1.

0 Introduction:
What is Organisational behaviour?

According to Stephen P and Timothy A (2007), Organizational Behaviour is the study

which enables an organisation to examine the impact of individual, groups and
structure’s behaviour within an organisation. The implementation of such knowledge
will eventually improve an organisation’s effectiveness.

Organizational behaviour is a field of study and this study is actually concerned about
three determinants of behaviour in an organization. Which are :

• Individual
• Groups
• Structure

Moreover organizational behaviour helps manager to gain knowledge about

Individual, Groups and the effect of structure on behaviour and to apply that
knowledge into practice.

Organizational Behaviour encompasses a wide range of topics. Although there is still

some dispute regarding the importance of each topics, there appears to be general
agreement that OB includes the core topics of motivation, leader behaviour and
power, inter-personal communication, group structure and processes, conflict, work
design and work stress.

From the above discussion, it can be said that OB is concerned with the study and
understanding of individual and group behaviour in an organization and how their
behaviour influence the overall performance of an organization.

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1.1 Objective:
This report is created as an academic requirement of the “Organisational Behaviour”
course. It has been prepared to meet the requirement of formal report preparation part
that demands the analysis of a various issues of Organisational Behaviour within an
organization

Objectives of the assignment are:

• Find out the Organisational Behaviour issues of my chosen organisation

(Goldman Sachs)
• In what extent Goldman Sachs are using organisational Behaviour isuues.
• How Goldman Sachs applying OB issues.

Goldman Sachs Group

2.0 Company Overview:
The Goldman Sachs Group (Goldman Sachs or the company) is one of the leading
financial services company in the world. The company together with its subsidiaries
provides investment banking, securities and investment management services to
corporations, financial institutions, governments and high net worth individual’s
worldwide. The company primarily operates in the US, Europe and Asia. The
company has its headquarter based in New York city, New York and employs 30067
people. (Goldman Sachs Group by Datamonitor, Publication Date: 4th May 2009).

The company started its operation in 1869, was successful in all businesses it operate.
Even in the recession they have performed quite well, which results huge profit. The
secret behind this success could be Goldman Sach’s enriched culture.

"Our firm's culture is the most sustainable competitive advantage that we have. I also
believe that we have the best people, but the magic is the combination of outstanding
people and a strong culture," said Bill Buckley, Former Managing Director and
Former Co-Head, Private Client Services, GS.(ref: Ch, Lisa, "Goldman Sachs: The
Culture of Success," Touchstone, 2000.)

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2.1 About the company:
In 1869 the man called Marcus Goldman moves to New York city and starts trading
promissory notes. In 1882 Samuel Sachs, son in law of Goldman joins the business. In
1896 for the very first time the company became listed in the New York Stock
Exchange. Goldman sachs managed to offer its first IPO (initial public offer) in 1906.

In 1930s the firm became the leader in banking reforms and corporate governance
issues. In addition to that GS also became a leader in the equities markets through its
innovations in block trading and risk arbitrage.

In 1982 London based First Dallas Ltd is acquired. In 1999 the company goes public
and adopts the name The Goldman Sachs Group Inc. In 2002 Subsidiary Goldman,
Sachs & Co. becomes one of the largest market makers in the industry.
(ref:http://www.fundinguniverse.com/company-histories/The-Goldman-Sachs-Group-
Inc-Company-History.html).

3.0 ORGANISATIONAL STRUCTURE

Organization which is made up of more than one person need some kind of
organisational structure . An organizational structure defines how an organization’s
jod tasks are formally divided.( http://www.thetimes100.co.uk/theory/theory--
organisational-structure--386.php).

There are six key elements that managers need to look at when they draw their
organization’s structure. These are : work specialization, Departmentalization, chain
of command, Span of control, Centralization and decentralization, and Formalization.

