Goldman Sachs Banks on Cultural Capital

A healthy organizational culture can be done with two different strategies. The first strategy being an action plan for developing a company that gives back to the employees. A good company understands the importance of building a positive morale and disposition among the staff. Regions Bank has developed a "team works" incentive plan that rewards good sales behaviors for the branches. This has given the employees an opportunity to not only make a base salary, but reap rewards for attainable quarterly sales goals as well. When an employee takes control of their production it gives a sense of ownership to the staff member to take pride in their company and help them develop on a larger basis.

The financial industry had gone to several crises through the decades. Around 2008, Alex Preston notice that the investments banking industry was in a crisis. Big banks were closing its doors or selling out to other companies. As it was the case of the National City Corp.; the first ever American’s mortgage maker had to close its doors after taking a large amount of proprietary risk. Other big financial companies like Goldman Sachs and Morgan Stanley, to avoid having to go down the same way, became bank holding companies, which means that these companies could receive emergency federal funds.

A Colossal Failure of Common Sense was one of many books to be published in the aftermath of the Financial Crisis of 2007. After seeing the global economy stall in the face of massive losses in word financial markets, many Americans sought to better understand the crisis and its causes. This book, written from the perspective of a financial market insider, provides a glimpse into the world of global finance and also seeks to explain how the players in this world were involved in the crisis. In the words of the author Lawrence McDonald, “My objective in writing A Colossal Failure of Common Sense was twofold. First, to provide … a close-up, inside view of how markets really work…..And, second, to give… as crystal clear an explanation as possible about the real reasons why the legendary Lehman Brothers met with such a swift end”1. By writing about his personal experience at Lehman Brothers and recounting stories from within the famous investment banking firm, Mr. McDonald largely succeeds at his first goal. However, the elements of personal biography and the chronological order of the book make it difficult for the reader to fully appreciate all of the varied causes of the financial crash. I believe that the main value of reading this book is in understanding these causes, with Lehman Brothers acting as a microcosm of the greater financial universe. As such, in this review I have isolated elements from Mr. McDonald’s book which highlight how the crisis

Over time, the culture can change or adapt. This may be due to new leadership, mergers, or acquisitions. It may even be due to a change in the market climate itself. As new employees are brought on, they must be taught the company culture to keep it strong and in line with the overall company umbrella. Most large companies have established culture programs for their leadership, so that they may take those tools, thought processes, and examples back to their teams to keep the culture strong.

Also contributing to the outcome of the power struggle were structural features that existed across the financial industry. The whole industry is governed and motivated by profits generated through individual contribution irrespective of the firm’s net performance. This particular industry structure results in the classic inter departmental tensions to maximize the individual department’s profits. To a certain extent, Lehman had to comply with rest of the companies by creating the isolated departmental structure to maintain its top performers. As a result, when a department creates 60-80% of the firm’s profit, the power shifts to the department making the most money. Lehman could have created an alternate compensation strategy to reduce the potential for power struggle between the departments. For example, rather

Many people today would consider the 2008, United States financial crisis a simple “malfunction” or “mistake”, but it was nothing close to that. Contrary to what many believe, renowned economists and financial advisors regarded the financial crisis of 2007 and 2008 to be the most devastating crisis since the Great Depression of the 1930’s. To make matters worse, the decline in the economy expanded nationwide, resulting in the recession of 2007 to 2009 (Brue). David Einhorn, CEO of GreenHorn Capital, even goes as far as to say "What strikes me the most about the recent credit market crisis is how fast the world is trying to go back to business as usual. In my view, the crisis wasn't an accident. We didn't get unlucky. The crisis came

There is no “one size fits all” when it comes to structure and culture within an organization since industries and situations can vary. Furthermore, if an organization wants to improve its effectiveness and performance, their organizational culture needs to be strong and provide a strategic competitive advantage when it comes to its beliefs, and values. Organizations can differentiate itself from one another by those that do not have structure and culture. It is important to know that employees in all organizations want to work in an environment of trust and respect where they

The Divide by Matt Taibbi In The Divide, it covers the major differences between the very high wealthy and the lower class. HSBC is the first thing that the book starts discussing. The company admitted to stealing around seven billion dollars.

The significant finding from this article is that the world of finance is a very strange world. This world can offer opportunities to many, and at the same time, it can prove to be a mess for the others. Many people are not corrupt in their person, but by being negligent or by being careless, they fail at doing their duty successfully at some points in time. However, what the article talks about is the complete picture. Steven A Cohen faced a problem. He got entangled in an enormous financial mess.

