Applied Management Report

This report analyzes Goldman Sachs Group, Inc.'s competitive advantage, focusing on the roles of recruitment, retention, and training. It defines competitive advantage, differentiating between cost and differentiation advantages, and presents a model illustrating how capabilities and resources contribute to value creation. The report examines Goldman Sachs's practices in recruitment, highlighting their selection criteria for high-ability candidates. It discusses the importance of employee retention, emphasizing the cost savings and efficiency gains associated with retaining experienced employees. The report also details Goldman Sachs's training programs, including both on-the-job and off-the-job training, and their impact on employee skills and performance. A comparison is made between Goldman Sachs's practices and best practices in areas such as goal setting, communication, and reward systems. Finally, the report suggests steps Goldman Sachs could take to further enhance its competitive advantage through improved recruitment, retention, and training strategies, emphasizing the need for targeted training based on individual employee needs and a focus on employee retention to reduce costs and improve efficiency.

Applied Management

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................2
1. Competitive advantage and ways to relate strategic human resource management...........2
2. Role of recruitment, retention and training in influencing the companies competitive
advantages..............................................................................................................................4
3. Comparison between the company’s practices and the best practice.................................6
4. Steps which a company should follow in terms of training, retention and recruitment in
order to gain sustainable competitive advantages..................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

ILLUSTRATION INDEX
Illustration 1: Model of competitive advantage...............................................................................3
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INTRODUCTION
Applied management is a type of study which analyse different ways in which skills of
management are used in different areas of businesses. Normally this field is pursued by those
who work in technical field who already possess few essential hands on skills (Pasternack and
et.al., 2008). Present report is about Goldman Sachs Group, Inc. which an American
multinational financial services and engages in global investment banking. It was founded in the
year 1869 and is headquartered at Lower Manhattan area of New York. It has approximately
120000 employees working with the aim to achieve the organizational goals and objectives. This
report covers competitive advantages the firm has and impact of retention, training and
recruitment on the company's competitive advantage. Further, it covers the comparison between
company's practices and the best practices. Moreover, it covers the steps which the firm should
take in order to gain sustainable competitive advantage in terms of retention, training and
recruitment.
1. Competitive advantage and ways to relate strategic human resource management
Competitive advantage can be defined as a business concept that describes the attributes
and enables the firm to outperform their competitors. In simple words, these are the strategies
which a firm adopt in order to compete effectively (Chughtai, 2008). Basically there are two type
of competitive advantages, which are cost advantage and differentiation advantage. If an
organization is able to provide same benefits like its competitors but in low cost, then it is said to
have cost advantage. On the other hand, when a firm delivers advantage which exceeds the
competing product, then it is said to have differentiation advantage.
Firm uses its resources effectively in order to compete effectively. Organization should use its
capabilities and resources in creating a competitive advantage which help in creating value.
Following is a model for competitive advantage:
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Capabilities and Resources:
In order to compete effectively organization should be able to utilize its capabilities and
resources. If a firm fail in utilizing these, then the competitors will simply replicate the attempts
done by the firm and firm would fail in competing effectively (Competitive Advantage, 2010).
Resources: These are organizations specific assets which are helpful in developing
differentiation or cost advantage and which can be acquired easily by few competitors.
Capabilities: It is the ability of the organization to use resources effectively. For example,
capability to bring a service or product before competitors. Distinctive competencies is formed
for both capabilities and resources. These competencies are helpful in developing efficiency,
innovation, customer responsiveness and quality. All these are creates differentiation advantage
or cost advantage.
Cost advantages and differentiation advantage
By using capabilities and resources competitive advantage is created which are helpful in
achieving a differentiation product or a lower cost structure (Leach, Pelkey and Sabatier, 2002).
In order to compete effectively organization should be able to use its capabilities effectively so
that they use resources efficiently and could come up with something new which will be helpful
in competing with their competitors.
Value creation
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Illustration
1: Model of competitive advantage
(Source: Competitive Advantage, 2010)

