The Slippery Slope of Corporate Culture

Greg Smith’s resignation lament in the New York Times, Why I Am Leaving Goldman Sachs, has rightly caused an uproar. He writes, “I can honestly say that the environment now is as toxic and destructive as I have ever seen it,” implying that it has been toxic and destructive all along. Tell us something we don’t know.

Twenty years ago when I worked at JP Morgan, the public bond underwriters and pension managers complained that they were at a disadvantage when competing for business with Goldman because they weren’t allowed to “pay to play”, i.e. make political contributions in exchange for business.

Those two banks had long been at opposite ends of the spectrum. A century ago, the original J. Pierpont Morgan told counsel for a Congressional committee investigating the money trust that the most important criterion for supplying commercial credit was character, “Because a man I do not trust could not get money from me for all the bonds in Christendom.” Language, I must add, that distinguished him in ways large and small from moneylenders like Mr. Goldman and Mr. Sachs. Fifteen years ago an unnamed executive summed up the difference in business practices between the two banks to a Times reporter: “Morgan will show up with 20 people for a three-hour presentation to a client. Goldman Sachs will just send two people to sketch out a deal on a napkin at the golf club bar.”

With Robert Rubin, Henry Paulson, and Jon Corzine among the ranks of Goldman's recent former CEOs who have distinguished themselves in government and finance, you learn almost everything you need to know about the contemporary Goldman ethic, good and bad. Current honcho Lloyd Blankfein has said they are doing “God’s work.” For a Goldman investment banker to evoke the almighty as justification, he has to feel real heat.

Mr. Smith feels let down by corruption in Goldman’s corporate culture:

“It might sound surprising to a skeptical public, but culture … revolved around teamwork, integrity, a spirit of humility, and always doing right by our clients…. I am sad to say that I look around today and see virtually no trace of the culture that made me love working for this firm for many years."

A closer look at that culture would reveal something besides always doing right by the client. Corporate culture is really a nice way of moving people with a variety of motives in lockstep. One man’s client service is another man’s rapacious self-interest. Given the profitability of modern finance, rapacious self-interest has had an inexorable pull. The habits ingrained through a strong corporate culture are merely instruments for moving the herd along. Call it conformism, and in this, as in so many other areas, there’s no question that Goldman is a leader.

Upon reading Smith’s op-ed, I opened an excellent reference volume, The Wiley Book of Business Quotations, to the Goldman Sachs entry for corporate culture. (Okay, maybe that isn't quite accurate—I compiled the book myself and knew what was there.) I found Theresa M. Potter's New York Metropolitan Diary column of November 13, 1996:

Dear Diary:
Overheard on the elevator at Goldman Sachs on a recent “dress-down Friday,” a conversation between a long-time partner and a smartly attired young analyst.
Partner (sternly): It’s Friday. You’re not supposed to be wearing a tie.”
Analyst (crestfallen): “But it’s not silk.”

It’s a slippery slope.


Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.

Excellent publish.This is a

Excellent publish.This is a really wonderful site I wonder why one other of this sector never detect this venus factor

Very good Edelstahl

Useful blog good apps for

Good game of thrones season

This article hit home beach

This article hit home beach wedding hairstyle

The Slippery Slope of Corporate Culture

If you want free info About grow taller 4 idiots review how to achieve such a physique, please visit my website at:

Belgravia Villas will be

Belgravia Villas will be accessible via public transport along Ang Mo Kio Ave 5. Commuting to Toa Payoh and Paya Lebar area as well as the city area is therefore very convenient. It is also near to many eateries along the Upper Serangoon area as well as NEX shopping mall Ang Mo Kio Cluster House

Slope Slipping Away

Isn't the horrid truth that Main Street has taken hits and reshaped how it does things, while the finance guys all just want more Kool-Aid? They only make money with volume and distribution (i.e., shedding liability while keeping the money), while the rest are stuck with nothing-for-something. The argument that little old ladies aren't the purchasers is nonsense - the pension funds and insurance companies on the other side of these trades will either pass on the loss or the cost to those very same little old ladies.

The puerile conception on Wall Street that we are not connected - at least for profit and loss purposes - is in fact toxic in the deepest sense. Smart as he is, I think even Mr. Bankfein would have a hard time defending the argument that the purpose is God's, but the money is his. Unless, of course, he can persuade us that he is the son of God.

This disconnect - whether it is the off-balance-sheet creatures dreamt up by the boys and girls at Enron or the 'shadow banking system' regulatory dodge ball played over the past five years in the Wall Street playground - is at the heart of a debate that has been with us since the founding fathers. Franklin was (apparently) able to persuade his colleagues that it was so obvious that happiness (as in "life, liberty and the pursuit of..") meant public happiness, that there was no need to be explicit about this. The consequence today of that nod to contextualism is that that idea of happiness is presumed to mean what is good for the individual and not what is good for the whole of society. By equating corporations to individuals, the Citizen's United decision has taken the idea that 'what is good for General Motors is good for America' to a whole new level, pushing the notion of democracy for the individual closer to a soma- (or media-) induced state of dreamocracy, while giving the money men more hope than ever that the game - life and liberty in the U.S. - will be run on their terms.

It is not so surprising, then, that there have been so few rushing with a fig leaf to the defense of Goldman Sachs. A few chieftains spoke up, but most folks in the business know that something is just not right with how it works - that this disconnect cannot be a good thing in the long run. They must wonder how long it can go on - or how long they can get away with it - but they certainly must also hope to be out of it with their tidy sums before the music stops.

You do hear the music, don't you?