...and should answer all ifs and whys. The global/domestic reach, customer base, sales channels, product offerings, customer asset management, organizational culture and technology of these organizations were different in nature. When Top management overlooks the consequences of their decisions and risks involved, it only guarantees an eventual failure. Following ad-hoc process, poor co-ordination between business units and absence of any business model proved fatal for Citigroup. Business firms must not ignore the cultural differences while providing a set of services in different parts of the world. Tailoring its product offerings to suit the socio economic needs of their clientele should always be under consideration before actually pitching it into the market. One of the major reasons of failure for Citigroup was the lack of client profiling. National cultures vary in many dimensions across the world e.g. Asian countries are more collectivism oriented whereas Western European states are more individualistic. Citigroup ignored absolutely anything which might have given them any idea about the insight of the target audience. Customer centricity and the respect of the people are key elements for the survival of any firm. Decisions should never be solely based on a tempting idea; aftermaths are needed to be analyzed as well. The collapse of banking sector added more misery to Citigroup’s condition. Adverse consequences for global economy further exposed the lack of a proper business...
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...thoroughness with which the topic is addressed. Paper should be three to four pages in length. Citigroup is dramatically expanding its Internet presence in an effort to approach its target of 1 billion customers By Bob Violino | | | | itigroup, the financial-services giant formed by the merger last fall of Citicorp and Travelers Group, wants to be the leader in online banking and E-commerce in the financial-services industry. It wants a piece of the major portals on the Internet. And these are part of an even bigger goal: expanding its customer base from 100 million to 1 billion by 2012, Citi's 200th anniversary. The billion-customer figure, first articulated by Citigroup in 1997, is more of a "stretch target" than a do-or-die goal, company officials say. But it reflects Citigroup's effort to broaden its influence and reach dramatically, an effort driven primarily by IT. Citigroup is preparing for the customer push with an aggressive E-business strategy that involves all aspects of its organization. The division Citigroup created two years ago to spearhead its E-commerce effort is working overtime to deploy new products and services. It's exploring radical ways to make it easier for customers to interact with the company. And Citigroup's traditional IT organization is making the infrastructure changes needed to support the company's online effort. Citigroup isn't abandoning its brick-and-mortar constituency. But the greatest potential for gaining new...
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...Citigroup: Restoring Ethics and Image Before Growth Charles Prince, CEO of Citigroup, is facing a daunting challenge as the head of the largest financial services organization in world. He has joined a company that has experienced significant regulatory scrutiny and that has been linked to the biggest scandals in corporate history. Unfortunately for Prince, the problems are pervasive throughout most of Citigroup’s diverse service offerings. In March 2005, Prince announced his strategy to transform the financial giant and to provide a new direction for the future. He called it the “Five Point Ethics Plan” to: improve training, enhance focus on talent and development, balance performance appraisals and compensation, improve communications, and strengthen controls. Due to the size and complexity of the organization, there were significant unresolved questions. How could the plan be effectively revealed? Would the plan be strong enough to change the culture of the entire organization? How should the corporate communications department handle both the initial and long-term communication of this plan to major stakeholders? About Citigroup Incorporated in 1998, Citigroup Inc. is a diversified global financial services holding company providing services to consumer and corporate customers. The company has approximately 141,000 full-time and 7,000 part-time employees in the United States and 146,000 full-time employees in more than 100 countries outside the United States. All of Citigroup’s...
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...CITIBANK INDIA Industry: Banking Financial services Owner Citigroup Founded 1902 Headquarters Mumbai, Maharashtra, India Profit After Tax INR 3422 crores (fiscal year ended March 31, 2015) Total Income INR 13490 crores (fiscal year ended March 31, 2015) Number of employees 7,500 Citibank financials: https://www.online.citibank.co.in/portal/newgen/home/Website-Citibank-Financials-2015.pdf Citibank India is an Indian private sector bank headquartered in Mumbai, Maharashtra. It is a subsidiary of Citigroup, a multinationl financial services corporation headquartered in New York City, United States. The Indian Headquarters are at Bandra Kurla Complex, a hub for multinational corporations in Mumbai. Currently, Citigroup, the owner of Citibank India, is the largest foreign direct investor in financial services in India with a total capital commitment of approximately US$4 Billion in its onshore banking and financial services business and its principal and alternate investment programmes.It operates 44 full-service Citibank branches in 31 cities and over 700 ATMs across the country. Citibank is an employer of about 7,500 people. Citi offers consumers and institutions a broad range of financial products and services,including consumerbanking and credit, corporate and investment banking, securities brokerage, and wealth management. Citi's franchise in...
