Taking Sides Case Analysis: Citigroup

Taking Sides Case Analysis: Citigroup

Showing environmental adaptability is important to master in order for a global organization to achieve success in its foreign operations. Citigroup is a global organization that expanded its operations in China. However, there is a question whether Citigroup displayed environmental in its attempt to expand operations in China. This paper will discuss both sides whether Citigroup displayed adaptability or not. The arguments claiming Citigroup did display adaptability are presented first. The other side will then be presented. This paper will be concluded with the decision of the stronger argument.

Adaptability

Citigroup had minor problems adapting to the Chinese business process due to its experience in these markets. Citigroup had originally entered the Chinese market in 1902 and in 2002 marked its centenary. In the 1930s, Citibank was one of the country's major foreign banks. Citigroup operated 14 branches in nine cities but the communist takeover forced the closure of all of Citigroup’s branches. Citigroup went back in 1984 and began the process of apply for licenses. Citigroup’s past experience in these volatile markets created a level of operational expertise. The past experience and resilience was a particularly valuable asset in attracting and keeping important multinational accounts (Pearce & Robinson, 2005).

Citigroup began its positive ventures in to China by considering the most important aspect about being in another country; human resources. Citigroup started branch banking activity in China by training locals to be successful managers. Citigroup began this human resource effort in 1990 which by 2000 had given Citigroup a decade of trained personnel. Citigroup made sure that employees in China went through about seven years of experience before becoming managers. This human resources practice was perceived as a powerful competitive advantage (Pearce & Robinson, 2005).

Citigroup worked hard at developing a well established reputation for commitment. This effort made them popular with the government. Citigroup implemented in China their practice of promoting from within the operations. In other countries where it had operations, over 95 percent of Citigroup's jobs were held by locally hired staff. These efforts helped Citigroup develop close ties with the community and government (Pearce & Robinson, 2005).

Citigroup was also able to adapt well by showing their commitment for staying for the long haul. Chinese people saw that other banks moved into the country with the expectation of quick, high profits and then moved out (McGeehan, 2005). The people saw that Citigroup moved in early with the intent to stay. Citigroup was also willing to transfer technology and train the locals (Pearce & Robinson, 2005).

Citigroup continued to adapt to doing business in China by embedding itself in new economies by