Organization creates value only when it performs series of actions in the value chain. In simple
words, the organization should develop value to their customers by providing them with all
needs and requirements.
Strategic human resource management is an approach which supports manages human resources
which is helpful to support long term outcomes and goals of business with a systematic
framework. It basically involves all the components of human resource like discipline, payroll
and hiring or recruitment (Rand, 2000). In addition to this it also includes retention of
employees, improving work quality, improving the employees mutual benefits, etc.
HR is the one who has to play this role in order to compete effectively and this is possible when
he would perform his role efficiently. Mainly the basic roles of the HR is to recruitment, training,
development, retention, etc. According to researcher there are three main generic functions
which reward, selection and appraisal. For competitive success one should be very careful in
selecting or hiring employees of the organization. Selection can be regarded as the primary
mechanism which helps in improving the firm's capacity (Billsberry, 2008). Appraisal
performance is a process through which a firm evaluates and measures the employee's
accomplishment and behaviour. Rewards are helpful in encouraging and motivating the
employees. In addition to this it helps in improving the quality of work which is delivered by the
organization to the employees.
2. Role of recruitment, retention and training in influencing the companies competitive
advantages
Competitive advantages play a vital role, which influence the retention, recruitment and
training process of the organization. Following are the process retention, recruitment and training
of Goldman Sachs Group, Inc. in influencing competitive advantages:
Recruitment: Goldman Sachs Group, Inc. hire employees frequently, as it is a well known firm
and most of the employees try to get job in it. Applicants can apply through online or by directly
visiting the company when there is a vacancy. They firm gives advertisement on the newspaper
and its official page (Paridon and Carraher, 2009). The organization is very careful in selecting
the right candidate. They consider the qualification, skills and knowledge which the candidate
possess. Form the applied application the firm selects few. Selected candidates are call for the
personal interview. In order to achieve competitive advantage the candidates are analysed
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according to the skills they possess and the experience they have. Following are the qualities
which the firm look for:
 Candidate with more competencies
 Candidate who can develop themselves with the help of the companies training.
 Who can generate ideas which can be helpful for the growth of the organization.
 Who can follow all the rules and can perform tasks with less error.
 Candidate who will stay with the organization for a long time.
The goal of the Goldman Sachs Group, Inc. is to select a candidate who with the highest abilities.
In the competitive words selecting employees is as hard as to attract a customer.
Retention: Retaining an employee is better than hiring a new one. Goldman Sachs Group, Inc.
focus on retaining their employee by understand the problems or issues of their employees
solving them and by fulfilling all the need and wants of the employee (Dale, 2003). There are
many benefits through in retaining employees like these employees do not need training as
compared to employees who are selected through recruitment process. These employees will be
able to contribute to the employee more efficiently and effectively as they already know their
job, management need not to give extra efforts in explaining their roles and responsibilities.
Retaining employees will be helpful in competing effectively as it will help in reducing the cost
which firm would incur hiring a new one.
Training: Training play a vital in improving the skills and in improving the performance of the
employees. Goldman Sachs Group, Inc. conducts many training programs according to the
requirements of the employees the firm understands the employee's drawback and areas where
they lack. Goldman Sachs Group, Inc. applies both On-the -job training and Off-the -job training
(Kersley, 2006). The organization analysis all the employee and according to their need they
provide training. These training help in knowing the roles and responsibilities of the employees
more clearly which helps them to perform more efficiently. Training guides them and clarifies all
their doubts and enhance their skills. In addition to this it also helps them in competing
effectively with their competitors. As training will help in enhancing their skills by which
employees will perform will their full efficiency. No doubt the firm has to invest highly on
training and development program but the return through training will be high.
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External business environment of Goldman Sachs Group, Inc.
There are many factors which affects the Goldman Sachs Group, Inc. which are legal, liquidity,
market and regulations.
Market fluctuations: Being an investment securities and banking firm, businesses are highly
affected by the conditions in the economic and financial market generally. It does affects both in
U.S. and all around the world. The debt and equity market of around the world or specifically in
U.S has achieved near record level and this favourable condition of business is not continue
indefinitely.
3. Comparison between the company’s practices and the best practice
Following are the best practices which a firm can follow:
Objective and goals: It includes all the objective and their relationship with the organizations
goals. When the goals are not clear, then it becomes very difficult to formulate the planning
efforts. With the help of planning firm can allocate resource and could schedule easily (Lundy
and Cowling, 2000).
Recruitment: The argument arise that who the management of the firm can select a right
candidate. Most of the management of different firms uses job description and job analysis. In
addition to this, there are many models which are helpful in selecting employees (Manzoor,
2012). Firms use any mode in conducting the selection process effectively.
