Evaluating Corporate Strategy: Leadership, Engagement, and Limitations

This report examines Goldman Sachs' corporate strategy, contrasting its United Kingdom and United States operations based on leadership styles, organizational values, and culture. It identifies output-oriented and transformational leadership approaches, alongside values like loyalty and efficiency, and cultures such as clan and hierarchy. The report highlights the impact of these differences on employee engagement and organizational performance, suggesting that a situational leadership approach, which adapts to varying business contexts, would be most effective. It further discusses the pros and cons of high employee engagement and the limitations leaders face in shaping organizational culture, concluding that a balanced approach considering both profit and stakeholder welfare is crucial for sustainable success. Desklib provides a platform to explore similar assignments and study resources for students.

Running head: CORPORATE STRATEGY
Corporate strategy
Name of the student
Name of the university
Author note

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Executive summary
The aim of this report is to discuss about the issues being faced by Goldman Sachs in their
different foreign country operations. In this report, United States and United Kingdom are being
selected and it is identified that United Kingdom operations of Goldman Sachs are more
effective than that of their United States operations. Differences in terms of leadership styles,
values and cultures are being evaluated. This report also discussed about the pros and cons of
high level of employee engagement and characteristics of a right leader being required for
Goldman Sachs. The major limitations of the leaders in shaping up the organizational culture are
also critically analyzed. There are number of limitations being identified in this report for the
leaders.

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Table of Contents
Introduction......................................................................................................................................3
Identification of the leadership styles, values and culture...............................................................4
Output oriented leadership...........................................................................................................4
Transformational leadership........................................................................................................4
Organizational values and cultures..............................................................................................4
Key similarities............................................................................................................................5
Key differences............................................................................................................................6
Identification of the right type of leader..........................................................................................7
Pros of high level of employee engagement....................................................................................8
Cons of high level of employee engagement...................................................................................9
Limitations of the leaders..............................................................................................................10
Conclusion.....................................................................................................................................11
Reference.......................................................................................................................................13
Bibliography..................................................................................................................................16

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Introduction
In the current business scenario, one of the major factors that determine the
organizational effectiveness is the leadership approach. This is due to the reason that leadership
approach of an organization determines the efficiency and productivity of the employees and to
what extent the organization is dealing with the business challenges effectively. Thus, leadership
plays an important role for the business organizations in gaining competitive advantages in the
market (Zhu, Sung and Leung 2014). In addition, it also determines the culture and values to be
followed in the internal management. There are number of instances where it is seen that
effectiveness of the leadership helped the organizations in driving towards success and vice
versa. One such prime example is of Goldman Sachs. This is due to the fact that they are
awarded for being the best employer in their United Kingdom operation and criticized for their
unfavorable working environment in their United States operation (Filatotchev and Nakajima
2014).
Goldman Sachs is one of the top financial institutions in the world with having their
operations in different countries around the world. However, it is quite uncommon that a same
company is awarded as well as criticized for their employee management approach in two
different countries. Thus, it is the effectiveness of their internal management that is making the
differences. This report will discuss about the sources of these differences from the perspective
of leadership, organizational values and culture. In addition, this report will also discuss about
the right type of leader that is need for Goldman Sachs in their business operation. The pros and
cons of high level of employee engagement will be identified and critically analyzed. Lastly, the
limitations of the leaders in shaping up the organizational culture will be discussed in this report.

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Identification of the leadership styles, values and culture
Output oriented leadership
One of the major styles of leaderships being stated in the corporate strategy is the output
oriented leadership. This refers to the process of focusing mainly on achieving the organizational
objectives without having much concentration on the employee welfare. In addition, this style of
leadership also does not have the provision for determining the value of the external stakeholders
including the customers. According to Day and Dragoni (2015), initiation of the output oriented
leadership style may have both positive and negative impacts. This is due to the reason that
output oriented leadership will help the managers in maximizing the output and performance of
the employees and contributes in the organizational success.
Transformational leadership
Transformational leadership is one of most common and desired styles of leadership
being stated in the corporate strategy. This refers to the process of providing an healthy and
communicative working environment in the workplace and having the highest valuation for the
ethical principles and stakeholders. According to Wu et al., (2015), initiation of the
transformational leadership helps the business organizations in having highly satisfied and
engaged employees in place.
Organizational values and cultures
One of the major types of core values for the organization as per the corporate strategy is
loyalty. This refers to the extent to which the stakeholders are loyal in their workplace and the
extent to which they are maintaining their loyalty in providing the service to the customers. It