Work Specialization:

Work specialization means the level to which an organization’s task are sub divided
into separate jobs ( Stephen P; Timothy A; 2007; P:539)

In early twentieth century Henry ford demonstrated that if employees are specialized
in certain division work can be performed more efficiently.(Stephen P; Timothy A ,

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2007). It is a great way to make human labor compatible with the demand of machine
age by:
• Making each worker’s tasks smaller and smaller. which will make the work
very simple to the workers.
• As employee will be doing the same work again and again they will become
very efficient results high productivity.

But it could be argued that – workers could loose their interest on their job very easily
as they will be doing same job again and again.

Goldman Sachs have divided its business into five different division. These are :

• Advising
• Financing
• Investing
• Securities &
• Reasearch

These way GS can serve its client much better as every division has their specialist
working within that division.

Departmentalization:
Once job has been separated through work specialization, Then organisation needs to
group these jobs together. It will allow the organization to coordinate common tasks.
The basis by which jobs are group together is called Departmentalization.

Jobs can be departmentalised by functions or by the type of product the organizations

produce or on the basis of geography or by particular types of customer that the
organization would like to reach.

Large organizations are tend to use all types of departmentalization. Because

managers in these large organizations believe that complex tasks can be accomplished
by diverse skills.

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Goldman Sachs have various department under single division. As an example GS’s
Finance division consists of Bank loan, Debt financing, Equity capital market,
Lending and Urban investment department.
• Chain of command:
Many years ago the concept ‘chain of command ‘ was the primary foundation in the
structural design of an organization. Now a days it became far less important for the
organization. (C. Hymowitz, 2003))
Chain of command broaden from the top level of the organization to the bottom level
of organization. It is an unbroken line of authority.

It has two principles. The first one is Authority which means that manager has the
right to give order and expect the order to be carried out. On the other hand ‘Unity of
command ‘ refers to the idea that subordinate will have only one superior and to
whom they will be directly responsible.

At Goldman Sachs unity of command is exist. Goldman Sachs have a team based
working environment where employee needs to report to the manager of that team
only.

• Span of control:
It describes how many employees a manger can effectively and efficiently manage. It
is very important to determine what kind of span of control an organization would
maintain. There are two types of span of control: Wider and Narrower.

Wider: It means more employee under the supervision of less managers. It is good for
cost savings but not very effective.
Narrower: Whereas narrower span of control is very effective as there would be small
group of employees under the supervision of one managers. Narrow span of
controlencourage overly tight supervision and discourage employee autonomy.
(Stephen P; Timothy A; 2007).

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Goldman Sachs has narrower span of control. As it has a designated manager for a
small number of team members. This way manager can overlook the work of its
subordinate more effectively.

• Centralization and decentralization:

The term centralization refers that only top management have the authority to make
key decision. Lower level personnel does not have any say on these decision making
process.

On the other hand in the decentralized organization lower level employee can
influence the decision and are actually given the discretion to make decision.
Therefore in a decentralized organization , action can be taken more quickly than that
of centralized organization. Employees in decentralized organization would feel more
motivated as they will be actually involved in decision making process.

Goldman Sachs is a decentralised organization. team members are encouraged to

make decision in certain situation. Goldman Sachs believes this way employee can
practice their leadership skills. Moreover it helps to motivate employees.

• Formalization:

Formalization means - jobs within an organization will be standardized. In a highly

formalized job employee have very little say of how and when things need to be done.
There would be defined work procedure and strict rules in place and employee needs
to follow these procedures and rules all the time. therefore employee can’t choose
another way of doing things which destroys the creativity within the employee.
Goldman Sachs has standard procedure of how work needs to be done, but employee
has the freedom to express their view and take the initiative on their own way.

There are different types of common organizational structure exists. These are:

• Simple Structure: this structure has low degree of departmentalization, wide span
of control, centralized authority and little formalization. That’s why it is quite
flexible, inexpensive to maintain and accountability is clear. But this model can be
used only in small organization.

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• The bureaucracy: Standardization is the key concept of bureaucracy. The
characteristics of this kind of structure are: very formalized, centralized, highly
standardized, narrow spans of control, highly routine operating tasks achieved
through specialization.

