Goldman Sachs

The Goldman Sachs Group, Inc. is an American multinational investment banking firm that engages in global investment banking, securities, investment management, and other financial services primarily with institutional clients.

History:

Goldman Sachs was founded in New York in 1869 by the German-born Marcus Goldman In 1882, Goldman's son-in-law Samuel Sachs joined the firm. In 1885, Goldman took his son Henry and his son-in-law Ludwig Dreyfuss into the business and the firm adopted its present name, Goldman Sachs & Co.

Services:

• Investment Banking services include advisory assignments with respect to mergers and acquisitions, divestitures, corporate defense activities, risk management, restructurings and spin-offs, and debt and equity underwriting of public offerings and private placements, as well as derivative transactions directly related to these activities. 
• Investment Client Services facilitate client transactions and make markets in fixed income, equity, currency and commodity products, primarily with institutional clients such as corporates, financial institutions, investment funds and governments.
• Investing and Lending: They also invest in and originate loans to provide financing to clients. They also make investments, directly and indirectly through funds that we manage, in debt securities, loans, public and private equity securities, real estate, consolidated investment entities and power generation facilities.
• Investment Management: They provide investment management services and offer investment products across all major asset classes to a diverse set of institutional and individual clients. They also offer wealth advisory services, including portfolio management and financial counseling, and brokerage and other transaction services to high-net-worth individuals and families. 

Market share:

In the last couple of years Goldman Sachs has been losing it's competitive edge because of the number of scams which have come up within it the customers have started losing trust.

Geographical Spread:

Goldman sachs offices are spread throughout the world being one of the top financial institutions in the world and almost all of us are either directly or indirectly using their services. Because even the money deposited by us in the banks is finally invested in these investment banking firms.

This is because of our inherent human nature wherein we are not satisfied with what we have and always crave for more.

Business Principles:

Goldman Sachs does not have any vision or mission statement instead they have Business principles because of the nature of the business involved i.e. what really is required is a set of ethics and principles to be followed when one is responsible for other peoples money. The business principles as laid down by Goldman Sachs are:

1. OUR CLIENTS’ INTERESTS ALWAYS COME FIRST.
2. OUR ASSETS ARE OUR PEOPLE, CAPITAL AND REPUTATION.
3. OUR GOAL IS TO PROVIDE SUPERIOR RETURNS TO OUR SHAREHOLDERS.
4. WE TAKE GREAT PRIDE IN THE PROFESSIONAL QUALITY OF OUR WORK.
5.  WE STRESS CREATIVITY AND IMAGINATION IN EVERYTHING WE DO.
6. WE MAKE AN UNUSUAL EFFORT TO IDENTIFY AND RECRUIT THE VERY BEST PERSON FOR EVERY JOB.
7. WE OFFER OUR PEOPLE THE OPPORTUNITY TO MOVE AHEAD MORE RAPIDLY THAN IS POSSIBLE AT MOST OTHER PLACES.
8. WE STRESS TEAMWORK IN EVERYTHING WE DO.
9. THE DEDICATION OF OUR PEOPLE TO THE FIRM AND THE INTENSE EFFORT THEY GIVE THEIR JOBS ARE GREATER THAN ONE FINDS IN MOST OTHER ORGANIZATIONS.
10. WE CONSIDER OUR SIZE AN ASSET THAT WE TRY HARD TO PRESERVE.
11. WE CONSTANTLY STRIVE TO ANTICIPATE THE RAPIDLY CHANGING NEEDS OF OUR CLIENTS AND TO DEVELOP NEW SERVICES TO MEET THOSE NEEDS.
12. INTEGRITY AND HONESTY ARE AT THE HEART OF OUR BUSINESS.
13. OUR BUSINESS IS HIGHLY COMPETITIVE, AND WE AGGRESSIVELY SEEK TO EXPAND OUR CLIENT RELATIONSHIPS.
14. WE REGULARLY RECEIVE CONFIDENTIAL INFORMATION AS PART OF OUR NORMAL CLIENT RELATIONSHIPS.

