Search results

The aim of this article is to open a dialogue between several books written on Goldman Sachs and the academic literature.

Greg Smith's “Why I Left Goldman Sachs” and the French investigation of Marc Roche entitled “THE Bank: How Goldman Sachs Rules the World” are closely studied to identify recurring topics regarding the investment bank.

Three major dynamics are identified: the intense socialisation that every new employee encounters (almost an indoctrination), the cultural paradigm shift that Goldman Sachs underwent during the 1990s and 2000s and the intensity of the revolving doors between Goldman Sachs' managers and the public regulatory sector.

Focusing on revolving door dynamics, this article opens a dialogue with the academic literature allowing for a problematization: the constant circulation of personnel between regulatory institutions and regulated organisations generates a convergence of actors' habitus that weakens regulation as a whole.

This chapter seeks to integrate and expand on the ideas presented by Cropanzano, Li, and James (this volume), Ambrose and Schminke (this volume), and Rupp, Bashshur, and Liao (this volume). First, it summarizes and comments on the key insights made by each set of authors. It then presents five propositions, along with some preliminary evidence supporting each: (1) employees can and do make source-based justice judgments; (2) justice treatment is directed at different targets (including individuals and groups, both internal and external to the organization); (3) global justice climate may be a useful approach to studying justice once the relationship between more specific justice climates (e.g., interunit or intraunit justice climate) is better understood; (4) it is necessary to study both general and specific justice climates to understand the unfolding of justice reactions over time; and (5) a climate for justice can be behaviorally measured and trained.

The International Valuations Standards Committee adopts the Capital Asset Pricing Model as a method for estimation of the cost of equity. It has several drawbacks and appraisers in emerging markets need more useful model for cost of equity estimation. The paper aims to discuss these issues.

The proposed model is a modification of the Salomon Smith Barney model for cost of capital determination. The econometric part of the model incorporates the non-synchronous effect, the thin trading effect, the time varying risk nature, and the systematic country risk.

The model estimates the cost of equity of Bulgarian REITs more accurate than the one, who uses the traditional β estimation.

The study provides appraisers, business consultants, and investment bankers with a consistent model for cost of equity estimation. The model incorporates most of the features of emerging markets REITs return series and avoids the weaknesses of the single-factor model for cost of equity estimation in emerging markets.

The proposed model reflects the following characteristics: the degree of diversification of the particular investor (imperfectly diversified); country risk; and time-varying risk nature. The political risk is incorporated by more objective measure of the systematic country risk.

This paper aims to present the designing and investigating various types of impulse blade profiles to find the optimal profile that has better performance than the first or original blade. The studied model is a turbine with an output power below 1 MW and a large pressure ratio up to 20, which is used to gain relatively high specific work output. As a result of its low mass flow rate, the turbine is used under partial-admission conditions. The turbine’s stator is a group of convergence–divergence nozzles that provide supersonic flow.

More than 10 types of two-dimensional blade profiles were designed using the developed preliminary design calculations and numerical analysis. The numerical results are validated using the existing experimental results. Finally, the case with improved performance is introduced as the final optimum case.

It was found that the performance parameters such as efficiency, power and torque are increased by more than 8% in the selected best model, in comparison with the original model. Moreover, the total pressure loss is 12% decreased for the selected model. Finally, the selected profile with superior performance is proposed.

Simultaneous numerical tests are conducted to examine the interaction of different supersonic blade profiles with the partially injected flow to the rotor.

The purpose of this paper is to describe the process used to develop and test the Individual Behavioral Assessment Tool for Strategic Thinking.

The instrument was developed using literature that identifies practices in use in organizations to assess strategic thinking competency and recommendations of scholars and practitioners to define strategic thinking and suggest how it could be assessed. Processes defined in the literature to develop competency measurements, both generally and for leadership and strategic management concepts specifically, were applied. A Delphi panel of experts reviewed the initial draft of the instrument which, with their refinements, was administered to participants in an executive leadership program.

Cronbach’s α and principal component analysis indicated that the instrument is internally consistent and unidimensional. Rasch analysis suggested a possible reduction in items that maintains good overall instrument performance.

The study provides methodology for developing a measurement tool that fuses practice and theory. Further applications of the instrument across organizational levels and in single sectors would enhance its generalizability.

The instrument provides a consistent tool for use by practitioners to identify gaps in their own or another’s strategic thinking behaviors, specify a job-specific competency model, and direct professional development.

The instrument fills a gap in the theoretical literature by extending the descriptions of strategic thinking to include a comprehensive set of required individual behaviors. As such, it is the first theoretically based instrument to detail the specific competencies required to think strategically.

The understanding of strategic learning processes seems to be fragmented and tangled in many disciplines. To construct a meaningful understanding of strategic learning, various disciplines were reviewed and synthesized, and a strategic learning model was developed based on the analysis of previous models. The purpose of this paper is to provide a deeper understanding of underlying theories of strategic learning and its model.