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...Student RES/351 April 16, 2012 Dr. UoP Professor Ethics Oriented Article Review The following is a summary of unethical business research conduct by Citigroup Inc. and subsequently resulting in trial proceedings for the unethical conduct. The summary will reveal the specific unethical behavior and who were the injured parties in this misconduct. Additionally, insight into how the unethical behavior affected the organization, the individuals, and society. Finally, evidence will be show how this unethical behavior could have been avoided or at a minimum resolved early in the research process. What unethical research behavior was involved? In 2002, Citigroup Inc. was accused of misleading investors. This misconduct was accomplished by the organizations’ research divisions with pressure from the investment sections within the company. The research analysts used biased research to promote the sale of stock that research had shown was not a good investment. The analysts misrepresented the legitimate research because of concern over from backlash from the organizations’ investment bankers. Additionally, the internal pressure from the investment sections to accomplish this misrepresentation was met the reward of bonuses and stock options for the research analysts. The end game in this misrepresentation was to ensure Citigroup, Inc. would have a better bottom line. Numerous examples illustrate the organizations viewpoint of increased profits were more important than a commitment...
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...in Boston, for several years and then enrolled in Harvard Business School. While a student at Harvard, Dimon interned at Goldman Sachs and was offered a job there after graduation in 1982. He declined, instead going to work for the mentor who would profoundly shape his career: Sandy Weill. From 1982 to 1985 Weill and Dimon teamed up at American Express, where Dimon signed on as vice president and assistant to the president. Dimon's abilities to crunch numbers meshed well with Weill's people skills. When Weill was forced out of American Express, he made Dimon his second in command at the little-known consumer-lending outfit that he bought called Commercial Credit Company. That tiny firm was the beginning of what would eventually become Citigroup. Dimon was a key member of the team that launched and defined Commercial Credit's strategy. He served as the company's chief financial officer and an executive vice president and then later as president. Through the course of Dimon's time at the firm, Commercial Credit was completely restructured and made numerous acquisitions and divestitures, substantially improving its profitability. The most significant transaction was the 1987 acquisition of Primerica Corporation, which included Smith Barney. Commercial Credit then assumed the Primerica name. In 1983 Primerica had...
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...hold a lot of power over the financial industry. One of Wells Fargo’s advantages is that that they hold a large amount of capital and have the ability to invest and keep mortgages on their own portfolio. Buyer power is high in the financial industry. The financial services industry is a service based industry, meaning if they do not please the consumer then they lose the customer. The products available by the financial industry are very similar. Although Wells Fargo puts a lot of effort into differentiating their product, the customer will go elsewhere if they feel as though they are not treated right. . Rivalry among existing firms exists between Wells Fargo, and the three following competitors: US Bancorp, Bank of America and Citigroup, this being said there is a high degree of substitutes available to the end consumer The only problem with this rivalry is that even though Wells Fargo has a national brand, the competitors can switch to lower costs and the customer will switch in the financial industry. When it comes to product differentiation, Wells Fargo has put effort into differentiating their products from that of their competitors allowing them to...
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...Citi's eBusiness Model By commercialprintin Citibank differentiate its e-business product 1. How does Citibank differentiate its e-business product offering from that of its competitors? How could Citibank create its own competitive advantages in the market place? Citibank differentiated itself from competitors by using their customer service effectively. They offered several services to their clients. Citibank offered telephone hotlines, customer relations managers to give individual attention to their customers, and service experts. Citibank also continued their investment in technology for the front and back end of the banking systems. Citibank committed to an “e-business strategy-Connect, Transform and Extend-was to web enable its core services, develop integrated solutions and reach new markets.” (McCauley & Khan, 2002, p.1). Citibank was also committed to its customers. According to the case study, ‘Citibank’s vision was to become the world’s leading e-business enabler". Citibank had over 268,000 employees located in over 100 countries and their focus was to embed their services into the everyday lives of the local population. “A bank that had roots in the country as deep as any local indigenous bank, building a broad customer base, offering diverse products, actively participating in the community and recruiting staff and senior management from the local population”. In addition to being committed to employees and customers around the world, Citibank has strong brand...
