SWOT Analysis:

Strengths:

1. Goldman Sachs had already become a $125 billion company through many small
acquisitions, thus improving its market capitalization.
2. They had a broad array of investment advisory services.
3. They had a diverse client base, even from major stock and future exchanges that
earned them commissions.
4. Merchant banking funds derived gains for the company.
5. The company already had in place a corporate code of fourteen business principles
emphasizing on teamwork, integrity, reputation, talent and quality.
6. They had already implemented 360-degree feedback.
7. Goldman Sachs had also taken care of employee defections during the booming of
hedge-fund business, through the implementation of lateral hiring.
8. The attrition rate at Goldman Sachs was much less compared to that of the other
investment banks.
9. Goldman Sachs had a good structure – they had various committees overlooking the
management issues, strategic and operational cohesion, coordination among
divisions, partnership policy and the partners’ cultural issues.
10. They had multiple co-heads with different tenures which made transitions easier by
guaranteeing built-in overlaps.
11. Small leadership groups increased representation and ownership.
12. The company hired high achievers and thus did not need to train them as they got
promoted.
13. They had a rich corporate culture – working with high expectations, client satisfaction,
collaborative practices and openness to critique.
14. They had set effective and leadership development programs across various levels of
hierarchy.

Weaknesses:

1. Difficulty in maintaining the culture and leadership abilities of the employees as the
firm grew in size and became more complex.
 2. The interactions among leaders weren’t productive enough.
3. It became difficult to match the market demand as the firm grew.
4. The decision of IPO was seen with skepticism.
5. There was a lack of skills to manage a globally diverse organisation, even though
revenue was produced effectively.
6. Growth opportunities are high with very few leaders to handle such new divisions.
7. There was an inherent reluctance from the company’s managers to divert their
attention from line work to help grow better leaders.
8. Leadership programs lacked formalization

Opportunities:

1. The companies were going public and the IPO markets were booming.
2. The growth of new media, telecommunications and technology fueled investment
banking.

Threats:

1. Dot-com boom created shortage of skilled labour for the more professional roles, such
as bankers, lawyers and consultants.
2. Hiring from unskilled work force or a different work force (graduates, medical doctors,
etc.) distorted the strong existing cultures of professional firms.
3. Organic leader development models suffered as the workforce grew and became
more diverse with time. This had to be changed and newer programs be developed.

PESTEL

Political Environment:

 The political environment in the year 2000 was fairly stable for the US. No major
scandals or wars were present, and the government was pro-business. Investment
banks are significant donors for both the political parties.

Economic Environment:
  2000 was the later stage of the dot com boom, but there was still an abundant
availability of IPOs in the market.

Social Environment:

 With the dot com boom, a lot of companies were ready to pay high amounts to acquire
the best talents giving rise to a talent-war amongst the companies and a highly well-
off middle class.

Technological Environment:

 A boom in the tech industry had changed the landscape of the workplace. A computer
was available for everyone and at every desk. The executives would now have to make
decisions based on the technological future.

Legal Environment:

 Several de-regulations were done in the 1990s regarding the investment banks which
have helped the banks amass huge assets and client bases alongside with a strong pro-
bank lobby in Washington DC.

Recommendations:

 Use the headquarters as a centre for training. Bring in guest lecturers from esteemed
B-schools and also ask executives within the company to train the individuals about
leadership. GS can use existing business models and enhance their teaching.
 Goldman Sachs can first take a test of the individuals who they are preparing to train
and then can use specifics from the existing business models to train the individuals,
this will take lesser time and lesser place as individuals will be divided into groups. This
can be done in the headquarters.
 Goldman Sachs can use the building in New Jersey to build state-of-the-art learning
center as a place where everyone from the international workforce of Goldman Sachs
can come and get trained.
Solution:

 Goldman Sachs can go with the 3rd option, the state-of-the-art building will tell the
executives that the company is serious about the initiative.
 They can also use the building to research new ways to enhance their leadership
program.
 Guest lecturers can be called to this center as they would also me more inclined to
visit the center.
 Executives who work at the office in New York can be asked to come and teach the
individuals in their free time.