Strategic International Business Management

The differences in leadership value and culture between Goldman Sachs UK and

Leadership is highly associated with the success of an organisation. In simple terms, leadership refers to the willingness and ability to take ownership of an organisation or a part of the organisation that has been charged with managing, and the intrinsic drive what is in the best interest of the organisation (Thorpe, 2016). Based on this definition, to contribute to the excellence of an organisation, leadership is attributed to various skills and leaders must exhibit these skills to enable the organisation to achieve its goals. Some of these vital skills are team-building skills, communication, courage, empathy, emotional intelligence, and strategic thinking. To fully attain these skills and many others, they must be cultivated into the organisation's culture and values. Since leadership has a role in the excellence of an organisation, the leadership differences in the UK Goldman and the US is a significant cause for the differences in the leadership rankings in both 2007 and 2010. For those seeking UK dissertation help, understanding these leadership dynamics is crucial for academic and practical insights.

As elaborated in the case study, the leadership of Goldman UK demonstrates ethical principles, is visionary, and lives true to the company’s values. By demonstrating the implications of these skills, it is possible to show how it affected the company with regard to being considered the best company to work for. First, while for most companies the code of ethics is clear and pinned on the wall for all to follow, great leaders do more than follow up to see that the codes are being followed (Conway, et al., 2016). Great leaders walk the walk by acting in accordance with the codes. So what is the implication of this and how would have affected the staff from Goldman UK?

One, when the leaders walk the walk, they encourage others to also be ethical. Therefore, when the employees in Goldman claim that their leaders live true to the values of the company, it means that by seeing the leaders act in accordance with the values, then they are inspired to do that too. Leaders are influential irrespective of the leadership styles that they employ and what matters most is the ethical influence that they have on their follows. There are things that a leader observing ethics will do that those not doing it will not (Thorpe, 2016). Some of this include; observing the rights of all the parties involved, and ensure that all decisions are made and executed in an ethical manner. Also, by acting ethically, leaders ensure that all the stakeholders and followers are accountable.

An ethical teamwork is another attribute of leaders who walk the walk. To Goldman UK this is an attributed that is well exhibited by the leaders in the senior management team. By exhibiting ethical teamwork, the staff gets inspired from seeing the management team acting as a team and ethical. From this, they learn that the team's success is more important over the success of an individual. By identifying that the essence of a team, staff of Goldman UK mould their teamwork attitudes and talents thus maximising productivity. With the inspiration from the leadership of Goldman UK, it is possible to say that the employees are motivated and happy and thus the positive review as the best company to work for.

The above analyses about the leadership of Goldman UK help evaluate its differences with that of Goldman US. As noted in the case study, Goldman has been charged with misleading the investors in the US. This has been termed as unethical and this is the main difference between the two leaderships. It has also been highlighted that the employees and the customers have reported enormous dissatisfaction with the company. Another difference is that while in the UK the government engages the employees into fulfilling the interest of the customers, in the US, the leadership is absorbed into fulfilling the interests of the bank which is mainly to earn more money. This has been reflected in the bank’s involvement in American baking crash of 2008 and its unethical action in its involvement in Greece masking its indebts.

The failure to make ethical behaviour the core of integrity in the bank's daily undertakings, the leadership of Goldman US risks attaining the company's goals and vision and as a result, fails to satisfy the needs of the employees and consequently that of the clients. Worse even is that sue to unethical undertakings, the bank has been involved in legal charges which further taints a bad picture and reputation of Goldman US. These differences are the main reason why, while Goldman is the best company to work for in the UK, it is not the best in the US.

The “right” type of leader for Goldman Sachs

In the case study, Blankfein, the current CEO of Goldman have been identified as a trader. The authors, however, have gone ahead to insist that the bank requires statesmanship for a CEO. The first step to identifying whether a trader is a right leader or a statesmanship should replace Blankfein is to identify the role played by these two different leadership attributes to the strategic management of an international government.

