Gsbs6481 International Business Strategy | Assessment Answers

1.The differences with respect to leadership, values and culture that existed between Goldman Sachs in the UK and the United States, including what you attribute them to.

Introduction

The notion of ethical leadership has gained a significant amount of prominence within the cannon of the modern business world and is used to motivate or influence the followers towards the achievement of the goals set for them (Bolman and Deal 2017). Smetana, Rogers and Welfel (2017) are of the viewpoint that the there is a close association between the leadership style which is being followed by an organization and the work culture predominant within the organization. As opined by Alvesson and Sveningsson (2015), leaders through the values, beliefs and also the practices which they follow for leading the subordinates can contribute in an effective manner towards the creation of an effective work culture. This is important since recent researches have shown that the productivity of an individual depends to a great extent on the kind of work culture which is being followed within the spectrum of an organization (Alvesson 2016). As opined by Ashikali and Groeneveld (2015), a congenial work environment can enhance the productivity of an individual in a positive manner and vice versa. This report will discuss about the manner in which the notion of leadership is related to work culture, employee engagement and other aspects in the particular context of the organization Goldman Sachs.

Differences in leadership, values and culture in Goldman Sachs UK and USA

According to a survey conducted by The Sunday Times (2007), “100 Best Companies To Work For”, Goldman Sachs, UK, ranked at the 1^st position. This rating given to the organisation clearly indicates the appreciation that the employees of the organisation offered to the leadership and also the practices followed by the organisation and its leaders for the management of its affairs (The Times 2010). The organisation, at the same time, is known for the effective work culture that it follows within its framework which has enabled the employees to perform in a much better manner (Sanghera 2010). However, when the rating of the same organisation in its USA branch is taken into consideration it reveals a different picture (Thomas 2007). For example, it is seen that the employees in USA branch of the same organisation are not as happy with the leadership style and also the organisational culture that the organisation is so reputed for in UK (The Times 2010). This can be attributed to difference in the work cultures of the two nations and also the implications of the same work practices of the organisation in the two different nations.

The organisational culture of Goldman Sachs UK has been rated as one of the best ones of the world not only in terms of the leadership which is being used by the organisation but also the manner in which the people are motivated to work (Sanghera 2010). The net result of this is the fact that the employees of the organisation can often be seen working late hours for the achievement of the work targets that are given to them (Thomas 2007). This might seem tiresome for the employees and a use of coercive power on the part of the organisation. However, at the same time, it needs to be noted that the organisation through the use of an effective organisational culture tries to mitigate the adverse effects of the work-stress felt by the employees (Sanghera 2010). For example, it is seen that the organisation actively takes the help of Hertzberg’s Dual Factor Theory of Motivation within its framework.

As opined by Belias and Koustelios (2014), there are two factors within the framework of an organisation which affect the motivation level of the employees and thereby their performance level, namely, the positive and the negative factors. On the one hand, the positive factors are the ones which affect the performance of the employees in a positive manner whereas the negative factors affect the performance of the employees in an adverse manner (Szczepa?ska-Woszczyna 2015). The organisation under discussion here for the process of its business in the UK tries to enhance the effect of the positive factors in addition to reducing the adverse effects of the negative factors. However, the use of this model to enhance the performance of the employees in the USA branch of the organisation is not effective since the people of USA are very concerned about work life balance. This becomes especially important when the fact that the leaders of the organisation try to encourage the employees to work for excessively long duration for the achievement of the goals of the organisation (The Times 2010).

The notion of personal well being is very important for the people of the nation of USA in comparison to the people of UK. This is perhaps one of the major reasons for the lack of success of the culture which is being promoted by the leaders of the concerned organisation in the nation of USA. In addition to this, the allegations that The Times (2010) made that the organisation often resorted to the use of ineffective as well as unethical practices for the process of its business in USA is another factor which has adversely impacted the success of the organisation in USA. For example, it is seen that the organisation “misled investors and 'overlooked' its obligations to its customers, calling into question its ethical behaviour” (Thomas 2007). Furthermore, the involvement of the organisation in the financial bankruptcy of Greece, USA recession and others had also adversely affected not only the perception of the people regarding the leadership of the organisation but also its culture as well (Sanghera 2010). The net result of this was the fact that many people came to see the culture as well as the leadership style of the organisation as a mere facade to overcome up the unethical practices followed by the organisation. These factors in short have given rise to the differences in leadership, values and culture in Goldman Sachs UK and USA.