• Matrix Structure: Matrix structure is a type of management system where

employees report to more than one supervisor. Therefore matrix has dual chain of
command. This structure brought together different types of expertise for
particular project. The strength of this type of structure is- it facilitate coordination
when organization have multiple complexity and interdependent activity, it also
provide efficient allocation of specialists. It has disadvantage too. It creates
confusion as there are two supervisors for the specific project and employees do
not know who to report.

• Team structure: Organization which uses team to coordinate work activities. Team
structure decentralizes decision making to the level of the work team. In a large
organization team structure combines with bureaucracy. This makes company
efficient while give teams the opportunity to be flexible.

The organizational structure of Goldman Sachs is a Team based structure. As it

decentralises decision making and give its employee the power to take decision.
Moreover it has a formalized work structure but in certain situation employee could
work on their own way if that reflect company’s value.

3.1 CULTURE

“An organizational culture is a system of shared meaning held by members that

differentiates the organization from other organizations”.(Stephen P; Timothy A;
2007). The term ‘shared meaning’ refers to- a set of key characteristics that an
organization values. Apparently various research suggests that an organizational
culture basis on seven characteristics. These are:

1. Innovation and risk taking: The degree to which Organization encourages its
employee to take risk and to be creative.

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2. People Orientation: The degree to which Managers consider how people in the
organization would be affected by the decision made by them.
3. Outcome orientation: The degree to which Managers are result oriented and
therefore they are more focused on organization’s result rather than the techniques
that used to achieve the result.
4. Attention to details: The degree to which employees are expected to demonstrate
accuracy, attention to details.
5. Team orientation: the degree to which organization’s work activities are team
based rather than individuals work base.
6. Stability: The degree to which organizational activities give emphasis to
maintain the same condition as organization grows.
7. Aggressiveness: The degree to which employees are aggressive and competitive
rather than easygoing.

By looking at this characteristics employee could have an idea what type of

organizational culture they have in their organization.

If an organization have strong culture, its employee’s behaviour are most likely to
influenced by that culture.

Goldman Sachs prized its rich corporate culture. According to Secretary to the board
and former managing director John Rogers:

“Our bankers travel on the same planes as our competitors. We stay in the same
hotels. In a lot of cases we have the same clients as our competition. So when it
comes down to it, it is a combination of execution and culture that makes the
difference between us and other firms. Behaviour is shaped by it. People who think
culture is just a bunch of bacteria in yogurt set a tone that strips values from a
company. That’s why our culture is necessary—it’s the glue that
binds us together. We hold onto the values, symbols and rituals that have guided us
for years,and anything new that we add to the culture always supports what already
exist” (Ref: http://www.marshall.usc.edu/assets/066/14694.pdf).
At GS employee always try harder to improve themselves and make them more
competitive. Goldman employees are known for their collaborative practices. In GS

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employees are taught that odds are high and employees will have better outcomes
with a shared work effort than with that of a single individual.

3.2 INDIVIDUAL PERSONALITY:

According to Gordon Allport personality is “ the dynamic organisation within the

individual of those psychophysical systems that determine his unique adjustments to
his environment”.

Type A personality:

A type A personality individual has sense of time urgency and competitive

characteristics. This type of individual always wants to achieve more in less time .
( Stephen P; Timothy A;2007 ). There are certain characteristics that type A person
has. these are :

1. they are always moving, walking and eating rapidly

2. feel impatient with the rate at which most events take place
3. strive to think or do two or more things at once.
can not cope with leisure time
4. are obsessed with numbers, measuring their success in terms of how many or
how much of everything they acquire.
(Stephen P Timothy A; 2007)
Type B personality:

B personality individual are totally opposite of that of A. the characteristics of B

personality individual includes:

1. Never suffer from a sense of time urgencywith its accompanying impatience.

2. Feel no need to display or discuss either their achievements or
accomplishment unless such exposure is demanded by the situation.
3. play for fun and relaxation, rather than to exhibit their superiority at any cost.
4. can relax without any guilt.

