldman at a higher rate. Goldman would also purchase some of these to artificially inflate the market even further. This enabled Goldman to make money off of the secondary sales. Goldman was lying to its clients because the company it created was not truly as profitable as the inflated share price would indicate. It was fully aware of this and continued to layer additional companies into the strategy that would appear successful only as long as the market continued to grow. Goldman was lying...
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...‘Why I left Goldman Sachs’ by Greg Smith Précis by Pete Laburn Landing a job at Goldman Sachs Greg Smith is a pharmacist’s son from Johannesburg, South Africa, who won a scholarship to Stanford University in America. He grew up in Edenvale, as the eldest of three siblings in a Jewish middle class family, and earned a place among the 32 people, out of the 3000 international students, who applied for a full scholarship to Stanford. Three years later, in 2000, Greg was awarded a summer internship at Goldman Sachs. Of the intern class in any year, only 40% of students would be offered a full time job at Goldman Sachs after the summer. The internship programme was very strenuous and difficult, but showed that the firm took its culture seriously and taught all potential employees about giving clients good service. The internship programme gave students an opportunity to show their merit over a 10 week period as opposed to relying on a 30 minute interview. The firm stressed the importance of giving clients the correct information, not making things up or exaggerating, but being upfront and honest, even when you make a mistake. Teamwork was also highly valued at Goldman Sachs. From Goldman’s first days until 1999 (130 years) it had prided itself on serving as an adviser to its clients, with fiduciary responsibility. A fiduciary stood in a special position of trust and obligation where the client was concerned. This role was applicable when the firm was advising the client about...
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...Raising Capital 10 Goldman Sachs 2011 Annual Report For Prada, the time had come to capitalize on the power of a global brand In 2010, Prada, one of the world’s most recognizable fashion brands, knew it was time to go public, and that the place to do it was Hong Kong. The reason for choosing Hong Kong was simple: Asia, with its fast-growing economies, had become Prada’s biggest growth market. By 2010, Asia had rivaled Europe and had outpaced North America, accounting for 43 percent of Prada’s annual sales. With Goldman Sachs’ London investment banking team working with the family-owned company, Prada began preparing to go public in 2007. Postponed by the global financial crisis, the IPO was moving forward again in 2011, with Goldman Sachs as lead underwriter. As the IPO approached, work on the complex transaction stretched across continents and disciplines. While our London team worked with the company on capital markets strategy, our Hong Kong investment banking team took responsibility for deal execution. In marketing the offering worldwide, Goldman Sachs helped Prada present its story to more than 250 leading investors. The IPO raised $2.5 billion. It was the largest consumer goods IPO ever in Hong Kong, and the largest IPO to date of any global luxury brand. The offering enabled Prada to reduce its debt while funding future growth across China and the rest of Asia. By 2015, China alone is estimated to comprise 20 percent of the world’s luxury goods market. Prada...
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...Goldman Sach vs. SEC By: Lemar Clayton The Goldman Sachs situation presents a leadership ethics dilemma. Is it okay for banks to bet against their customers to manage risk and hedge their bets? In fact, I’m willing to bet that opposing sides in the argument don’t even see this as a dilemma. “The senate subcommittee grilled Goldman executives for 11 hours because they clearly think that what Goldman did was morally wrong, if not illegal.” ("Sec charges goldman," 2010) Contrast that with Goldman’s shareholders, who probably think it’s unethical for Goldman’s executives not to hedge against a mortgage collapse. There is a middle position that says the hedging itself wasn’t wrong, it was how Goldman did it that was questionable. Goldman should have disclosed its short position and possibly even details about the origins of those CDOs to customers. Let me begin by explaining what is a CDO, Goldman takes a reference portfolio, or a bunch of bonds. A bond is a formal contract to repay borrowed money with interest at fixed intervals. Each set of bonds is senior to all the bonds below it, and they pay principle in order of their seniority. You can view it as a pyramid with different slices. The portfolio is giving a rating by Wall Street. Each slice has a different maturity and risk associated with it. The higher the risk, the more the CDO pays. Level E will take losses before D, and level C will take losses before B. It’s important to note the bonds don’t have...