As a trader, and having worked up the ranks as a trader in his company, Blankfein is aware of all avenues that the banks generate income. These avenues include exchange, securities, portfolio, and banking services among others. Blankfein has, in his life as a trader, participated in making millions for the bank through assets trading. At this point, it is important to note that a trader is not an investor and is not concerned about the long-term performance of an asset or an organisation for that matter but is instead interested in the short term trends surrounding an asset. Also, when working for an institution as a trader, just like Blankfein used to work for Goldman, you are rewarded with a bonus for the assets that you have traded profitably. As such, the trader is only concerned about how to profitably trade an asset and not the general performance of the institution. This is not comparable to an investor who must stay aware and fully informed about the performance of his organisation and the future performance of the portfolios (Donate and de Pablo, 2015).

When working as a trader, Blankfein was not concerned about the main goal of the bank which is an investment. Investment is defined as the goal of gradually building wealth over a period of time by buying and holding of investment instruments. Profits in investment are generated by reinvesting or compounding and this takes a long period of time. Trading, on the contrary, makes profits by buying assets at a lower price and selling at a higher price within a short time (Donate and de Pablo, 2015).

Based on this analysis, therefore, it is clear that Blankfein has excellent skills of a trader. However, it cannot be said the same about his skills in management or investment. As such, it is clear that he is not the right leader of the bank. Importantly to note even is the fact that the bank operates internationally. This means that the strategic management skills required to profitably operate the bank, Blankflein requires management skills beyond what he already has.

The author of the case study suggests a statesmanship. One peculiar attribute of a statesmanship is that the leader is highly aware of the affairs of other countries. To a statesmanship, the external environment of business is clear in all the potential countries that may be targeted. However, the question that arises is whether the statesmanship can integrate the external environment to the factors of the internal environment. Regarding this, this report examines the internal issues that Goldman is currently facing to determine the suitability of a statesmanship. The first is the issue of reputation that has been adversely affected by the 2010 charges that resulted to a fine of $550 million paid to mortgage-backed securities investors claimed to have been misled. Further, the bank has been accused of workaholism, conformity, and arrogance. The banks do not seem to suffer from issues related to statesmanship such as international politics, international markets, and relations and thus there is no need for a statesmanship. Also, the issues that Goldman Sachs is encountering now require a CEO with a more profound management background and skills and not just trading skills.

To deal with conformity, ethical practice is required for the entire banks’ leadership. Also, the leadership needs to confront the issue of workaholism by increasing sensation for employee’s rights. Extreme arrogance is another issue that needs to be confronted. To achieve all this, the bank requires a CEO with leadership and management skills like team building, integrity, communication, listening, delegation, and emotional intelligence.

Pros and Cons of the high level of employee engagement

Employee engagement refers to an approach that when applied in the workplace results to the encouraging of all the employees to give their best. This approach also promotes employee commitment to the company’s goals and values, motivation to participate in the organisation’s success and to improve their well-being. Various factors are necessary to facilitate employees’ engagement and some of these are trust, integrity, communication, and commitment among and by all the members of the organisation (Eldor and Harpaz, 2016). For the employees, employee engagement is waking up with the thought “I feel great going to work. I know what I will do. I have a team that I am looking forward to working with”. Based on this elaboration of what employee engagement means, it involves employees who understand their roles in the organisation, are sighted and are full of energy and are aware where this sightedness and energy is required in the organisation (Bolden, 2016). According to these definitions, it is clear that employee engagement has implications in the organisation. The following are some of the positive and negative implications of employee engagement.

Pros of the high level of employee engagement

Employee motivation; because employee engagement promotes employee participation, the employees feel motivated. This benefit is attained because to participate the employees are involved in important meetings which makes them feel special and encouraged to deliver better work and performance. Improved output; motivation to participate affects individual performance positively. Furthermore, employees' grow and as a result of the organisation also experiences growth.

