Executive Summary: This paper analyzed the case study of Natures Own Hedge Fund and identifies the major issues faced by Goldman Sachs organization. From the analysis of Goldman's profile, it can be said that Mark Tercek managing director of organization could not use effective strategy to face the recession situation in 2008. Golman's conservancys partnership with Dow Chemical was not effective that impacts on the financial performance of organization. Tercek should be used effective marketing and control of expenses strategy to improve performance of organization.
Analysis of Key Issues: In 2005, Mark Tercek was appointed managing director of Goldman Sachs that is relatively new environmental approach group, working to slope up investments in sustainable energy. Goldman Sachs is carried to see the marsh as green infrastructure and involved in conservancy. In 2008, it faced issues due to the financial crisis of market. In July 2008 the stock market has declined, real estate slumped, Conservancy's donations and dues and heavily tax impact on performance of business of organization (Wells, 2012).. Organization loosed $321 million at the fiscal year 2009 due to declined of stock market and real estate prices. Organization uses several strategies to face this situation and improves its performance.
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On the other hand, Managing director cut $80 million from the conservancy operating budget and restrict them at $530 million. Tercek reduced 9% around 3700 of its member staff in February 2009 to control the expenses and faced the recession situation effectively. Buy Tercek did not come to the conservation to fight financial brush fires that created issued of organization. With the help of organization's board of directors and Conservancy's 600 scientists, Tercek wants to face of financial crisis and global environmental movements (Wells, 2012). But this approach of Tercek created fear among the environmentalists concerning forests, coral reefs, fish stocks, biodiversity. Due to reduction of 3700 staff, organization cannot protect the environment that created fear between the environmentalists. Major staffing change policy creates issues of organization to effective run its operations and attracts the people or new customers. In addition, for facing financial crisis Goldman's required raising money to buy conservation land through its global tree-plantation program (Nanto, 2010). Tercek focused on partnership strategy to reduce the risks and face the financial crisis.
Tercek created conservancy's five-year partnership with Dow Chemical to effectively face the financial crisis and improves performance of business. Dow has manufactured 5000 different products at 197 sites in 36 countries. Under this partnership, 20 conservancy scientists are acquiring to Dow's facilities for starting at Dow's sprawling Freeport (Tex.) plant (Wells, 2012). But the Dow's involved in the pollution issues and responsible for dioxin pollution of a nearby river. Partnership strategy of Tercek could not effective and created issues of firm. On the other hand, Dow's bad reputation impacts on the business and performance of Goldman's and could not effective of it to face the financial crisis. Bad reputation of partner impact on people or industries and restricted them to involve the organizations global tree-plantation program (Batten & Szilagyi, 2011).
After the global financial crisis, Goldman's faced $321 million loss to its portfolio in 2008-09 and faced the financial issues to running the operations of organization. Before the recession, organization earned $246 million in conservancy investment income at 2007 by putting 19 percent of its $1 billion endowment in private equity and 17 percent in rebounding hedge funds (Wells, 2012). After the recession, organization total revenue was declined due to the less involvement of people and industries in its global tree-plantation or conservancy program. Organization could not effective create awareness among the people or industries about the conservancy, green infrastructure, biodiversity and environment protection.
Recommendation: Goldman should be used various strategy to improve its performance during recession period to effective face the financial crisis or recession. Organization should maintain the conservancy's demoralized scientific staff to effectively run its operations. Major staffing change policy could impact on the performance and revenue of business, so it should retain the conservancy's scientific staff to perform well. Tercek should retain the skillful or experience scientific staff and take advice of them about the way to improve the performance of organization during recession. It is an effective way to face the situation because group of staff provides different solution of problems (Thompson & Martin, 2005). Tercek should select the one or more options provided by staff and implement them to improve performance of organization.
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Organization should use partnership strategy but consider the image of partner's company. Good market reputation and image of partners should beneficial of Goldman's to effective attract and involve the people with its conservancy program. Partnership strategy is effective to reduce the risks and face the financial crisis or recession. On the other hand, Goldman's should try to create the awareness in the mind of the people about conservancy environment. For it, it should use the effective marketing practices such as social media advertising, print media and internet advertising technique to create awareness among the people (Khosrow-Pour, 2002). Through the promoting process it increases the awareness in the mind of people and includes them in its global tree-plantation or conservancy program.
Tercek should adopt the marketing process which included such as advertising, media advertising, public relation, etc. By advertising process, it should focus on create awareness about the conservation moment or program. By media advertising it could reaches a lot of people and explains them about the important or need of conservation program. By the public relation process, it will meet directly people who can helpful to create the need and demand for conservation for people. Marketing strategy and tactics could be effective of Goldman's to raise the money to buy conservation lands. Goldman's should try to arrangement seminar or healed the meetings on the topic of conservation moment and try to explain clearly about the conservative environment (LaBonte, 2009). It should take the feedback also to check the awareness about the conservation after the seminar or meetings. Goldman's should also try the explain conservation properly to the organization.
The organization should recognize that the conservation and management of geological heritage need to be integrated by organization in their goals and programmers. Goldman's should try to reduce its expenses and try to expense in that work that will be essential of it. It should try to work with that organization whose market value or market share high. If the market share of those organization are large in market it could be profitable for raising the money and helpful for attaching with other organization also. If it will success to attach with more organization it increases the morale of the organization's employee and improving the financial support to the organization. On the other hand, Tercek should be clearly defined the goals, objectives and mission of organization or conservancy program to provide right direction of member firm and employees (Lussier & Achua, 2009). Goldman's should aware of the need to promote the conservation and appropriate management of the organization also. It should recognize the need to strengthen the co-operation in the field of conservation moment.
Conclusion: On the basis of above discussion, it could be concluded that Goldman's mainly faced financial issues due to recession and financial crisis in US. At the same time, Tercek used partnership strategy with Dow but the bad reputation of partner's company also created issues of organization. Goldman's should be followed the different strategies to effectively faced the financial crisis and reduced the risk of business. Tercek should control the expenses and uses the marketing tactics to improve performance of organization. It should use different marketing strategies such as advertising, public relation, etc to create awareness among the people about its conservation program. It should also use different marketing channels such social media, print media and internet to effectively promote its programs and events.