Types Of Mutual Fund

INTRODUCTION

* Investment Banking Industry in 2001

In 2001, the main practice prevalent in the industry was consolidation. Companies went about it via purchasing smaller businesses, partnering with banks and Mergers & Acquisitions. Many preferred stable revenue over higher margins during the year and targeted the custody business instead of the lending business. The custody business is mainly about buying and selling securities/shares for the investors and is a low-risk fee-based business with high interaction between seller and customer. In the 1990's investments banks were paying large amount of salaries in order to retain talent and make sure employees didn't start their own businesses in competition with the banks. That strategy was backfiring on the banks as compensation costs became so high, that the company had declining profits. In recent years, the trend has changed; students are looking at large investment banks as career opportunities. However, this has brought about another problem for the banks; they weren't built to handle the influx of so many eager and interested students.

* SG Cowen

Societe Generale is a bank based in France which started operations in 1864, nationalized in 1945, privatized in 1987 and purchased Cowen & Company in 1998 for $600 million. On the other hand Cowen was a bond brokerage firm which started in 1918 and was dedicated to research, equity sales and trading. Once the two companies consolidated and became SG Cowen, the loss turned into operating profit. Currently the company has 1,500 professionals and the main focus of the bankers is health care and technology, highly profitable areas of business.

1. ANALYSIS

* SG Cowen's Hiring Process

SG Cowen has a very demanding candidate recruitment, selection and hiring process for new external associate hires. The stringent process consists of multiple "rounds" and begins in the fall of each year when SG Cowen's recruiting team starts making company presentations at its "core business schools" where it has participated in the schools recruiting programs. SG Cowen's concentration is on its core business schools; however they do accept resumes from candidates at noncore schools. The process comes to a close at the end of "Super Saturday". Super Saturday is considered the final round of the process.

The initial strategy was based on the top 25 business schools at that time. The concept behind Rae's initial strategy was to focus on recruiting at the top 10 of the top 25 schools and at first glance it seemed like an excellent concept. However, realizing that larger organizations, "with huge recruiting budgets, recognized brand names and larger hiring needs", had chosen to use a similar strategy Rae revaluated his initial plan because they received immediate student interest. Rae then developed a second strategy that was focused on recruiting at the later 15 schools of the top 25. This strategy was initially met with resistance from the senior management. It was viewed as "going downstream". But the second strategy was actually a better idea and the students also tended to be more loyal.

The process begins with core business school visits and info sessions, followed by campus interviews in closed and open sessions. In this first round, interviewers tried to focus on which of these candidates could make it through Super Saturday. Interviewers are also instructed to test for culture fit. Most often there were two schedules, which would amount to 24 candidates. They would then try to narrow the list to six candidates and quickly have a second round, even that same night, on campus in order to cut half and invite the other half to Super Sunday. If selected for the final round, candidates are invited to Super Saturday where the associates' class will be selected. It's an exhausting experience for candidates and the interviewers. The day consists of a formal dinner with leadership the night before where candidates are sized up, even in a non-business setting. The next morning, each candidate is assigned five thirty minute interviews with assigned SG Cowen bank associates and leadership. After the interviews take place, all the interviewers meet to determine who gets job offers.

* Problems in SG Cowen's Hiring Process

SG Cowen follows an unstructured interview process to select the candidates. SG Cowen conducts on campus rounds at every core school giving short presentations about the company about who they are, how they differ and what their next step is and ask the students to submit their resumes and selected candidates are called for informal interview. The potential candidates are called for the next phase of selection process which is Super Sunday. In Super Sunday the representatives from bank interviewed the candidates and the potential candidates are selected by building a consensus.

The problem with the Hiring process is that apart from interviews SG Cowen does not follow any other selection tests like aptitude test, IQ etc. There is no standard to evaluate the candidates on the equal ground. The presentable and clever candidates have the chances to influence the interviewer. As the interview is unstructured the interviewer can pursue the points of interest as they develop but different interviewers can have different opinion about the same candidate and it might be difficult to reach consensus. The other problem I see with the hiring process is that there are no HR representatives available for hiring process, only banking professionals, who might not have ample knowledge about the hiring process and in identifying the strengths or weaknesses of candidates relevant to the job and to the cultural fit of the company. The banking professionals are not formally trained in taking interviews which can easily lead to stereotyping candidates. The selection part is highly influenced by the personal beliefs of each interviewer. The other problem is Super Sunday is a long and tiring process for the interviewers and the requirement of selecting the candidates on the Super Sunday itself puts much pressure on the fatigues interviewers, so there is chances that they may end up hiring wrong candidates while trying to end the hiring process sooner. And the interviewers don't do any further interview or research about the candidates because they have to make decision on that very day.

* Recommendations

SG Cowen should use some selection tests like aptitude test, cognitive ability tests, IQ or any other suitable test for hiring employees, to make the selection process more