As can be Seen from the above principles Goldman Sachs is mainly looking forward to having honest, competent and Efficient individuals. It is only with such individuals that the organization can hope to achive excellence. Also, as seen from the principles laid above Goldman Sachs expects it's employees to be the best thereby behaving as Theory Y Managers.

Organizational Structure and Top Management:

The above structure shows the Top Management and the lays down the different departments involved. It also shows the chain of command existing in the organization. Also, as can be seen from the structure it is a tall organization as there are a lot of departments involved and therefore it requires a lot of coordination and exchange of information between the departments. Also, the model followed here is that of Specialization coupled with Decentralization of command. Because, in such an organization one single person cannot be expected to know everything. And because of the inherent risk of money involved each and every employee needs to be monitored and accounted for, this brings in the decentralization of command to better track the employees.
It has a 32,400 strong workforce spread out all over the world.

Awards and Recognition:

• Ranked 33 in FORTUNE-100 Best Companies to Work For in 2012 and included on the list every year since inception.
• Ranked 39 in The World's Most Admired Companies, March 2012
• Barron's Listed it as one of The World's Most Respected Companies in February 2011 
• Working Mother listed it under 100 Best Companies for Working Mothers in September 2011 
• In June 2011 The Sunday Times listed it under 25 Best Big Companies to Work For 
• Human Rights Campaign Corporate Equality Award (2012)
• Innovation Award for Workplace Equality from the Human Rights Campaign Foundation (2011)
• Human Rights Campaign’s Best Places to Work in Banking and Financial Services (2004-2012) 
• Human Rights Campaign's Corporate Equality Index—Rating of 100% (2004-2012) 
• Stonewall Workplace Equality Index: Britain’s Top Employers for LGBT professionals—Ranked #6 overall and #1 Investment Bank (2012) 
• Securities Industry and Financial Markets Association’s Diversity Leadership Award (2011, 2009, 2006) 
• Working Mother Magazine’s Best Companies for Multicultural Women (2009 - 2011) 
• Working Mother Magazine's 100 Best Companies for Working Mothers (2005-2011) 
• ACE Golden Key Award from the Utah Governor’s Committee (2011) 
• Charity Times’s Corporate Social Responsibility Project of the Year Award (2011)

And many more....

The Monks

"It's easy to come up with new ideas; the hard part is letting go of what worked for you two years ago, but will soon be out of date."

— Roger von Oech

You must be wondering as to why is the title monks for a blog on Organization management. You'll get the answers to the same by the time you reach the end of the blog. Below is the video of 3 monks on which this blog is based.

As can be seen in the above video the main problem faced by them was water. Someone had to go down the mountain to fetch water and none were ready to do it. So the team work required was missing. Again, we are back to team work, I started the blogging with Tower building and till now team work seems to be the crux of every blog I've written so far, looks like team work is the crux of organizational management as well and nothing can be accomplished without it.
Let's have a look at the method employed by the monks to fetch the water up to the monastery.

1. One monk carries 2 buckets of water at a time and takes it to the monastery.
2. Two monks share the load of a single bucket of water.
3. The use of pulley system to fetch the water in which all 3 monks are involved.

The comparison of all the above mentioned techniques is shown in the below table.

	Method 1	Method 2	Method 3
Method 1 Description:One monk carries 2 buckets of water at a time and takes it to the monastery.	−	Method 1 is more efficient as more work can be done in the same amount of time since each monk would be carrying two buckets of water each. So from an organizations point of view this is very productive.	Mthod 3 is the best method because it is a mix of both method 1 and 2 and the output os better than both the methods. Only one monk has to go down the hill to fill the water while the other monk operates the pulley and the third transports the water from the pulley to the storing tank. This way lesser energy is consumed to get the buckets of water and the work gets equally divided among all the monks.
Method 2: Description:Two monks share the load of a single bucket of water.	Method 2 is better than method 1 because here load sharing happens and neither of the monks feels that he has to do more work than the other. This is the principle we had looked at in the human tower example as well.	−	Mthod 3 is the best method because it is a mix of both method 1 and 2 and the output os better than both the methods. Only one monk has to go down the hill to fill the water while the other monk operates the pulley and the third transports the water from the pulley to the storing tank. This way lesser energy is consumed to get the buckets of water and the work gets equally divided among all the monks.
Method 3: The use of pulley system to fetch the water in which all 3 monks are involved.	Mthod 3 is the best method because it is a mix of both method 1 and 2 and the output os better than both the methods. Only one monk has to go down the hill to fill the water while the other monk operates the pulley and the third transports the water from the pulley to the storing tank. This way lesser energy is consumed to get the buckets of water and the work gets equally divided among all the monks.	Mthod 3 is the best method because it is a mix of both method 1 and 2 and the output os better than both the methods. Only one monk has to go down the hill to fill the water while the other monk operates the pulley and the third transports the water from the pulley to the storing tank. This way lesser energy is consumed to get the buckets of water and the work gets equally divided among all the monks.	−