The theory of strategic learning is an evolving theory so that first, the literature that helps conceptualize the strategic learning, second, the founding pieces of the literature that composite the theory; and third, the most emerging literature in the strategy discipline are selected to explain the strategic learning model. Based on the thorough review of the literature, new conceptual model of strategic learning is introduced.

In both strategy literature and organizational literature, the existing strategic learning models can be evaluated to fully capture the distinctive aspects of learning in strategy process. Various learning theories are encompassed to construct the model.

This extended strategic learning model requires empirical testing to identify dimensions of strategic learning.

The extended strategic learning model will be useful to bring about strategic change, conversation, and behavior.

This conceptual model integrates many theories and important concepts. The foundational theories identified in this study also open up new research ideas for scholars using both quantitative and qualitative approaches.

The purpose of this paper is to define and then investigate the incidence of organizational leadership practices that encourage a culture of strategic thinking.

Discussions with 400 US healthcare executives attending focused educational seminars identified 18 leadership practices that encourage strategic thinking and 117 participants in subsequent seminars completed a survey assessing their use of the practices. Central tendencies, patterns across high and low users, and demographic differences were analyzed.

The two most frequently used practices involved reactions to crises. Executives using most of the practices employed long time horizons and made investments in human resource development and organizational learning. Industry suppliers and those responsible for parts of organizations were more likely to formally develop subordinates' strategic thinking ability.

While the study used a convenience sample with self‐ratings, it identified salient leadership practices for encouraging strategic thinking. This research should be expanded to other industries and countries. Case study methods would provide additional insight.

The findings support enhanced practitioner education regarding strategic thinking and provide practitioners with a place to start in looking for ways to enhance strategic thinking among individuals in their organizations.

The study fills a gap in the literature regarding specific ways in which organizational culture may impact strategic thinking in others. The study also provides a model for scholar‐practitioner inquiry, exemplifying practitioner involvement in methodology development and the interpretation of findings.

This chapter presents a structural model à la Leland (1994) that is, at the same time, novel, simple, and able to explain the quotes of credit default swaps (CDS), equity, and equity options. The model gives a closed-form formula for the term structure of default probabilities and can be calibrated to fit the CDS spreads. It also offers closed-form formulas for equity, equity volatility, and equity options. Differently from other structural models, debt has been modeled as a perpetual fixed-rate bond, instead of a zero-coupon bond with finite maturity. Therefore, default can happen at any time, and not only at the bond's maturity. The model (which belongs to the class of first-passage models) specifies default as the first time the firm's asset value hits a lower barrier. The barrier is endogenously determined as a solution of an optimal stopping problem (stockholders’ equity maximization). Equity is seen as a portfolio that contains a perpetual American option to default and can be valuated by using the results of Rubinstein-Reiner (1991) for barrier options. Equity options are valued by a closed-form formula that requires only an extra parameter (leverage) with respect to the standard input list of Black–Scholes–Merton equation. The formula is consistent with the volatility skew that is generally observed in the equity options markets and can be used to estimate the firms’ implied leverage, as it is perceived by traders. The chapter concludes with an application of the model to the case of Goldman Sachs.

The purpose of this paper is to solve the optimal managerial compensation problem when shareholders are either naïvely optimistic or rational.

The paper uses applied game theory to derive the optimal CEO compensation package with over optimistic shareholders.

The results suggest that boards of directors should decrease option grants to CEOs when equity is likely to be irrationally overvalued at the date when the CEO's options vest.

The implications of the model are consistent with the available empirical evidence. In addition, the model generates new testable predictions about managerial stock price manipulation, the number of options granted, and the magnitude of the options’ strike prices that have not yet been formally tested.

This is the only paper to derive closed-form solutions to optimal CEO compensation when shareholders are naïvely optimistic.

Considering the sectoral balance approach of Godley, and focusing only on the two main components of the private sector balance for the US economy (household and non‐financial corporate balance), the purpose of this paper is to investigate the relationship between these two sectors, the financial variables, and economic cycle. In particular, the paper considers all these relationships endogenously.

The authors estimate a structural VAR model between household and (non‐financial) corporate financial balances, financial markets, and economic cycle and the authors perform an impulse response analysis. All the variables are expressed as cyclical components applying the Hodrick‐Prescott filter.

The main result is that: household and corporate balances react to financial markets in the way the authors expected and discussed; the economic cycle influences the two financial balances; the corporate balance has a positive impact on the cycle; the economic cycle and financial balances influence the financial variables. In particular, the point that shows that the corporate balance has a positive impact on the cycle shows that the corporate balance is a leading component of the cycle as suggested by Casadio and Paradiso and accords with Minsky's theory of financial instability.

The analysis does not include the foreign sector (current‐account balance).

This study is an important step forward with respect to the two main contributions in literature which use this approach: the Levy Institute macroeconomic team and Goldman Sachs. Methodologically their models are based on assumptions (such as exogeneity or market clearing price mechanism for the financial markets) that the authors overcome considering all the relationships studied in an endogenous manner.