Right type of leader for Goldman Sachs

One of the primary reasons for the unprecedented success which the organisation has been able to attain in the recent times is because of the effective leadership practice that the organisation follows within its framework. This effective leadership style followed by the organisation not only facilitates the process of the achievement of the overall goals of the organisation but also helps in the creation of an effective work culture as well (Sanghera 2010). However, in the recent times, especially in the nation of USA it is seen that the leadership style followed by the organisation has been much criticised. The effective utilisation of the ethical leadership framework is likely to help the concerned organisation and also its leaders in the achievement of its business objectives and also the process of leading the employees in a much effective manner (Valmohammadi and Roshanzamir 2015). As opined by Abdullah, Shamsuddin and Wahab (2015), the use of the notion of ethical leadership requires the leaders to not only take into effective consideration the various precepts of ethics for the decisions that they make but also to build ethical relationships with the followers as well. This style of leadership when viewed through the specific lens of the organisation under discussion here would reveal insightful details. For example, the organisation under discussion here has been used to following the kind of leadership style which tried to maximise the interests of the organisation (Sanghera 2010). Furthermore, for the attainment of higher profitability the organisation at the same time resorted to the use of various kinds of unethical means which put not only the organisation but also the nations in which it is operational at great risk.             

Goldman Sachs, through the effective use of ethical leadership would not only be able to resolve the organisational culture issues that it is facing currently but also reputational issues. As per Maslow’s Hierarchy of Needs, there are various basic needs of the employees which an organisation needs to fulfil so as to maximise their performance (O’Reilly III et al. 2014). However, when the operation of the organisation in USA is taken into effective consideration it becomes apparent the organisation failed to fulfil the personal well-being and work-life balance need of the employees. Through the effective use of this style of leadership, the organisation would not only be able to meet these basic needs of the employees but would also be able to create the kind of organisational culture which will be dominated by the notion of ethics (Antonakis and Day 2017). In addition to these, the use of this leadership will enable the organisation to mitigate the adverse effects of the reputational damage which it has incurred in the recent times because of the unethical practices followed by it through the use of ethical behaviour (Martinez et al. 2015). Thus, it can be the use of this style of leadership is the best option that the organisation has at its disposal currently.

Employee Engagement  

As opined by Carasco-Saul, Kim and Kim (2015), employee engagement can be defined as the extent to which the employees of an organisation are passionate regarding their job roles or committed towards the present organisation. In addition to this, the term is also used to denote the discretionary power that the employees within an organisation have (Soane 2014). Furthermore, in the recent times, it is also seen that the organisations try to enhance the engagement level between the employees so as to create the kind of work culture wherein the employees not only feel comfortable but also motivate to work in an effective manner as well (Anitha 2014). As per “BlessingWhite’s engagement model”, the model of employee engagement used by the organisation should not only seek to maximise the individual contribution of the employees towards the cause of the organisation but also take into effective consideration the well-being of the employees as well (Breevaart et al. 2014). In the particular context of Goldman Sachs, the organisation tried to maximise the contribution of the employees towards the growth of the organisation but failed to take into effective consideration the well-being of the employees.  

Mone and London (2018) are of the viewpoint that the effective utilisation of the concept of employee engagement not only helps in the improvement of the productivity of the organisation but also helps in the process of the growth of the organisation as well. In addition to this, it is seen that this concept is being used by the different organisations to make the employees passionate about their job roles and also to enhance the engagement level among the employees (Soane 2014). As opined by Breevaart et al. (2014), this is important since it helps in the creation of kind of organisational culture wherein the employees are being able to maximise their potential. Moreover, recent researches have suggested that the effective use of employee engagement enables an organisation to not only create effective work relationships between the different employees of the organisation but also to motivate them as well (Carasco-Saul, Kim and Kim 2015). However, there are various negative aspects associated with the usage of the concept of employee engagement as well. For example, it is seen that excessive usage of this policy often takes a toll on the personal well-being of the employees (Breevaart et al. 2014). In addition to this, it is also seen the meaning of the actual messages often get lost and rumours take their place. Moreover, at times it is seen that because of the use of this policy unnecessary chaos are created which affect the normal work of the employees.