As can be seen from the above table method 3 is the best. But the method 3 didn't happen immediately, there was a transition from method 1 to 2 and then 3 i.e. the innovation was continuous and not a drastic one. The same thing has to be done in an organisation as well, innovation should be a continuous process else the organization will come to a standstill and will not grow any further. We can see this in the video as well when two monks try to lift the bucket filled with water the bucket keeps sliding over to one side or the other increasing the load on that monk, then they take a scale and tie the bucket firmly in the center to distribute the weight equally. This is continuous innovation while the pulley system is drastic innovation as that can be used throughout the society i.e. despite the fact that it helped solve the water problem for monks the innovation can be used in a lot of other places throughout the world. In organizational terms we can term Toyota's Just In Time delivery model as a drastic innovation as it can be used in all manufacturing fields and is not limited to just the automotive sector and the learning method employed by Khan Academy.

What is required from us as managers is that we carry on with these continuous innovations till one of them transforms into a drastic innovation.

The Lord of the RINGS

"Once we rid ourselves of traditional thinking we can get on with creating the future."

— James Bertrand

Ring Toy

What do we have to do?

This is the million dollar question that all of us have all the time. This is where a manager is very important, he should be able to identify the problem first i.e. what is to be done. Most of the managers generally get this wrong. In this toy I am expected to remove the ring from the toy.

How do you remove the ring?

It might look complicated but the solution is actually very simple. The steps for removing the ring from the toy are listed below:

1. Push the ring up, above the slit in the toy.
2. Holding the ring up take one of the hanging wooden blocks and pass it through the slit onto the other side of the toy.
3. Pull the block which pushed onto the other side down, the ball for the same would be near the slit.
4. Pull the ring down below the ball.
5. Take the ring up and pass it through the slit from the direction opposite to the side having the ball. And  WALLA the ring can be removed from the other side.

As I said the solution was very simple while some of us were thinking about untying the ropes around the wooden block to remove the block system first and thereby the ring.

To put the ring back into the setup, the process would be the exact opposite of the one done before. The steps for this are listed below:

1. Pass the ball through the ring.
2. Tilt the ring and pass it through the slit.
3. Pull the ring up above the slit.
4. Remove the wooden plank, hanging on the same side of the other one but not having a ball along with it, through the slit.
5. Let go of the ring.

This will restore the setup to the same way as it was when we had initially started with it. So as was seen in this setup always the solutions to problems are simple. It's we who complicate things. Every problem can be solved creatively, this can be seen in the video attached below.

In the above video Costello successfully and creatively convinces Bud Abbott to agree that 7 * 13 =28. This is creative thinking.

Missioning towards the Vision

We know what we are, but know not what we may be.

~ William Shakespeare

Vision: It is the ultimate goal, something that is presumed to be impossible to achieve.

This is what defines a company and takes it forward. It is this which drives every person to do things otherwise thought impossible. One of our great freedom fighters once said, "Give me blood and I will give you freedom". This statement alone led more than a million Indians to fight for my our country, 'India'!!!!. This one statement drives people to work harder and harder everytime. So all in all this is driving force behind the success or failure of a company.

Mission:  It guides the actions of the organization, and provides a path to achieve it's Vision. It tells the employees what to do and how to do. Not just employees any customer can also infer what the company does just from this statement.

