The Decision-Making Process

A characteristic of investment banks is that they give great autonomy to individual employees, often with minimal interference by managers. Managers are often only involved in managing the relationship with clients to give them a feeling of being important to the investment bank as senior managers are engaging with them; they are often not much involved in decisions made on the advice their clients receive, but merely present the advice prepared by more junior staff to the client. This leads to a situation in which decision-making is delegated to a large extent to relatively junior employees. The organisational structure of investment banks also reflects such delegated decision-making, with only a small number of management levels present, and these often being more formal than of any practical relevance in the daily work of investment banks. This is commonly referred to as a flat organisational structure. Granting employees such autonomy to use their expertise and make independent decisions is not common in other industries, including commercial banking, and probably to the same extent only found in management consulting.