Comparing Leadership Styles: Goldman Sachs UK and US Operations

This report delves into the strategic international business management practices of Goldman Sachs, focusing on a comparative analysis of its leadership styles in the United Kingdom and the United States. The report highlights the contrasting approaches, with the UK emphasizing employee participation, job satisfaction, and a democratic leadership style, while the US prioritized business development and profits under a more autocratic leadership. The analysis explores the impact of these differing leadership styles on employee engagement, organizational culture, and ethical practices. The report also evaluates the effectiveness of Lloyd Blankfein's leadership in the US, discussing the pros and cons of high employee engagement, and suggesting alternative leadership approaches that could foster greater trust and long-term success. The report concludes by emphasizing the importance of ethical leadership, stakeholder consideration, and a balanced approach to employee engagement for sustainable business growth.

Running head: STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT
Strategic International Business Management
Name of the Student
Name of the University
Author Note

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Q1. 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.
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

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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

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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).
Q2. What would have been the ‘right’ type of leader’ for Goldman Sachs (was
Blankfein the ‘right’ leader: why/why not?).
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

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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

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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.
Q3. The pros and cons of having a high level of employee engagement
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

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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.

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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.

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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).
Q4. .To what extent senior leaders might reasonably expect to be able shape the culture
of an organization? (What are their limitations?).
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).

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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

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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.

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