Let's consider the vision and mission statements of a company to understand this point better.

Reliance

Vision:To be a globally respected wealth creator with an emphasis on customer care and a culture of good corporate governance.

Mission:To create and nurture a world-class, high performance environment aimed at delighting our customers.

The vision statement of Reliance clearly shows that they want to become a wealth creator and be recognized throughout the world for it in short they want to be the best in the industry so that they are the only ones the world would look upto in terms of creating wealth.


Their Mission tells it's employees what is expected from their side to achieve the mission i.e. delighting the customers through providing high performance environment for their customers. As can be seen from both of the above statements they are expected to be small and concise.

Hawthorne Effect

This effect says that any individual when put in the spotlight would perform well or any individual once he realizes he's been chosen to do something special will perform well. So what matters more from the productivity point of view is that the managers need to make their employees be felt special. It's only then the productivity of the company improves because the employees would feel motivated enough to work hard.

LE04&05

Humangous Tower

IM19 Class Excercise

FYI, the above is not an act of photoshop. This is something that actually happened in my class.
You guys must be pitying the guy at the bottom right?

Well, that's the whole point of this exercise and it's to show that the weight is divided equally among all the people. The purpose of this exercise?????????

The purpose is to show that even in an organization the weight is similarly divided among everyone equally. So all those times I used to see my friends cribbing over a lot of work at office, it seems there managers weren't effective enough and didn't distribute the work equally among everyone. This is the primary reason why most employees quit because of stress and huge workload while some others enjoy. So clearly for an organization to succeed a manager needs to be good and should be able to analyse the amount of work to be given to each and everyone. Also, one more thing that can be seen from the above pic is that if one of the guys at the bottom falters then the ones above him would fall.So here's where comes the team work, if one fails then the whole project will fail. So it's necessary that the whole unit works together as a team.

Another critical point as observed from the above pic is that if the bottommost guy falters then the whole tower will fall. And this, we have all experienced numerous times in Manufacturing plants or any poroduction unit during strikes the whole company comes to a standstill. Here the workers or labourers form the bottommost part of the pyramid.

Now comes the main point TEAMWORK.
Quoting Michael Jordan,"Talent wins games, but teamwork and intelligence wins championships."


The picture alongside shows three guys holding a pole and walking. The purpose of this exercise is that they are eventually required to cross a valley(imaginary) one here.
How will they accomplish this?
The answer for this has already been mentioned, TEAMWORK.

The process for the same has been shown below:

As can be seen in the diagram alongside, while one person is crossing the valley the other two have to support him. For doing this successfully what is important is a that there should be atleast 3 people and the distance between them should be greater than the distance of the valley they are expected to cross.

During my High School, I was told about a couple of my seniors who exhibited the same attribute as is shown in the diagram alongside. There were 4 best friends and after their engineering each of them wanted to pursue higher studies but none had enough money to finance one on their own so they all decided to work for some time and then go one by one i.e. one of them went abroad from the money saved by all of them initially and while he was pursuing his masters the other three worked and sent one more guy abroad with the money saved between them. Now the other two who were working in India also went after a while with the money they had and the money from the first guy who had finished his graduation and started earning abroad. So this way each of them helped each other succeed. Now, this was the incident narrated to me by my teacher. I'm not sure about the authenticity of the data but nonetheless I want to believe it to be true.

The above task portrayed some more points:

1. The execution of the task has to be laid down clearly so that they execute it well.
2. Everyone was not limited to one role, rather they were expected to be adept in performing all the roles.
3. Proper training has to be given so that they are competent enough to handle the task. 
4. Interdependence in the team i.e. every person in the team relies on the other to finish the job properly.
5. And as discussed at the beginning of this blog this shows the distribution of load as well.

Thus, for the success of any organization Team work is of utmost importance along with a good manager who knows how to distribute the load so that no one feels overloaded.

Khan Academy

 "Education is the most powerful weapon which you can use to change the world"-Nelson Mandela

Today, I'll be writing about a very innovative organisation, something that can truly change the world. An organisation by Salman Khan.

