Reference no: EM133195656 , Length: word count:500

Case: In order to pass this class, you must earn a C or better (70% or above) on this case study. If you do not complete this assignment, or do not earn a passing grade on it, you will fail the class. Because of this requirement, you may resubmit your assignment ONCE if you receive a failing grade on your first submission. Please carefully review the rubric, which details the assignment requirements.

Case Study: A Memo from the CEO of Goldman Sachs

(premised on the book, Why I Left Goldman Sachs, by Greg Smith)

You are the CEO of Goldman Sachs. Under your leadership over the past 5 years, you have seen your organization post record profits. The profitability of the company stems from many factors, but the gross credit (GC) and bonus forms of compensation have been major factors in successfully incentivizing employees to pursue profit-making trades.

You have just learned that one of your former employees, Greg Smith, has posted an op-ed to the New York Times highlighting his experiences with Goldman Sachs, and has published a book, "Why I Left Goldman Sachs." The op-ed piece, and the book, have created a media firestorm, and you know you need to get a handle on the situation.

Over the past week, as you have been reading the book from your yacht in the Hamptons, you have spoken to several members of GS's Board of Directors (whom ultimately, you report to). They have also read the book. While they recognize the need for the company to respond to the damaging allegations, they are vehemently opposed to any type of internal restructuring of compensation, or any other measures that would affect the company's profitability. While the past 5 years have been very profitable for Goldman Sachs, they have also been equally profitable for the company's biggest competitors on Wall Street. Board members are concerned that taking any action which would reduce the company's profitability would cause the company to lose market share, and potentially open up management to a shareholder derivative lawsuit.

Both your internal management team, and several media outlets, are anxious to hear the company's response to the book, and to the allegations of ethical violations. As CEO, your responsibility is to determine how to address these ethical issues, while also ensuring that the company remains profitable.

For the purposes of this assignment, your task is to write a memo to your employees, addressing the ethical issues raised by Mr. Smith, and outlining how the company will respond to these ethical problems within the organization, while still remaining profitable. Your memo, addressed to the employees of the company, should be no more than 500 words in length.