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...The Role of Corporate Law in Preventing a Financial Crisis: Reflections on In re Citigroup Inc. Shareholder Derivative Litigation Franklin A. Gevurtz* TABLE OF CONTENTS I. INTRODUCTION .................................................................................................. II. CITIGROUP AS A CASE STUDY IN EXCESSIVE RISK-TAKING .............................. III. TOOLS FOR CURBING EXCESSIVE RISK-TAKING AND THE ROLE OF CORPORATE LAW ............................................................................................... A. The Tools for Curbing Excessive Risk-taking ............................................. 1. Regulation of Business Activities .......................................................... 2. Capital Requirements ........................................................................... 3. Compensation Rules ............................................................................. 4. Liability for Unreasonable Risks .......................................................... 5. Selection of Management (Rules of Corporate Governance) ............... B. Dividing the Tools Between Banking and Corporate Law .......................... IV. WHY IT MATTERS: CITIGROUP AS AN ILLUSTRATION OF THE LIMITATIONS OF STATE CORPORATE LAW ........................................................ A. Citigroup As a Case Study In Weak Corporate Law................................... 1. Overview ..................................................
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...Discuss any suggestions you might have for improving the job design. Grouped by function or by product or geography or a matrix organization? Provide a diagram if helpful to illustrate. Is this organization effective? 4. Describe the compensation package for executives and employees within the firm. Discuss whether or not you believe that the compensation package is effective and any suggestions that you might have for improving the compensation package. ANSWERS Citigroup is a global financial organization that operates in hundreds of countries offering both institutional and consumer business services. For its institutional business, it offers full range of products from investment banking through sales, trading, transaction services, and private banking. For the consumer business services, it offers cards, retail banking and mortgages. It is a publicly traded organization with its symbol C in New York Stock Exchange. Citigroup Inc. has five legal structures: Citigroup Japan Holdings Corporation, Citigroup Global Market Holdings Incorporated, Citi GSCP Incorporated, Citicorp, Citicorp Banking Corporation, and Banamex USA. According to Brickley, Smith, and Zimmerman (2009), “an agency relationship consists of an agreement under which one party, the principal, engages another party, the agent, to perform some service on the...
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...the main drivers of Citigroup’s profitability. Overall, Citigroup Q1 financial performance was an improved net income of $3.0 billion, which is a 4-quarter high. Citigroup revenues in the first quarter 2011 were $19.7 billion, up 7% sequentially, but down 22% from the first quarter 2010 due to lower securities, declining assets in Citi Holdings and the loss on the asset transfer. Citi-bank’s profitability appears to have fallen quite significantly in Q1/2011, such that ROE is 1.75% in the first quarter this year compared to 2.92% in the March 2010 quarter. ROE was generated by ROA 0.154% and Equity Multiplier 11.4 (which is lower than in the previous period), where this ROA indicates that management are not utilising the company’s resources as well as it was at the same time in the previous year. | 31/3/2011 | 31/3/2010 | | Return on Equity | 1.75% | 2.92% | | Return on Assets | 0.154% | 0.219% | | Equity Multiplier | 11.384 | 13.325 | | However, by executing appropriate strategy with discipline, Citi Group losses continued to decrease due to an increase in capital ( u can see that Citigroup Tier 1 Common ratio increased from 9.19% in Q1 2010 to 11.41% in Q1 2011 clearly showcasing the group’s growing capital strength). In addition, average deposits and loan increased 13% and 14% respectively from a year ago, and credit trends continue to get better.so,what are the drivers for such profitability of Citigroup? Slide 7: We analyse that for short term, fluctuations...
