Goldman Sachs is a multinational American investment banking and financial service company. It was established in 1869 by Marcus Goldman and Samuel Sachs. It is widely famous for being the richest bank on Wall Street. Goldman Sachs follows a hierarchical structure for its organization to date. In October 2022, the chairman and CEO, David Solomon introduced a new organizational structure for the company’s functioning. The motive behind the reorganization was to turn the company’s image into a digital bank with diversified streams of revenue. Let us know more about that the Goldman Sachs’s Organizational Structure-Know More.
Goldman Sachs’s Organizational Structure
Before October 2022, the company had main 4 subdivisions, namely global markets, asset management, investment banking, and consumer and wealth management. The newly introduced organizational structure is divided into three parts. The first is a merger of consumer and wealth management and, asset management. The second part deals with global markets and investment banking. And the third one is the organization’s digital offerings. These three segments are yet to be named.
The earlier structure had four parts as discussed above. The division of global markets was subdivided into four parts, viz. fixed income, currency and commodities, equities, and principal investments. In 2017, 37% of the organization’s revenue was generated through global markets. In 2015, investment banking was responsible for 21% of the organization’s revenue. The investment banking segment primarily worked in areas of financial advisory. Asset management participated for 18% of the company’s revenue in 2015. It is the source of the company’s investment advisory and financial services. Consumer and wealth management works on giving unsecured loans, providing credit cards, and providing loans through the firm’s private banks.
Function-based groups
The firm has function-based groups for work, which are addressed as divisions on the website.
Each group is managed by a certain combination of executive directors, vice presidents, or managing directors. The list of these groups is as follows:
- Conflicts Resolution Group.
- Controllers.
- Corporate & Workplace Solutions.
- Corporate Treasury.
- Engineering.
- Executive Office.
- Finance.
- Firmwide Strategy.
- Global Compliance.
- Global Investment Reach.
- Human Capital Management.
- Internal Audit.
- Legal.
- Operations.
- Risk, and
- Tax.
What are the benefits of Goldman Sachs’s organizational structure?
Goldman Sachs’s organizational structure has a very clear and functional chain of command. This resolves the issue of misconduct. The organizational structure ensures proper communication through channels and hence, no communication gap lasts. The chain of command also stands as a motivation to the employees. Since there is a proper chain to reach the top level, it serves as a measurable goal for the employees. For example, recruits start as Analysts and are then promoted to Associate, and then they progress to the role of vice President, and occasionally, Managing Director.
All the divisions have the independence to conduct procedures to select the vice president. This means the company’s structure is not too hierarchical, it is becoming flat. So even though a clear chain of command exists, the autonomy of divisions, thousands of senior officials, and a lesser number of managers represent the company’s flat organizational structure.
Conclusion
Goldman Sachs has a hierarchical as well as flat organizational structure. Each division has its function assigned to it. As of now, the three subdivisions work on assets, consumer and wealth management, investment banking and global markets, and digital offerings. The firm has started to introduce itself as a digital bank. The old organizational structure had four divisions, which were categorized based on functionality. The clear chain of command offers the company specifications and the clear stepwise progression in seniority motivates the employees.
FAQs
- What is the difference between the vice president and executive director at Goldman Sachs?
Ans. The executive director at Goldman Sachs is David Soloman, who is the chairman and the CEO of the firm. There is no position as executive director in the firm. In the organizational structure, there’s only an analyst, then an associate, then a vice president, and then a managing director. The managing director is defined as a division, whereas the vice president is also elected for a division, but he has to communicate between the divisions to maintain updated information about all the activities going on in the firm.
- What is the salary at Goldman Sachs?
Ans. The analyst’s salary at Goldman Sachs may be around 21 LPA (base pay + additional pay) with 0 to 4 years of experience. The associate makes about 27 LPA with 1 to 4 years of experience. The vice president may earn up to 45 LPA with 7 to 15 years of experience. These values are the total base pay and additional pay. The additional pay may range from 2 lacks to 15 lacks per annum. The salary of a managing director in India may be 73 LPA. These values show that the salaries at Goldman Sachs are pretty high. The progression is also very organized, which is a very motivating factor for employees.