Effective decision making; employee engagement exposes them to decision making and are asked to participate in the generation of ideas which makes the decision making the process more effective (Byrne, Peters and Weston, 2016) Increased work capacity; an employee's capacity to work is highly improved by the motivation received from participation. The reason for this is that the employees will usually work more because they feel like a part of the policy-making process. Increased sense of responsibility; because of becoming part of the policy-making process, the employees are granted authority and this comes along with responsibility. They work more responsibly and this beneficial both for the company and the subordinates. Better focused employees; employee engagement makes the employees feel paid attention to and as a result, they feel happy and able to focus on work.
Increased creativity; with more participation, the employees acquired a wider sense of the work and the perspectives and this increases creativity. Further, team building resulting from employee engagement encourages the interaction of diverse talents and expertise. Working together taps the diverse talents leading to improved creativity (Eldor and Harpaz, 2016). Fewer employees, more work; motivated employees with higher productivity and increased capacity to work results means that the organisation does not need to hire more staff to get work done.

Cons of the high level of employee engagement

Slower decision making; engaging all the employs into the decision-making process means that their views are all taken into consideration prior to passing decisions. It is impossible to have employees with equal IQ levels and therefore hard to sit and share ideas. The result is a waste of time. Top organisation policies are revealed; while it is important that all the employees are conversant with the policies structuring the organisation and the undertakings ongoing, it is also essential that only the top officials are aware of the company's top secrets. Say, for example, a company needs to keep its competitive plans and strategy as a secret from the competitors. Revealing this information to the employees risks the secret being known by the competitors.
Liberalisation; engaging the employees gives them freedom and authority as that of the top management. The risk of this is that if an employee is not responsible, they can easily misuse the authority and freedom leading to poor performance (Flores and Ekstedt, 2016). This problem can only be solved if the employees are provided authority, i.e are engaged, based on their responsibilities. Again this leads to not engaging them especially those at the lowest level and those with fewer responsibilities. Also, liberalisation may reduce respect and integrity especially if employees start thinking that there are no longer subordinates and share an equal space as their seniors. In such an environment, it is difficult to ensure ethical practice (Glavas, 2016).
Regular updates and training lead to time wasting; to enhance complete participative mode, the employees need to regularly be updated about the context of decisions and actions plans or works. Also, the employees required to attend workshops and seminars to be empowered to make decisions in line with the goals and objectives of the company. It is not only time consuming but also, it is expensive for instance to sponsor a workshop. The emerging question is whether the employees are capable of gaining the expertise and knowledge required to make the decisions after the workshop, the effort might not be worth it anyway.
Having considered the pros and the cons of employee engagement, it is important to realise that while Goldman UK practices it, in the US, the employees are not engaged. Somehow, the elaborated advantages and disadvantages noted above may be the reason why in the UK, Goldman is the best organisation to work for, the same cannot be said in the US. Besides the suggested change of the CEO to a manager and a leader instead of the trader, it is also important that Goldman also consider encouraging employee engagement in all its banks.

Senior leaders shape the culture of the organisation and limitations

The organisation’s culture is defined as those things that motivate, inspire and drive it. The culture sums up the stakeholder's values, interactions, and knowledge. Even simpler defined is that the organisation culture is how it operates including the methods used for interaction, how the employees and leaders treat each other how trust, dignity, and respect are shown (Rothaermel, 2015). So what is the role of the leaders in shaping this culture and what are some of the limitations they experience? This question is responded to by examining the case study of Goldman Sachs.

First and foremost, the senior leaders are responsible for ensuring that the employees understand the core values and behaviours that are a vital part of the organisation's culture. To achieve this, the senior leaders should lead by example. When the employees see the management modelling the values and behaviours, the follow suit (Hartnell et al., 2016). Importantly to note is that while the senior leaders might delegate some responsibilities, such as ensuring that the employees represent the organisation, to the HR, modelling the organisational culture requires that the senior leaders are actively involved because even the management team look up to the top leaders. This first responsibility is clear in the case of Goldman. In the UK, the employees report that they believe that the leaders truly live to the values. In the US also, the employees are highly concerned about the unethical behaviour of their leaders that leads to the customer dissatisfaction; the leaders are not well behaved and they don’t expect their employees to be.