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...11/12/2009 MANAGEMENT 573 GOLDMAN SACHS CASE STUDY Brady Gear, Adam Heying, Maxwell Kagan, Kelly Schilling, & Joseph Quinn Wingerd Table of Contents Introduction .................................................................................................................................................. 4 History ........................................................................................................................................................... 4 The Nineteenth Century ............................................................................................................................ 4 The Twentieth Century .............................................................................................................................. 5 More Recent Times ................................................................................................................................... 6 Who’s Who List of Former Goldman Sachs Executives ................................................................................ 7 Business Segments ........................................................................................................................................ 9 Investment Banking ................................................................................................................................ 10 Financial Advisory ............................................................................................................
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...environment which is competitive and filled with changes. In order to improve the performance and success in this environment, organizations would need effective strategic leadership. It has also found that in the last few years, there have been explicit contributions from researches which help the managers to adapt today’s business environment by understanding and implementing the strategic leadership (Mary et al, 2008). This paper will discuss strategic leadership by introducing the definition of the strategic leadership as a start. The paper will then analyse what does the strategic leadership mean to the organizations and explain why organizations need strategic leadership in three angles: the change of business environment; the inadequacy of traditional management role for organizations; the importance of strategic leadership in terms of organizations’ strategy implementation. Furthermore, this paper will discuss three implications that the strategic leadership could bring to organizations from the perspectives of: stakeholder, business culture and globalization, respectively. The paper will also give examples for each implication to illustrate why organizations would be benefit from good strategic leadership from all the three perspectives. What is the strategic leadership? The strategic leadership, as defined by Ireland & Hitt (2005, p. 63) which has been popularly used in many academic papers, is “a person's ability to anticipate, envision, maintain flexibility...
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...Organization/Introduction: The organization that I chose to discuss for my final project paper is Goldman Sachs, the renowned American bulge bracket investment bank. In addition to bringing many companies public, Goldman is also a publicly traded financial institution headquartered in New-York city. The company’s main line of business is in helping corporations and government institutions raise capital, providing underwriting services and mergers and acquisitions advice. More specifically, Goldman Sachs specializes in investment banking, asset management, and trading and securities transaction services. Goldman has an employee head-count of approximately 35,700 people and operates mainly in the U.S, Asia and Europe. The company trades on the New-York Stock Exchange; using the ticker symbol GS. Similar and in some respects worse than other investment banks, Goldman Sachs profits fell in 2011; reportedly by as much as 58% in the final quarter when compared to the same period a year earlier. It is well documented that the financial services industry has been cutting jobs post 2008 financial meltdown. Just last year, Goldman Sachs slashed some 2,400 jobs while setting aside an approximate $367,000 in compensation per employee, down 15% from an average of $430,000 in 2010. One distressed employee referred to the reward/compensation cut as a ‘bloodbath’. From all reports it seems like the culture and morale at Goldman, the most profitable bank in Wall Street history, is at an all time low; particularly...
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...| A brief look at one of the 10 best investment banks- Goldman Sachs | | Submitted ToHumayan Kabir Course Teacher Merchant and Investment Banking Course code: FNB 308 Submitted ByShadman Sakib (Student ID: 1264) Md. Fahad Bhuiyan (Student ID: 1271) Edward Francis Gomes (Student ID: 1290) Md. Shariful Alam (Student ID:1287) Rezaul Karim (Student ID:1643) | Dhaka, BangladeshJune 23, 2012 | AssignmentDepartment of Finance & Banking Jahangirnagar University Savar, Dhaka | Introduction The Goldman Sachs Group, Inc. (Goldman Sachs) is global investment banking, securities and investment management firm that provides a range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals. Goldman Sachs reports activities in four segments: Investment Banking, Institutional Client Services, Investing & Lending and Investment Management. As of December 2011, it had offices in over 30 countries, including office in financial centers worldwide. Mission Goldman Sachs Group use Business Principles rather than a Mission Statement: 1. Our clients' interests always come first. Our experience shows that if we serve our clients well, our own success will follow. 2. Our assets are our people, capital and reputation. If any of these is ever diminished, the last is the most difficult to restore. We are dedicated to complying fully with the letter and spirit of the laws...