Bourdieu’s theory of cultural capital has been extremely influential, and has garnered a great deal of literature, both theoretical and empirical. Like Marx, Bourdieu posited that capital was the foundation of social life and dictated people’s position within the social hierarchy (Bourdieu 1986). According to Bourdieu, the more capital one possesses, the more prestigious a position one occupies in social life (Bourdieu 1986). In addition to that, Bourdieu extended Marx’s idea of capital beyond the economic and into cultural symbolism (Bourdieu 1986). Bourdieu’s concept of cultural capital that refers to the collection of symbolic elements (e.g. skills, tastes, clothing) one acquires through being part of a particular social niche and his concept of habitus that refers to the physical manifestation of cultural capital owned by individuals due to life experiences are his major influential concepts that are very useful in deconstructing power in development and social change processes. However it must be recognized that these concepts also propagate social inequalities at the same time. This essay will closely examine his concepts of capital that comes in three forms - embodied, objectified, and institutionalised, and habitus in the fields of education and stratification have made of it. Bourdieu’s work will be analysed in the context both of the debate on class inequalities in educational attainment and of class reproduction in advanced capitalist societies.

Pierre Bourdieu developed the concept of cultural capital in order to attempt to explain the differences in educational outcomes in France during the 1960’s. Cultural capital is theorised as the forms of knowledge, skill, education; any advantages a person has which, give them a higher status in society, including high expectations (Nick Stevenson, 1995.pp.46-48). This differentiates economic and social status from the class agenda which, is rigidly sustained through an exclusive cycle. Cultural capital itself can be used in analysis of the class system, and how the dominant aesthetic and ideology is sustained from generation to generation.

Pierre Bourdieu is a French Theorist. Bourdieu’s theory is to emphasize constructivist structuralism and he was influenced by Karl Marx by cultural capital. Bourdieu presents the question of class. Bourdieu claimed that capital forms the foundation of social life. Bourdieu thinks the more capital a person have, the more powerful they will be, and Marx had the same view as well. Bourdieu went on to claim that it had something to do with the symbolic realm of culture. When Bourdieu brings culture into it he means the peoples attribute to the world, structured by inequality and culture structures of inequality, also states that is a big part of social inequality. Bourdieu’s concept of cultural capital is skills, tastes, posture, clothing, mannerisms, material belongings, credentials, etc. You usually receive them through a social class. Bourdieu divides capital into three forms embodied, objectified, and institutionalized. He gives an example of embodied cultural capital, while a luxury car is an example of cultural capital in its objectified state. In its institutionalized state cultural capital would be credentials and qualifications (degrees or titles that shows cultural authority and acceptance.

Goldman Sachs should have been punished for its behavior in the years leading up to the financial crisis. Goldman ended up settling with the federal government for $110 Billion, which I do not believe was sufficient based on the magnitude of problems created. This amount should have been much larger, and at minimum they should have forfeited the $14 Billion paid to them by AIG. (Inside Job, 2011) In addition, AIG should have had the right to sue Goldman Sachs for fraud. It was in the public’s best interest to keep Goldman up and running, however additional penalties could have been put on a repayment schedule to keep them solvent. Instead, you had Goldman giving out large bonuses.

In 1994, Richard S. Fuld took control of Lehman Brothers as its Chief Executive Officer (CEO). Under Fuld’s aggressive leadership, the company flourished and became one of the largest investment banks in the United States. （Crossley-Holland 2009) reported that in 1994, each Lehman Brothers stock was averaging at $4 and by 2007 it catapulted to $82 creating a 20 fold increase. From 1994, Lehman Brothers gradually adopted an aggressive growth business strategy by expanding into highly complex and risky products such as Credit Default Swaps (CDS) and Mortgage-Backed Securities (MBS). By 2007, Lehman Brothers was the biggest underwriter of mortgage-backed securities of the U.S. real estate market.

This work will examine the case 'Banking Industry Meltdown: The Ethical Financial Risk Derivatives" and determine which moral philosophy is most applicable to an understanding of the banking industry meltdown and explain the rationale. The case study will be analyzed and white-collar crimes considered as to whether they are different in any substantive manner from other more blue-collar crimes. This study will determine and discuss the role that corporate culture played in banking industry scenario and the response will be supported with specific examples. This work will postulate how leaders within the banking industry could have used their influence to avert the industry meltdown.