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At Goldman Sachs all the employee has the A type personality. Because GS’s
working environment is a dynamic working environment. Moreover they have given
time limit and target to finish certain task. Therefore GS employee has to have A type
personality to cope up with their organization culture. GS has a personality test
process included in their selection process. This help them to see which individual has
the what type of personality and based on that they select candidates.

3.3 MOTIVATION
Motivation is very important aspect in any individual, group and organisation’s
success. In broad terms, motivation can be considered to comprise an individual’s
effort and persistence and the direction of that effort. In simpler terms, motivation is
the will to perform. ( Ian Brooks 4th edition ).

In an organisation motivated workforce can be recognised by looking at their

characteristics. Employees who are well motivated , perform well consistently,
display lots of energy and always eager to do a bit extra than they are supposed to do
to achieve organization’s goal.

In contrast people who are demotivated are reluctant to work with high absenteeism,
uncooperative, destroy companies asset etc.

Therefore it is very important for organizations to keep their employee motivated as it

brings them success.

Theories of motivation:
There are many different views or theory exists to show what motivates employees.
The most common theories are described below:

Hierarchy of needs theory:

Abraham Maslow’s hierarchy of needs is the most well known theory of motivation.
(A.Maslow, Motivation and Personality; New York: Harper and Row,1954). In this
theory he has explained that five needs of hierarchy is exist within every human
being. These needs are:

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 1. Physiological: Hunger, thirst, shelter, sex and other bodily needs are includes
here.
2. Safety: Security and protection from physical and emotional harm
3. Social: affection, belongingness, acceptance and friendship are part of this
need.
4. Esteem: Self respect, autonomy, achievements, which are internal factor and
status, recognition and attention which are external factors are includes here.
5. Self actualization: Growth, achieving one’s potential and self fulfilment are
includes here.

According to Maslow, organization need to understand what level of hierarchy the

person is actually stands on and organization should focus on that level, so that she
can satisfy that person’s need in that level or level above that.

From the Maslow’s theory It could be argued that his theory did not consider various
people’s psychology and need. everyone does not have same need. people’s need
varies by culture and location. Some people like to have achievement as their top
priority and some people probably consider their growth as top in the hierarchy.

Expectancy Theory:

Expectancy theory is an alternative behaviouralist approaches to motivation. Since

1930 this theory has developed.

An American psychologist named Vroom (1964) developed expectancy theory from

the original work of Tolman and Honzik (1930). Vroom has produced a systematic
explanatory theory of workplace motivation. In this theory he has argued that
motivation should design in such a way that meet an individual’s expectation , which
guide to a particular outcome. The simple expectancy equation is :

Motivation = expectation x valence

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Cognitive theory:
Cognitive theory is quite simple and intuitively appealing. Cognitive theory or Goal
theory tried to explain the fact that – Individual’s performance and motivation would
be higher if individuals are set specific goals which are challenging , but accepted,
and where performance related feedback is given. In the recent time Goal setting
became very popular motivational techniques among the organizations. There are four
ways by which Goals influence individual’s behaviour. These are :

• Direct attention
• Mobilise effort
• Encourage persistence
• Facilitate strategy development

In the light of above theory It could be argued that organization bureaucracy often
make goal setting harder and therefore dissolves the benefits from processes such as
management by objectives (MBO). Moreover Goal setting doesn’t work for every
organization. It is only good for companies where achieving target relates to business
success. Therefore it cant be use as motivational factor for those organization where
goal setting mean nothing.

Porters and Lawler’s Expectancy models:

Porters and Lawler’s has been developed the expectancy model a little further.In
particular they tried to show the relationship between employee satisfaction and
performance.

There are two types of reward which lead by employee performance . these two types
of rewards are : Intrinsic and Extrinsic rewards.

Intrinsic Reward:

Intrinsic reward is intangible. Sense of achievement or advancement , recognition and

enhanced responsibility are the example of intrinsic reward.

Extrinsic Reward:

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Extrinsic rewards are more tangible. It could be pay or working conditions etc.

