Assignment:
A Conscience at Goldman Sachs?
"It makes me ill how callously people still talk about ripping off clients," mid level Goldman Sachs executive Greg Smith wrote in The New York Times as he was resigning from the firm in 2012. Smith's commentary, "Why I Am Leaving Goldman Sachs," claimed that the Goldman Sachs culture had become "toxic," and that the "interests of the client continue to be sidelined in the way the firm operates and thinks about making money." Smith, 33, a Stanford graduate and finalist for a Rhodes scholarship, wrote that he was once proud of Goldman Sachs's culture of teamwork, integrity, humility, and concern for clients, but that spirit, he said, had been lost. Goldman Sachs says that regular employee feedback contradicts Smith's characterizations. Critics say Smith was angry because he had been denied a promotion and raise prior to his departure. Others simply saw Smith as naïve.
One Goldman client told The New York Times that the company had traded against its clients for years. "Come on, that is what they do and they are good traders, so I do business with them." And a Bloomberg editorial satirized Smith's view that the firm was too concerned about making money: If you want to dedicate your life to serving humanity, do not go to work for Goldman Sachs. That's not its function, and it never will be. Go to work for Goldman Sachs if you wish to work hard and get paid more than you deserve even so.
Questions
1. A friend of Smith's characterized his resignation and public condemnation of Goldman Sachs as the "ultimate act of loyalty." What did he mean?
2. a. What did Smith mean when he spoke of Goldman Sachs's "culture"?
b. In seeking a job after graduation, will you be looking for a company whose "culture" matches your values? Explain.
c. Do you think you would give up the approximately $500,000 per year that Smith reportedly was making because your employer's culture was not consistent with your values? Explain.
3. a. Should Goldman Sachs's purpose be service to humanity.
b. Would that approach work in the marketplace? Explain.