ORGANIZATIONAL STRUCTURE DESIGN

 WHAT IS AN ORGANIZATIONAL STRUCTURE? 

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Organizational Structure in the simple words, refers to a system in which the work tasks are distributed among various positions in the company's hierarchy describing how subordinates will report their duties and responsibilities to their seniors? The major benefit of working under organizational structure system is that it enable the groups to collaborate to accompolish the shared goals and vision.

Company of Interest: Goldman Sachs 

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The typical organizational structure (structural hierarchy) that Goldman Sachs and many investment banks follow include: (In ascending order)

Analysts (at the entry level)

Associates ( report to Vice-presidents)

Vice-Presidents (report to Senior Vice-presidents)

Senior Vice Presidents (report to managing directors)

Managing Directors (report to COO, CFO, CSO)

Chief Operations Officer, Chief Financial Officer, Chief Strategy Officer (report to CEO)

CEO 

Some would say about Partners? Partners usually own a piece of equity in the company and are responsible for bringing clients to the firm.

And Again, there are multiple number of divisions inside Goldman Sachs such as Investment banking, Asset Management, Wealth Management, Risk Advisory etc...

So combined total of around 130 top executives are responsible for overseeing the investment bank's four different units ensuring transparent authority and reporting in the business.

EXTERNAL ENVIRONMENTAL ANALYSIS

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In the investment banking world, Goldman Sachs tops the list by being the most influencial investment corporation in the world. And it is no brainer, how effective and efficient they are in executing their decisions. If we fall some light on their external environmental analysis, they have one of the most hardworking and brilliant minds to assess and predict the future risks and uncertainities. And, this is through their extravagant teamwork that they have expanded their horizons not only in a certain direction but also in Technology, Finance, Human Resources and many more. We will figure out their areas of operation and decision making by using PESTEL analysis.

PESTEL Analysis

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Political Factors--- Rendering strong decisions to create high political stability and certainity and actively taking quick actions to adapt with the changing policies and reset strategic priorties accordingly. They promote a transparent governance structure to enforce law regulations and tax policy, that makes them to re-invest the money towards innovation, and research and development.

Economic Factors--- The economic factors consist of their efficiency in the financial markets, reviewing their economic growth rate, Inflation, Exchange and Interest rate, Industry lifecycle stage and demand and supply of quality labour.

Social factors--- As Social factors represent key demographic characteristics, social values and norms, these are highly linked with Consumption behaviour, Rising proportion of young working population, Social equality, diversity, cultural and societal norms and of course Gender inclusiveness.

Technlogical factors--- Goldman's technological development pace is accelerating and under these factors, technological infrastructure, technological innovations such as investment in automation technologies that not reduce the company cost but also optimize user experience, operational efficiency and adopt a futuristic approach towards investment.

Environmental factors--- Increased vigilance towards sustainability and environment protection, supporting the use of renewable technologies, recycling, optimum resource utilization to reduce environmental cost and production cost.

Legal factors--- Goldman is very specific about their legal frameworks such as strictly complying with employment laws, intellectual property laws, and consumer protection laws that gives right to attract top talents and inculcating equality, equity and inclusion in potential business aspects.

Since, Goldman Sachs is a financial entity, I believe its economic factors have the biggest impact on its external environmental factors.

INTERNAL ENVIRONMENTAL ANALYSIS

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For Goldman Sachs to achieve a high market share, the firm has developed an intenal structure on its operations to achieve success. The success revolves on the nature of its internal environement, which again is reliant on some core factors that have the biggest impact on organizational structure.

Job Characteristics and Working conditions: There is no doubt that Investment banking and finance is considered one of the most stressful careers in the world, due to their hectic 80-100 hours week work culture, and Goldman is actually considered as the workaholic firm across the wall street. But apart from it, Goldman Sachs focus on investing in their people through utmost collaboration, teamwork and highly inclusive working conditions.

Organizational tasks and Goals: Goldman Sachs regualarly works to provide the best compensation practices to their employees, for which they demand to receive superior results for their shareholders and long-term profitability of the firm and their client. Most of the organizational goals are to excel in multi-year financial planning process and improve existing businesses and build new ones, delivering value.

Career progress and Growth cycle : Because, Investment banking is a compensation+bonus job, so employees are always considered on the basis of their job performance and seniority. On an average, it has been seen that Goldman Sachs promotes an employee after three and half years for an entry level job. For the senior level position, it depends on the years of experience, performance and leadership skills.

Other than that, Open Communication, Inclusiveness, Investment in employee and adaptability have always been their strong sides.

IDEAL STRUCTURE FOR THE ORGANIZATION

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I believe a "Matrix Organizational Structure" will be most beneficial for a bank like Goldman Sachs that follow a hierarchy of bosses and multiple steps of reporting. This is beneficial because, this way the company would have more flexibility, more balanced decision making, more idea generation and better teamwork and collaboration terms. This way an employee feels more connected and motivated for his/her job and gets constant feedback to reduce the chances of on-site mistakes. I personally think this method of organizational structure also provides an openess to grow, prosper and know more about the working conditions in other departments and geographical entities, because, investment bankers tend to travel a lot, make presentations for their institutional clients and always work in a team that infuences cross-collaborative effort for communication. Perhaps, this method structure fits well with the elements of  external and internal analysis as there are multiple people above us under whom's monitoring and strong assistance our projects and tasks become even more graceful.

REFERENCES

Organimi. (2021, October 28). Goldman Sach's Organizational Structure [Interactive Chart] | Organimi. https://www.organimi.com/organizational-structures/goldman-sachs/

PESTEL Analysis Of Goldman Sachs Group. (n.d.). EssayPandas. https://www.essaypandas.com/essay/Goldman-Sachs-Group-12681-Pestel-Analysis

Goldman Sachs. (n.d.). Goldman Sachs. https://www.goldmansachs.com/

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