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...10 4.0 Citibank’s strategies in place………………………………………………11 4.1 Corporate-Level…………………………………………………….11 4.2 Business-Level………………………………………………………12 4.3 Functional-Level…………………………………………………….13 5.0 Recommendation……………………………………………………………13 References…………………………………………………………………………...14 1.0 Background of the Company’s case On June 16, 1812 City Bank of New York (now called Citibank) opened for business in New York City—with only $2 million of capital. Through many different leaders and economic environments over the course of its rich history, Citibank continues to grow and prosper. On October 8, 1998, all Citicorp and Travelers Group divisions merged to become Citigroup Inc. Citigroup is today’s pre-eminent financial services company, with some 200 million customers accounts in more than 100 countries. Citigroup is the first US bank with more than $1 trillion in assets, offering a variety of deposits and loans, credit cards, investment banking, brokerage, and a host of other retail and corporate financial services. 2.0 SWOT Analysis STRENGHTGlobal networkThrough its operation in around 100 countries, Citibank has created a global network that has proved robust in the face of economic slumps affecting many Western economies. Although hindered by loan defaults particularly in Argentina and Brazil, and the subsequent rises in provisions, the bank has been buoyant in certain European markets and furthered its geographical reach through strategic positioning in Russia and...
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...Unethical Behavior Involved In 2002, CitiGroup Inc. and other top Wall Street securities firms were accused of misleading investors. This misconduct was done by the securities firms’ research divisions. The analysts used biased research to sell stock that they knew were not good buys. The analysts ignored the legitimate research because of concern over from backlash from their investment bankers. They were encouraged to do this by the investment sections of their companies in return for bonuses and stock options. The real research the ten companies did was disregarded completely so that the company would have a better bottom line. In some cases, the analysts recommended stocks that they knew were no good. Citigroup was the parent of Salomon Smith Barney at the time of the ethical misconduct. “At Salomon Smith Barney, analyst Grubman reiterated a "buy" recommendation in February 2001 on Focal, an investment banking client, and a target price of $30 (twice the stock price). The same day, an institutional investor e-mailed a research analyst who worked for Grubman, "McLeod [McLeod USA Inc.] and Focal are pigs aren't they?" and asked whether Focal was a short. The analyst responded, "Focal definitely "" In April 2001, Grubman stated privately the need to downgrade Focal, but nevertheless once again advised investors to buy Focal” (Di Lorenzo, 2006). Some stocks went from $80 to $2 a share but the analysts were still pushing the stock. This went on for months and in some...
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...Ever since the financial crisis in 2008, Citigroup along with many other major players in the banking industry have and still are currently being faced with numerous changes in regulations. Such as the Dodd-Frank Wall Street Reform and Consumer Protection Act, which seeks to limit the amount of risk that customers can take on. The act also implements strict liquidity, capital, and leverage ratio regulations for all companies in the financial service industry. The impact of this law could make Citi’s capacity for pursuing business opportunities much more difficult, along with higher penalties along with higher interest expenses. The Federal Reserve has stated it will begin enforcing the law in 2014. An important part of the Dodd-Frank Reform Act is called The Volcker Rule and has been a hot topic of debate over the past few months. The rule is meant to force strict limits on banks taking part in "proprietary trading", which means that they are betting the bank's money by speculative trading in financial instruments. Essentially the rule is trying to ban proprietary trading, which is how banks currently trade for a profit. Basel III which was developed by the Basel Committee on Banking Supervision is a set of restrictions that aim to toughen the regulation of the banking sector. In an attempt to progress the banking sector's ability to handle the volatility arising from financial and economic problems. This impacts Citi by diverting profits to capital, away from increasing dividends...
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...Intercontinental University Citigroup Globalization MKTG 205 – Principles of Marketing March 11, 2012 Abstract Banking has become one of the most globalized service on the planet, after all monetary exchange is done everywhere in some form. Out of four big banks in the United States, Citigroup has had its share of ups and downs and is still maintaining its global presence. Today we will look at the big bank from a global perspective. Introduction Citigroup has made many transformations over the years in both positive and negative directions, yet the brand maintains a reputable global status. Banking has become one of the biggest global operations that offers finance services across the globe, and Citigroup is one of the biggest brands in the playing field. Business Field Citigroup long thought of as just a bank, is a financial services organization offering consumer banking to investment banking and from merger underwriters to currency handling (Services, 2012). They utilize two business segments which are the Regional Consumer banking and business and institutional services. This basically means that part of their business models deals with the banking services of individual customers and the other caters to business and institutional services. Global Operations Citigroup actually operates out of more than 160 countries with more than 200 million accounts on their books but is based in New York City right here in the United States. Citigroup separates their business...
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