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helps in enhancing the organizational citizenship among the internal stakeholders. On the other
hand, another major value is efficiency (Bourne and Jenkins 2013). This refers to the approach of
enhancing the effectiveness of the stakeholders and the extent to which they are working better
than their competitors. Differences in implementing these values have caused in different
consequences in the UK and US operations.
In terms of organizational culture, one of the major cultures being followed in the current
businesses is clan culture. This refers to the approach of having collaborative environment in the
workplace with having focus on teamwork and effective communication process (Schmiedel,
Vom Brocke and Recker 2014). Another major type of culture is hierarchy structure that refers to
the presence of the strict and ladder based structure in the organization. This culture is based on
organized procedures and all the stakeholders are bound to it.
Key similarities
According to Klettner, Clarke and Boersma (2014), this style of leadership is being
followed in the both country operations of Goldman Sachs. This is due to the reason that it is
identified in the United Kingdom operations of them that employees are working beyond their
working hours to ensure the output of the organization and on the other hand, it is also reported
that Goldman Sachs gained a fortune in terms of their business. It is also identified that both the
operations are following efficiency value (Jourdain and Chenevert 2015). This is due to the
reason that in the UK operations of Goldman Sachs, employees are positively motivated to be
efficient in their workplace. This causing positive branding in the market and in the US
operation, employees are negatively motivated in being efficient and thus even though they are
having issues but the company is earning fortune. In addition, hierarchy organization structure is

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being maintained in both the operation due to the fact that both the operations are having higher
degree of managerial roles and employees are being leaded from the front (Laschinger et al.
2014). However, in the UK operation, effective communication process is being maintained
across the hierarchy but in the case of the US operation, this effectiveness in less.
Key differences
In terms of this perspective, it is identified that United Kingdom operations of Goldman
Sachs is having this leadership style but in their United States operation. This is due to the reason
that in the case study it is stated that employees and customers are highly satisfied with the
business approach of Goldman Sachs in the United Kingdom and vice versa in the United States.
This is one of the major differences being identified between the operations of Goldman Sachs in
these two countries. In addition, according to Strand (2014), following transformational
leadership in the United Kingdom operations of Goldman Sachs is complementing the
effectiveness of their output oriented leadership approach, which is not applicable in the case of
their United States operation. This is due to the reason that with the help of the transformational
leadership, employees in the United Kingdom are more motivated in their workplace and thus
output oriented approach is positively impacting on them to enhance their performance.
It is identified that, UK operations of Goldman Sachs are having majorly clan culture
with the having equal representation of all the internal stakeholders in the workplace. This is
further enhancing the level of coordination among them and increasing the effectiveness of the
hierarchy structure (Wei, Samiee and Lee 2014). On the other hand, it is also being identified
that loyalty is not being considered as a core value in their US operations. This is major reason
behind the loyal productivity and organizational citizenship of the employees in the US. On the

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other hand, considerations of the loyalty as the core value are helping Goldman Sachs in
enhancing the employer branding.
Identification of the right type of leader
As per the information stated in the given case study, it is identified that Blankfein is not
a right leader for a company such as Goldman Sachs. This is due to the reason that one of the
major competing factors of Goldman Sachs from their initial stage is caring for the customers
and other stakeholders (Pierro et al. 2013). However, under the leadership of Blankfein, the
major focus is being given only on profit maximization over the welfare of the stakeholders and
maintaining their traditional cultures. In addition, the leadership style of him is not sustainable in
nature due to the reason that profit maximization will be short term if the stakeholders are not
being considered in the organizational affairs. This is also evident in the given case study where
it is reported that Goldman Sachs faced reduction in their earnings by about 82 percent. Thus, it
can be concluded that Blankfein is an ideal leader for Goldman Sachs in their business operation.
In the case of the Goldman Sachs, the ideal leader should have situational qualities and
flexibilities in changing the approach according to the business situations. In addition, the right
leader also should have the capability of determining the differences in cultures in different
countries (McCleskey 2014). In this case, situational leadership theory will be the most effective
and ideal for Goldman Sachs. This is due to the reason that according to the situational
leadership theory, leaders should have both the qualities of autocratic and democratic approach
in order to lead the organization through different business situations. In addition, it should be
noted that cultures in the United Kingdom and United States are different in nature and effective
considerations of these differences are important. In the case of situational leadership, these

