Staff Writer
Columbus CEO

c.2013 New York Times News Service

There once was a time, before JPMorgan Chase’s woes dominated headlines, when Goldman Sachs was the symbol for Wall Street’s dark side. Its depiction as a bloodsucking “vampire squid” in a Rolling Stone article captured the public’s imagination. And “Why I Am Leaving Goldman Sachs,” a damning resignation letter published as an opinion article in The New York Times, also touched a nerve.

Amid the vitriol, Goldman has had plenty of defenders. They argue that the bank performed far better than its peers during the crisis and continues to be a profit-making machine. It still lands the biggest, most prestigious banking assignments, has unparalleled risk management and remains the bank of choice for top recruits.

So which is it?

Steven G. Mandis, a Ph.D. candidate in sociology at Columbia University, takes a measured, academic approach to the question in a new book, “What Happened to Goldman Sachs,” an examination of the bank’s evolution from an elite private partnership to a vast public corporation — and the effects of that transformation on its culture.

The book, published by Harvard Business Review Press, comes out Tuesday.

“You read about Goldman Sachs and it’s either the bank is the best or the bank is the worst,” Mandis said. “This is not one of those books — things are never black or white.”

Mandis, who also teaches at Columbia’s business school, has special insights into Goldman beyond his academic training: He worked at the bank for a dozen years.

The son of Greek immigrants, Mandis, 43, grew up in Grand Rapids, Mich. He joined Goldman in 1992 after graduating from the University of Chicago and worked for several years as a mergers-and-acquisitions banker. Later, he joined the proprietary trading desk, making bets with Goldman’s own money.

Mandis left Goldman in 2004 to join a hedge fund and after four years there did stints at the management consulting firm McKinsey & Co. and Citigroup. In 2008, he began taking classes at Columbia.

After writing a paper about organizational change, a professor encouraged him to write about Wall Street.

“He said, ‘No one in sociology understands banks, so you can make a contribution in that area,’” Mandis said.

That prompted the budding sociologist to pose a series of questions.

Did the culture change at his former employer? If so, why and how?

Mandis said that the two popular explanations for what might have caused a shift in Goldman’s culture — its 1999 initial public offering and subsequent focus on proprietary trading — were only part of the explanation. Instead, Mandis deploys a sociological theory called “organizational drift” to explain the company’s evolution.

The essence of his argument is that Goldman came under a variety of pressures that resulted in slow, incremental changes to the firm’s culture and business practices, resulting in the place being much different from what it was in 1979, when the bank’s former co-head, John Whitehead, wrote its much-vaunted business principles.

These changes included the shift to a public company structure, a move that limited Goldman executives’ personal exposure to risk and shifted it to shareholders. The IPO also put pressure on the bank to grow, causing trading to become a more dominant focus. And Goldman’s rapid growth led to more potential for conflicts of interest and not putting clients’ interests first, Mandis says.


A Goldman spokesman, David Wells, said that since the financial crisis, the bank had done a lot of work “to reinforce and strengthen the most important parts of our culture, but it’s not unusual for a person to think the place he or she worked isn’t the same after he has left.”

“We wish him all the best,” Wells added.

Mandis said that he was neither for nor against Goldman, but instead was trying to make a contribution to the science of organizational behavior and management.

“The book is for executives whose companies have grown from 10,000 to 50,000 people and want to better understand the consequences of that growth,” he said.


Though it grew out of an academic paper, “What Happened to Goldman Sachs” is an accessible, clearly written book. Those interested in all things Goldman will find it useful for its appendixes, which include a timeline of the bank’s history and biographical sketches of its top leaders. There is also a complete list of Goldman partners at the time of its IPO and the value of their stock holdings after the first day of trading. (Spoiler alert: The offering made them really rich.)


Mandis, who lives on the Upper East Side of Manhattan with his wife and two daughters, is teaching a course on investment banking this fall.

He is not the only author in his family. Last year, with the help of her parents, Mandis’ older daughter, Tatiana, 12, self-published “Athens: Top 50 Places to Visit and Interesting Stories That Bring Them to Life.” The travel book grew out of the family’s visits to Greece.

“Now that book,” said the proud father, “is a whole lot more impressive than writing a Ph.D. thesis.”