Thursday, 07 December 2017 13:31

Goldman Sachs Group Featured

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Introduction

Goldman Sachs Group is an investment banking, management and security firm. In 2013, Goldman Sachs Group was ranked position 68, in Fortune 500 companies. The position was a rise from its position 80 in 2012.   Lloyd Blankfein is the CEO of the company. Goldman Sachs has been faced with numerous ethical issues despite its exceptional performance.  Critics argue that the company has been deceiving stakeholders into making disastrous business decision. Unfortunately, the shareholders/stakeholders are the only losers as the company reaps profits.

Body

Briton Ryle (2013) writes the article “how corrupt is Goldman Sachs. Ryle (2013) highlights how the company and its executives lack moral and ethical practices.  Ryle (2013) discusses Goldman Sachs misadvise to its clients. Goldman advised its clients to sell their Heinz shares because stock trading would weaken. At that time, plans were underway for 3G capital (Warren Buffet) to buy out Heinz. Unfortunately, Goldman’s advice to its client turned out to be a disastrous move as Heinz shares shot up by 20% after the buy-out. It later emerged that Goldman’s own traders had been purchasing the shares that clients had been selling. Goldman Sachs Group thus made profits at the expenses of its unsuspecting clients. This case is one of the numerous unethical practices that Goldman Group has been practicing.

Ryle, (2013) points out to the 2010 case, which saw Goldman’s fined over $550 million for misleading investors to purchase mortgage investments that were doomed for failure. Other cases of misleading clients had been reported in 1998, 2008 and 2009. It is evident that Goldman’s continued success and financial growth are through dubious means. According to Ryle (2013) Goldman would” sell their own parents if it meant they could put some bucks in their pockets” it is evident that the leadership at Goldman does not emphasize on ethical leadership behavior. Its clients make losses due to the poor financial advice from Goldman.

The tendency by the leadership at Goldman to mislead its clients has affected the company’s productivity.  Clients are gradually losing the trust in Goldman. The loss of trust is not baseless as there are more than two incidences in which Goldman’s clients made losses because of advice from Goldman. Goldman is an investment bank, meaning that its productivity is determined by funds brought by investors. The continued unethical behavior tarnishes the image of the company (Jensen, 2012). With a tarnished image, investors will shy away from Goldman and seek alternative investment institutions. Goldman’s culture is currently defined, by its tendency to rip off people. Goldman also comes off as an organization that is determined to maximize its profits from its clients, rather than establish a financial plan that would benefit the client and the investment bank

Conclusion

There is an evident decline in the ethical and moral standards of Goldman Sachs. The leadership at Goldman needs to go back to the drawing board and establish effective ways to rebuild its trust with its clients. The existence of Goldman group is dependent on the clients it can capture.  The company needs to prove that it engages in business practices that are beneficial to the organization.   The executive at Goldman Sachs needs to be at the fore-front of ensuring that the company adopts genuine means to make profits.

Reference

Jensen, K. (2012). Rebuilding the trust. Forbes

Ryle, B. (2013). How corrupt is Goldman Sachs. Wealth daily. Retrieved from http://www.wealthdaily.com/articles/how-corrupt-is-goldman-sachs/3994 7th February 2014

Janet Peter is the Managing Director of FastCustomWriting.Com a globally competitive custom essay writing company  which is the premiere provider of Essay Writing Services, Research Paper Writing Services at Term Paper Writing Services at very affordable cost. For 9 years, she has helped a number of students in different academic subjects.

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