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Howard Gardner

Howard Gardner

Howard Gardner is the Hobbs Professor of Cognition and Education at the Harvard Graduate School of Education and Senior Director of Harvard Project Zero.

Post-IPO deception

Q: Goldman Sachs promises to put customers' interests first. At the same time, Goldman was able to avoid serious financial trouble by hedging positions in ways that placed bets against clients. Do Goldman's leaders need a new business strategy, or do they need to just do a better job at explaining their business to regulators and the public?

Goldman Sachs is widely acknowledged to be a leader in its field and has certainly been successful by most commonly applied criteria. But it has to decide what business or profession it is in.

If it is just a business, whose goal is to make as much money as possible for partners and shareholders, then it needs to make that clear. "We will do anything legal that we can," -- and, implicitly, cut as close to illegality as we can without crossing the line. But if it claims to be socially responsible, if its partners claim to be professionals, then it has to apply much stricter standards to its own actions and take full responsible for the consequences of these actions.

By most accounts, so long as Goldman Sachs was a partnership, it behaved in a professional manner and was justifiably respected for its behaviors. But it is clear from recent events in the post-IPO period that it is now strictly a business, one that aims to make as much money as possible, by any and all means, including ones that involve deception of its customers.

Goldman Sachs does not need a new strategy or a new public relations gimmick. If it wants to become a respected firm, it needs to alter fundamentally its hiring, its training, its reward systems, its accountability, and its transparency. Absent a new leadership, with a wholly different set of ethical standards, that won't happen -- even if the firm claims to be doing "God's work."

By Howard Gardner

 |  April 27, 2010; 6:34 AM ET
Category:  Economic crisis Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
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And when you're fighting a war do you hire wimps?

Posted by: KraftPaper | April 27, 2010 9:35 AM
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