Senior leaders and Organisational culture    

Martinez et al. (2015) are of the viewpoint that the leaders and also the leadership styles followed by them play a pivotal role in the formulation of an organisational culture and its effectiveness. For example, if a leader is taking the help of ethical leadership then an ethical work culture gets created within the organisation wherein the employees take into effective consideration the notion of ethics for their work (O’Reilly III et al. 2014). On the other hand, if an organisation follows autocratic leadership then an autocratic culture gets created within the organisation wherein the employee do not have much say in the affairs of the organisation (Alvesson 2016). Thus, it can be said that the seniors of an organisation play a vital role in the formulation as well as the implementation of the organisational culture of an organisation. This becomes especially important when the case of the organisation Goldman Sachs is taken into effective consideration.

The leaders of the organisation Goldman Sachs have created the kind of culture within the framework of Goldman Sachs wherein the employees feel not only motivated to give their maximum effort but also to work beyond their normal shift hours (Sanghera 2010). This is directly associated with the values, beliefs and other aspects of the leadership style which is being followed within the organisation and which is being portrayed to the employees. Furthermore, the leaders of the organisation at the same time try to propound the viewpoint that the individual or the personal growth of the employees is related to the overall growth of the organisation (The Times 2010). They have thus tried to create the kind of congenial culture within the organisation wherein the employees would be able to not only believe this fact but at the same time would be able to work accordingly (Sanghera 2010). Bolman and Deal (2017) are of the viewpoint that the seniors of an organisation play a significant role in shaping the values as well as the beliefs of an organisation and thereby they have the ability to shape or mould the culture which is being followed within that organisation.

There are various limitations of the manner in which the senior managers of the organisation Goldman Sachs have shaped the work culture of the concerned organisation. For example, it is seen that the work culture of the concerned organisation totally negates or disregards the factor of well-being of the employees (Thomas 2007). Furthermore, the work culture of the concerned organisation encourages the employees to not only work in an aggressive but at the same time way beyond their shift hours as well (Sanghera 2010). This actually takes a toll on the well-being of the employees and this is one of the major limitations of the culture followed by the organisation as becomes apparent from the case of the organisation in USA. In addition to this, it is seen that the sole focus of the organisational culture of Goldman Sachs is on short-term benefits rather than long-term benefits.

Conclusion

To conclude, the leadership style which is being followed within the framework of an organisation to a great extent determines the prospects of that organisation. For example, the leaders are not only imbued with the job role of influencing or motivating the individuals but they are also imbued with the responsibility of the creation of an effective organisational culture as well. The notion of organisational culture is important since it is directly related to the performance level of the employees. Furthermore, it is seen that an effective organisational culture can positively influence the performance of the employees whereas an ineffective one can adversely impact the same. In addition to these, employee engagement is another factor which substantially affects the performance level of the employees and thus it becomes important for the leaders to take into effective consideration this aspect.

References

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Alvesson, M. and Sveningsson, S., 2015. Changing organizational culture: Cultural change work in progress. Routledge.

Alvesson, M. ed., 2016. Organizational culture. Sage.

Anitha, J., 2014. Determinants of employee engagement and their impact on employee performance. International journal of productivity and performance management, 63(3), p.308.

Antonakis, J. and Day, D.V. eds., 2017. The nature of leadership. Sage publications.

Ashikali, T. and Groeneveld, S., 2015. Diversity management in public organizations and its effect on employees’ affective commitment: The role of transformational leadership and the inclusiveness of the organizational culture. Review of Public Personnel Administration, 35(2), pp.146-168.

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