Lawlers argued that intrinsic rewards are the most effective way to motivate
employees because it is more direct and immediate. (Ian brooks ,4th edition)).
However, it appears that in the modern world effective way to motivate people varies
person to person. Employee who prefers to have big compensation package certainly
will be motivated by extrinsic reward than the extrinsic reward.

At Goldman Sachs’ they have a culture to motivate employees in different ways,

Goldman’s motivational culture made of a blend of most of the motivational theory
discussed above.

Goldman tries to motivate their employee by setting target. Goldman believe that this
increases employee performance as they put their best effort to achieve that target. By
achieving set target employee can see their full potential, which help increase
employee morale. Moreover GS Has a culture to pay their employee a big
compensation package. GS believe this works out the best motivational factor for
employees. In 2009 GS paid out £1.2 billion among its 32500 employees as a bonus.
(source:guardian.co.uk)

3.4 TEAM
There are lots of literature about team and team working. But in general term :

‘A team builds up when a number of people have a common objective and feel that
their individual success depends on other people’s success.’

These merely means that people in a team will contribute their various skills to
achieve different objectives. (Mullins, 2007).

Differences between team and group:

Cane suggests that many organizations are sometimes confused whether they have
teams or a group of people working together. If a group of people do not know that
they are working as a team, that group of people simply not a team.(Mulins 2007)

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According to Belbin there are several factor which actually separate groups from
team. These factors are:

Size:
Groups can be any number of people but team has to be relatively small (ideally) four
to six.

Leadership:
In a well-balanced team leadership can be shared among the individual, on the other
hand large group has only one leader.
From the work of Belbin it is clear that the term team used in a more specific context
whereas group is a more general term.

Importance of a team:
Individual will form a team for a number of reason. These are given below:

Assignments with multiple skills requirement:

team works effectively and efficiently where it require multiple skills to do the job.
Because in a team, individuals have variety of experience and skills.

Collusion between members;

Job sharing or rotating unpopular tasks can be done among the team members. This
will give them a chance to come out from a monotonous working environment.
Moreover it will provide individual team members with opportunities for initiative
and creativity.

Companionship and source of mutual understanding and support from colleagues:

This can help members in a team to solve work problem more quickly and help them
to come out from a stressful work environment.

Membership provides individual with a sense of belonging:

Team provides its member the identity and status. Status motivates team player

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Protection for its membership:
Modern business environment are very complex and competitive. Organization
always possess threats from its competitor. Team members always work together to
protect their interest from outside pressure or threat.

Success of a team:
The more cohesive the team will be the more successful it would be. Success is a big
motivational factor for any individual or team. And it will put a positive impact on the
performance of a team.

Goldman Sachs has a team based working environment. Management at Goldman

Sachs believes that – ‘a major strength and principal reason for the success of
Goldman Sachs is the quality and dedication of our people and the shared sense of
being part of a team.’ The desire and ability to be part of a team is fundamental to
Goldman Sachs culture, business principles and GS believe, their long-term success.
Since the firm's founding in 1869, Goldman Sachs has focused on teamwork rather
than solitary effort. According to John I. Weinberg (Goldman Sachs partner 1956-
1990) :

“ The point is this team thing, the coopearation, teamwork, and our culture was
developed not because someone was a genius and woke up in the middle of the night
when the little electric light popped, it really came from the needs of the moment. it’s
good , solid business, you want to have people working together to achieve an
objective.” (Website:Goldman Sachs )

4.0 CONCLUSION:
Organizational behaviour help organizations to determine their company structure and
culture. Moreover it helps organisation to understand the importance of individual’s
personality, necessity of a team within an organization, motivational factors etc.

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At Goldman Sachs they have developed a rich culture where team spirit is the
number 1 priority. This team based structure worked quite well for GS. However GS
needs to remind that there are few drawback in team based structure which might
causes problem in the future.

Goldman Sachs have various ways to motivate its employees. However the
motivation system probably is not working properly. As a result there is high
employee turnover exists in Goldman Sachs.

Therefore it is very important for Goldman Sachs to keep a very good balance of
these organizational behavioural factors.

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