Secondly, the leaders expect to shape the organisational culture to extents that the employees understand the company’s goals and visions and also these are a purpose to believe in. senior leaders know that the employees and the other management leaders are looking up to them to make it clear what is expected of them. By making it clear what is expected on the employees, the senior leaders control and develop the organisation culture. This can only be achieved if there is an established purpose to believe in (Harwiki, 2016). If the employees lack a focused purpose, in most cases, they will identify their own which could result in employees moving in different directions (putting efforts in the wrong directions). Such a division is not only a threat to the culture of the organisation but also to the performance. Goldman seems to be divided with a single purpose. This is a weakness that is attributed to the differences in the two branches of the bank described in the case study. That is, while as is clear, the UK Goldman has a focused purpose which not only includes serving the customer's to satisfaction but also maintaining high ethical standards. Poor ethical behaviour such as misleading the investors that are demonstrated by the senior leaders in the US Goldman has resulted in poor development of ethics is culture.

The major limitation to the extent the senior leaders can shape the culture of an organization is ideological control. As the leaders develop the culture of an organisation, they must be careful not to lead to manipulation (Hewison and Holden, 2016). Culture leadership may be seen as an imposition of a culture by the senior leaders on the employees. To this, employees might not react as expected and instead of accepting the culture, resistance may be exhibited which is also a threat to the performance and productivity of the company. Also, the senior leaders are limited to the extent to which they can shape the culture by the fact that culture is not mechanistic and therefore it cannot be assumed that leaders can ensure that a monoculture is established. In particular, the senior leaders are only able to facilitate the evolvement of culture by leading in the establishment of the most desired values but cannot ensure that these grow to a culture (Mann and Harter, 2016).

Continue your exploration of Servant Leadership in Non-Profit and Faith-Based Organizations with our related content.

References

• Bolden, R. (2016). Leadership, management, and organisational development. In Gower handbook of leadership and management development (pp. 143-158). Routledge.
• Byrne, Z. S., Peters, J. M., & Weston, J. W. (2016). The struggle with employee engagement: Measures and construct clarification using five samples. Journal of Applied Psychology, 101(9), 1201.
• Conway, E., Fu, N., Monks, K., Alfes, K., & Bailey, C. (2016). Demands or resources? The relationship between HR practices, employee engagement, and emotional exhaustion within a hybrid model of employment relations. Human Resource Management, 55(5), 901-917.
• Demirtas, O., & Akdogan, A. A. (2015). The effect of ethical leadership behavior on ethical climate, turnover intention, and affective commitment. Journal of Business Ethics, 130(1), 59-67.
• Donate, M. J., & de Pablo, J. D. S. (2015). The role of knowledge-oriented leadership in knowledge management practices and innovation. Journal of Business Research, 68(2), 360-370.
• Eldor, L., & Harpaz, I. (2016). A process model of employee engagement: The learning climate and its relationship with extra‐role performance behaviors. Journal of Organizational Behavior, 37(2), 213-235.
• Flores, W. R., & Ekstedt, M. (2016). Shaping intention to resist social engineering through transformational leadership, information security culture, and awareness. Computers & security, 59, 26-44.
• Glavas, A. (2016). Corporate social responsibility and employee engagement: Enabling employees to employ more of their whole selves at work. Frontiers in psychology, 7, 796. Hartnell, C. A., Kinicki, A. J., Lambert, L. S., Fugate, M., & Doyle Corner, P. (2016). Do similarities or differences between CEO leadership and organizational culture have a more positive effect on firm performance? A test of competing predictions. Journal of Applied Psychology, 101(6), 846
• Harwiki, W. (2016). The impact of servant leadership on organization culture, organizational commitment, organizational citizenship behaviour (OCB) and employee performance in women cooperatives. Procedia-Social and Behavioral Sciences, 219, 283-290.
• Hewison, R., & Holden, J. (2016). The cultural leadership handbook: how to run a creative organization. Routledge.
• Mann, A., & Harter, J. (2016). The worldwide employee engagement crisis. Gallup Business Journal, 7.
• Rothaermel, F. T. (2015). Strategic management. McGraw-Hill Education. Thorpe, R. (2016). Gower handbook of leadership and management development. CRC Press.