Wait...... before you guys start thinking of this guy

It's not him, this has been started by the guy below

 

Salman Khan is a Bangladeshi American educator, from MIT and Harvard, running Khan Academy which is a non profit educational organisation.

For a better idea have a look at the below video

http://www.youtube.com/watch?v=nTFEUsudhfs

Vision

As can be seen from the video the vision of Khan Academy is to have a world when anyone from any part of the world can gain knowledge as long as he has a computer as cited by him in the example of a kolkata boy who has to work all day long and doesn't get the time to get to school or a person feels oo old to go back to school.

Mission

To raise the level of education and ensure that it's reach is available to anyone and everyone.

This can be inferred when he talks about the number of modules increasing and kids trying to learn more to gain badges. Thereby, the competition would increase and the bar would only go higher leading to innovation in future.

Conceptual, Human and Technical Skills

In the video when Bill gates questions Salman about the merit badges and such to motivate the kids he says he leaves it all to the technical team and he's just responsible for the videos and coming up with the concepts and ideas, in this case, the offering of merit badges. This is where we can see the essence of what is required of a manager, conceptual skills with very little technical skills as portrayed by Salman, while the technical team needs more of technical skills than conceptual ones. And with both of these human skills are equally important for all of them, be it managers or technicians.

Organisation

Also the Education System would undergo a drastic change as the students would be able to learn things while sitting at home so when they go to the classrooms the teachers could directly start with the applications of the fundamentals and solve problems. Also, with the software used to provide the data about the students progress and the problems faced by them the teachers could use their classroom time effectively by helping the students having issues with their concepts.

A more drastic approach could be that educational institutes can be completely phased out as well and the students would then be required only to attend tests and exams. This could even help bring the present price hefty education system back on ground. The only problem with this though could be the socializing factor might be removed from the development of kids. Despite all of this considering that the world illiteracy rate is 16.3% this would be a lifesaver, especially in countries like India. This problem of illiteracy is very well depicted in the below video and the image.

https://www.youtube.com/watch?v=Qy0IAt6mvqo

Business Model

Providing education online completely all the data can be shared with the parents of the kid as well immediately i.e. as and when their tests are logged their parents can monitor the data. Making it online would even reduce the infrastructure cost incurred on the building which could be used as play-areas for children. And most importantly voluntary contributions made by people... no voluntary contribution made by you... me  can help provide more and more knowledge on the internet and the overall education cost of the system would reduce. Going back to the very first phrase I had stated at the beginning of this blog, once this education is available to everyone the world might not be limited to earth and earthlings alone, but it could extend way beyond our solar system as well. I truly believe that such a day will come when every human on earth won't feel handicapped because of lack of education.

Creative Problem Solving

As we saw in the video of Salman Khan, the reason he started with it was because he wanted to explain something to his nephews and therefore uploaded a video on youtube, from which they were able to grasp the concepts because it could be played and paused again and again till they understood the concept, something that cannot happen in an actual class room discussion. After observing this Khan came with the idea of providing the entire educational system online so that kids could learn things at their own pace. This approach of Khan of creating a video to help his nephews understand the concepts can be referred to as Creative Problem Solving. And this approach could very well be the single most defining moment in the history of education in the years to come.

Strategy Of Khan Foundation

This is one of the most unique selling points about this. Allowing teachers to give inputs on what kinds of softwares need  to be designed to monitor the progress of kids and assigning them work. By doing this they are capitalizing on the already existing veterans in the field and making them come up with the requirements. Also, by slowly capitalizing on one institute at a time and with Ted as a platform they are showcasing their projects to improve their chances of expansion faster. Although portrayed as a nonprofit organization right now, with time and with increasing numbers adopting this, it can generate revenue by way of advertisements as well.

Entrepreneurship

As Salman rightly says in the video, "If Newton had the technology to create videos like this than science would have become much simpler". This idea of his to take the educational videos online could well change the whole world. And the fact that he left a plum Hedge Fund job for it truly embodies an entrepreneur in him.

Looking at Salman, who had a very good paying job, becoming an entrepreneur I feel we should try the same as well. Only with this attitude can we truly achieve Excellence.