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differences can be effectively managed without having the requirement for changing them
(Thompson and Glaso 2015).
Situational leadership also refers to the fact that effectiveness of the leaders is not
depended only on a particular style or approach but on different external situations. If the
democratic leadership is being followed at the time of challenging business situation, then it will
not be an effective option due to the fact it will slow down the decision making process (Bedford
and Gehlert 2013). On the other hand, continuous process of following autocratic leadership will
cause dissatisfaction among the stakeholders as relevant in the United States operation of
Goldman Sachs. Thus, in the case of the situational leadership, leadership styles can be changed
based on the external factors. This will enable Goldman Sachs in having right style of leadership
according to situation in the United States business and United Kingdom business.
Pros of high level of employee engagement
 One of the major advantages of having high level of employee engagement is higher level
of productivity. This is due to the reason that engaged employees will be more involved
and motivated in performing in their workplace (Alfes et al. 2013). In addition, their
increased level of organizational citizenship will also ensure that they will take initiatives
by own and will further contribute in the organizational success. Thus, the productivity of
the organization will get enhanced with the help of the high level of engagement among
the employees.
 Another major advantage of having high level of employee engagement is lower
probability of emergence of employee issues. This is due to the reason that this is if the
employees are more engaged in their workplace, then they will be more motivated in

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solving their problems by own without having dependence on the upper level
management (Anitha 2014). Thus, the mangers and the leaders will have to manage fewer
amounts of employee related issues in the organization.
 High level of employee engagement will also ensure that rate of emergence of innovative
ideas will be higher. This is due to the reason that engaged employees are less dependent
on others and they will more come up with innovative ideas. Thus, the managers will
have the provision of more ideas against a certain problem and they will be able to uplift
the innovative approach of the organization (Breevaart et al. 2014).
Cons of high level of employee engagement
 One of the major disadvantages of high level of employee engagement is added time
consumption in the decision making process (Saks and Gruman 2014). This is due to
the reason that highly engaged employees will have more power and value in the
decision making process. This will cause emergence of diverse opinions in the
organization and will pose difficulty for the managers in building consensus.
 Another disadvantage for the high level of employee engagement is the added cost
and responsibility in training the employees. This is important due to the reason that
periodical training will help the employees to get engaged in their workplace along
with being equipped to deal with the newer challenges (Mishra, Boynton and Mishra
2014). Thus, it is a challenge for the managers to provide the training to the
employees in periodical manner. In addition, in the case of the diversified workforce,
the challenges will be more for the managers due to the reason that diversified
workforce will have different sets of employees from different social and cultural

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backgrounds. They will have different sets of approach, which should be determined
by the managers prior to the providence of the training.
Limitations of the leaders
It is evident that leadership is one of the prime factors gaining competitive advantages for
the organizations and in shaping their culture. However, there are number of limitations being
identified for the leadership in shaping up the internal culture of the organization. One of the
major limitations of the leaders is enhancing the individual skills of the employees. This is due to
the reason that leaders can help in enhancing the skill sets of the employees being required in the
workplace but they will not be able to enhance their skills based on their education and social
backgrounds (Roos 2013). Thus, if the few employees are not the perfect choice for the
particular job role, then it will be difficult for the leaders in enhancing their basic skills and
expertise. The effectiveness of the leaders in enhancing the skills of the employees will be
limited to the organizational requirement.
Another limitation of the leaders in shaping up the organizational culture is lack of ability
to change the different social culture of the diversified employees. In the case of diversified
workforce, employees will be from different social backgrounds and it will be the responsibility
of the leaders to align the different social cultures of the employees with that of the
organizational approach. However, they will not be able to change the individual cultural
difference of the employees (Tyssen, Wald and Spieth 2014). Thus, if the cultural differences
between the employees are contradicting with one another, then also the leaders will not be able
to resolve it and it can identified as one of their major limitations. It should be noted that leaders
are also humans and they can also be influenced by the different external factors. Hence, there

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may be situations where the decision making process of the leaders are getting influenced and
deviated due to the presence of the external factors. This will cause hindrances in having an ideal
organizational culture in place.
Leaders are also having limited provision in enhancing the productivity of the employees.
This is due to the reason that it is the responsibility of the leaders to initiate different training and
development programs for the employees in order to enhance their productivity and
effectiveness. However, on the other hand, if the productivity and performance of the employees
still cannot be increased with the help of training and development, then leaders will not have
any other options left (Tyssen, Wald and Spieth 2014). In addition, it should also be noted that if
the performance of the employees is being affected due to their personal matters, then also the
leaders are having very less to do in resolving the issues. This is due to the reason that leaders
can be effective in resolving the organization related issues of the employees but not their
personal issues. Thus, it can also be considered as another major limitation of the leaders. From
the above discussion, it is identified that effectiveness of the leaders is limited to the
organizational boundaries and beyond that they are nothing to do (Saks and Gruman 2014).
Even, there are number of factors inside the boundaries of the organization, which cannot be
resolved by the leaders such as increasing the productivity of the employees after a certain
extent.
Conclusion
This report concludes that Goldman Sachs is having different level of internal
management in their United Kingdom and United States operations. This is causing different
outcome from these two operations. The positive sides of their United Kingdom operations are