The Federal Reserve and Goldman Sachs

The Federal Reserve and Goldman Sachs

Cody Eller

MBA 612 Dr. T

October 12, 2016

DeVos Graduate School of Management

Protagonist: Mike Silva

Main Issue: The main issue regarding the Goldman Sachs case is the fact that according to Segarra, there are no set conflict of interest policies that meet NY Fed regulations.

Sub-elements of the Main Issue: 

• Are Goldman Sachs employee’s opposed to change?
• Does Segarra’s personality and previous unsuccessful employments with Goldman Sachs influence her?
• Are there incentives in place for disagreeing and forcing debate?

I analyzed this situation using leadership style, motivation, and culture. I used these concepts because it appears Silva and Segarra have contrasting leadership styles, motivations, and cultures. In order for a successful conflict of interest policy to be in place, there must be a strong leadership back bone to get the ball rolling and act on the policy.

As stated, Beim recommended giving officers incentives for disagreeing with peers and allowing for confrontation, but is the policy being acted upon? Are the incentives internal or external motivators? Having this policy in place will allow for more employee’s to begin to see the big picture and adapt to a changing environment.

Finally, culture plays a big role in this as well. Segarra’s experiences and background differ from Silva’s and the senior management at Goldman Sachs.  These contrasting approaches and ways of life influence their decision making, resulting in differing thoughts. Ultimately, is Segarra trying to change the culture of Goldman Sachs as opposed to adapting?

When acted upon together, using leadership, motivation, and culture Silva will be able to use the necessary information presented to make a valid decision as to what course of action to take.

Analysis

Analytical Point #1: It may be that the leadership styles at Goldman Sachs stray away from a changing environment.

In a consistently changing environment, it may be that Segarra is not able to get through to the senior management because of their lack of flexibility in change. The management style at Goldman Sachs appears to be laissez-faire, or laid back and everyone does their own thing. They appear to be opposed to change, which hinders the company’s ability to excel. When it comes to the conflict of interest policy, the senior management is showing signs of lacking change by pushing Segarra away and questioning her every move.

It is clear to see the leadership styles of Silva and Segarra are contrasting. The way Segarra conducts herself worries Silva, and the fact that it may disrupt his division’s relationship with Goldman Sachs. It appears as if Segarra is a theory Y style, meaning she likes to include everyone in the process and gather as much information as she can. On the other hand Silva and the senior management appear to be theory X, meaning the power is retained and all decisions are made by a single person(s) without gathering ideas from peers.

These contrasting leadership styles only fuel the fire, since the senior management and Silva appear to be stuck in their old ways. Segarra has to motivate Silva to implement a new conflict of interest policy without upsetting him or the senior management.

Analytical Point #2: It may be that the motivation for change is lacking.

The best way to adapt change is by finding what triggers people to allow it. In this case, Goldman Sachs needs to find intrinsic or extrinsic motivators to help push the process along. Beim, in his list of recommendations, stated using an incentive program for those who think outside of the box and open their minds to discussion. This is a great start, but is the policy being applied? What kind of incentives should be in place to influence employee’s to want change? It is crucial to find what motivates employees and how they can better help the company adapt to change.

Silva is having a hard time understanding Segarra’s means of motivation. As stated in the article, Silva believed Segarra’s potential motivation could be the fact she applied several times for a job at Goldman Sachs and was unsuccessful each time. In this particular case, Silva is drawing conclusions about Segarra’s intentions without knowing all of the information. This process is known as the Ladder of Inference (Thomas). When Silva jumps the ladder, he begins to develop conclusions about Segarra’s intentions which tarnishes her influence on the situation.

Analytical Point #3: It may be that the Segarra does not fit into the culture of Goldman Sachs.

Since Segarra was hired in 2011, she has continuously been a thorn in the side of Silva. To Silva and the senior management, Segarra comes off as pushy and her tone of voice causes miscommunication and diminishes her intents. The culture of Goldman Sachs appears to be very old school, they continue to ride on the thought that we have been successful thus far, so why change anything? It seems as if Segarra coming in and causing an uproar is putting tension on the relationship of Silva and the senior management. Silva is impressed with the skills of Segarra, but wants her to be more mindful of the situation.