Commitment: Peter and Kline, (2009) defines commitment as a process by which the employees
get psychologically involved towards the tasks given to them in such a way that they feel a
personal obligation in completing the task. On the other hand, according to Jim and John, (2010)
the state were the organization goals becomes personal then it is commitment.
Communication: To perform effective work good communication is important. It is basically the
responsibility of the manger or the team leader to adopt different tools, system or techniques in
order to have an effective communication. Different firms adopts different types of strategies for
effective communication (Michalowitz, 2007). In a firm in which employee communicate
effectively perform their task more with their full efficiency. In addition to this, they share all
their issues or ideas freely with their management.
Minimizing threats: This is one of the best practices which a firm can follow. According to this
practice management should try to solve all the problem which their employee or customers face
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and this is only possible if they the management conduct various research and surveys which will
be helpful in understanding the drawback or the treats faced by the organization.
Designing a personal reward system and appraisal: According to Leach, Pelkey and Sabatier,
(2002) rewards should be given to the employee according to their performance. It helps in
motivating them and in encouraging them to perform more efficiently. According to Billsberry,
(2008) employees perform effectively so that they get the reward not because they want to
achieve the goal or objective of the organization.
4. Steps which a company should follow in terms of training, retention and recruitment in order
to gain sustainable competitive advantages
These three elements are very important for competitive advantage. There are many firms which
focus on providing proper training, retention and recruitment process. For example, HSBC bank
focus on retention on employees other than hiring new candidates as they the organization know
that it will help in reducing the cost. HSBC maintains a strong relation ship with their employee
so that they can understand the issues or problems which they face while performing their task
(Strategic Hiring and Selection, 2005). They are very careful in selection process, if the
candidates selected through recruitment process is not efficient enough then another selection
process has to be conducted and for which the firm has to spent more and as result the experience
increases.
On the other hand, Goldman Sachs Group, Inc. should also focus on retention their employee as
it is very helpful in reducing the cost. They should understand the issues or problems which the
employee were facing and accordingly they should develop strategies which will retain
employees. In addition to this, all the need and requirement should be satisfied so that employee
can work with a free mind. Further, they should focus on providing training and development
program to those employees who have to improve their skills. In order to provide training,
management should analyse the employees individually so that all the areas which the employees
lack can be determined and accordingly they can be given training. According to the findings,
Goldman Sachs Group, Inc. spent highly on providing training to their employees (Michalowitz,
2007). In order to make improvement they should try to identify the employees who really need
training so that expenses for training which the firm spends can be reduced. This is possible if
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the organization analysis all the employee and should know what all skills or drawback they face
or lack.
CONCLUSION
From this report, it can be articulated that the main factor which sets an organization from
its competitors is the employees. They are very essential in order to provide growth to the
organization. The organization should be very careful in hiring a candidate. In addition to this,
firm should always focus on retention rather than hiring employees as it reduces the expenses.
Moreover, in order to be competitive organization should use its capabilities so that it could use
resource efficiently and effectively.
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REFERENCES
Books and Journals
Billsberry, J., 2008. Experiencing Recruitment and Selection. John Wiley & Sons.
Chughtai, A. A., 2008. Impact of job involvement on in-role job performance and organizational
citizenship behavior. Journal of Behavioral and Applied Management. 9(2). pp.169-183.
Dale, M., 2003. A Manager's Guide to Recruitment & Selection. Kogan Page Publishers.
Kersley, B., 2006. Inside the workplace: findings from the 2004 Workplace Employment
Relations Survey. Routledge.
Leach, Pelkey, N. W. and Sabatier, P. A., 2002. Stakeholder partnerships as collaborative
policymaking: Evaluation criteria applied to watershed management in California and
Washington. Journal of policy analysis and management. 21(4). pp.645-670.
Lundy, O. and Cowling, A., 2000. Strategic Human Resource Management. London: Thompson.
Manzoor, Q.A., 2012. Impact of Employees Motivation on Organizational Effectiveness.
Business Management and Strategy. 3(1).
Michalowitz, I., 2007. What determines influence? Assessing conditions for decision-making
influence of interest groups in the EU 1. Journal of European Public Policy. 14(1). pp
132-151.
Paridon, T. J. and Carraher, S. M., 2009. Entrepreneurial marketing: Customer shopping value
and patronage behavior. Journal of Applied Management and Entrepreneurship. 14(2).
pp.3.
Pasternack, A. and et.al., 2008. Applied Management Science, 2Nd Ed (W/Cd). John Wiley &
Sons.
Rand, G. K., 2000. Critical chain: the theory of constraints applied to project management.
International Journal of Project Management. 18(3). pp.173-177.
Online
Strategic Hiring and Selection. 2005. [Online]. Available through:
<http://www.capabilityconsulting.com/strategic_hiring.html>. [Accessed on 3rd
December, 2015].
Competitive Advantage. 2010. [Online]. Available though:
<http://www.quickmba.com/strategy/competitive-advantage/>. [Accessed on 3rd
December 2015].
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