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...Global Economics Paper No: 192 Goldman Sachs Global Economics, Commodities and Strategy Research at https://360.gs.com The Long-Term Outlook for the BRICs and N-11 Post Crisis The BRIC and N-11 countries are emerging from the crisis better than the developed world. As a result, our long-term projections for the BRICs look more, rather than less, likely to be realised. It is now possible that China will become as big as the US by 2027, and the BRICs as big as the G7 by 2032. Within the BRICs and N-11, China, Brazil, India, Indonesia and the Philippines appear to be performing best. Bangladesh, Egypt, Korea, Nigeria, Turkey and Vietnam form a second group of countries that have performed broadly in line with expectations. Iran, Mexico, Pakistan and Russia have need for improvement. We show the ongoing dramatic BRIC influence in key product markets, with autos and crude oil as examples. Important disclosures appear at the back of this document Thanks to Dominic Wilson, Michael Buchanan, Paulo Leme and Swarnali Ahmed for their valuable comments, and to Alex Kelston for the Growth Environment Scores Jim O’Neill and Anna Stupnytska December 4, 2009 Goldman Sachs Global Economics, Commodities and Strategy Research Global Economics Paper Contents Summary Section 1. Where We Stand on the BRICs and N-11 Section 2. The BRICs and N-11 in the Aftermath of the Crisis 2.1 BRICs and N-11 Global Importance Continues to Rise 3 4 6 6 Higher growth contribution...
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...Goldman Sachs Motivational Profile In 1869, a German immigrant Marcus Goldman formed Goldman Sachs & Company. Over the last century, Goldman Sachs has been an innovator in developing the many aspects of the nation’s current financial system. In 1906 Goldman Sachs managed its first IPO. They were gaining the confidence of companies across the country. As with most financial firms, the depression era was tough. With financial confidence at its lowest point, the government created the Securities Exchange Commission. With the new guidelines set forth, Goldman Sacks provided more information with investment recommendations aiding in their slow but upward recovery. Goldman Sachs continued to grow and expand through the years. After World War II, the economy was booming and Goldman found growth by marketing stock in companies like Ford Motor Company and Alcan Aluminum. Goldman Sachs once again encountered turbulent waters in he 70’s because of Penn Central Railroad. This was a disaster for Goldman Sachs creating lawsuits and credit ratings to drop. Since that time, Goldman Sachs rebounded and expanded to an international market. With this global market, Goldman Sachs became the most profitable company in the world by expanding yet further into Russia and China. Sachs continued to be successful until the subprime mortgage crisis in 2007. They profited by short selling mortgage related securities. By 2008 Berkshire Hathaway had purchase five billion dollars in Goldman’s preferred stock...
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...problem to be investigated is looking into shades of gray when it comes to ethical behavior. For years, companies have been operating within the law yet displayed very questionable behavior. Companies like Goldman and Sachs utilizing questionable trading techniques in order to gain a financial profit while leaving behind companies in the dust and eliminating hundreds if not thousands of jobs in the process. Ethics is more than doing what’s right or wrong. It’s a way of life and how we can have an effect on others. Question 1: Go back through the case and make a list of each action or practice that could be called a gray area. The Layering Strategy: This was formulated in the late 1920 as a way to utilize one company’s money to invest in another. In the case of Goldman, he used his own customers to make money. He created an investment company and buys 90% of the shares in that company with its own money. Because the shares have sold so well, the public wants a piece of the company. So, the shares that Goldman initially bought for, say, $100, it is able to turn around and sell to the public for $110. He would then continue the cycle with another company and the price would climb. The Laddering Strategy: In 1990, the birth of the Internet age just started its peak. Goldman found another way to capitalize on this boom. Much like Goldman’s layering strategy, the Laddering strategies end result is also a crash. With the laddering strategy, this was reserved for Goldman’s best...
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...mentor, an analyst at Goldman Sachs, motivated me to pursue a career in investment banking. Interning at Ideal Properties Group has allowed me to become a more effective researcher and analyst. I learned how to assess market conditions and news updates to provide real estate agents with better insight into current and potential properties. I researched property data and records and communicated findings with agents. Due to my research and work ethic, an agent wanted me to co-partner with her. Furthermore, upon improving my research skillset, I then advanced with another internship as the promotion manager. I was able to develop the skill of a consultant by consulting business owners on sales and investment strategies through City College's Athletic Department publication for advertising. When I served as the President of the Disciples on Campus at the City College of New York, I had the privilege to manage, train and give vision to the members of the club. I would lead weekly discussions to inspire other students to not only pursue academic knowledge, but also invest in wisdom that would help them grow in integrity. As a member this year, I am trusted to manage and oversee the club’s finances and budgeting. I am currently training the new president, the new secretary and the new treasury for their upcoming roles in the club. As a freshman in college, my soccer coach recognized my leadership abilities. Being part of his team has helped me polish my leadership skills both in the...
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