MANAGEMENT COMMUNICATION - Pearson Learning Solutions

88 Chapter 3 ● Communication Ethicscorporate history. Unfortunately for Prince,the problems are pervasive throughout mostof Citigroup’s diverse service offerings.In March 2005, Prince announced hisstrategy to transform the financial giant andto provide a new direction for the future. Hecalled it the “Five Point Ethics Plan” to:improve training, enhance focus on talent anddevelopment, balance performance appraisalsand compensation, improve communications,and strengthen controls. Due to the size andcomplexity of the organization, there weresignificant unresolved questions. How couldthe plan be effectively revealed? Would theplan be strong enough to change the cultureof the entire organization? How should thecorporate communications department handleboth the initial and long-term communicationof this plan to major stakeholders?About CitigroupIncorporated in 1998, Citigroup Inc. is a diversifiedglobal financial services holdingcompany providing services to consumer andcorporate customers. The company hasapproximately 141,000 full-time and 7,000part-time employees in the United States and146,000 full-time employees in more than 100countries outside the United States. All ofCitigroup’s services can be grouped in threemain areas: Global Consumer, Corporate andInvestment Banking, and Global WealthManagement. Citigroup also has two standalonebusinesses, Citigroup Asset Managementand Citigroup Alternative Investments.Global Consumer Group was 72 percent ofincome in 2004, with Investment Bankingcoming in second at 13 percent. 1The Citigroup umbrella covers severalbrands including Citibank, Citifinancial,Citistreet, Citi, Primerica, Banamex, andSolomon Smith Barney (SSB). Citigroup hasa 200 year old legacy of innovation andachievement. The City Bank of New York isCitigroup’s earliest ancestor, establishing acredit union for merchant-owners in 1812.Many of the rest of Citigroup’s ancestorsoriginated in the late nineteenth century,including Travelers, Smith Barney, BankHadlowly, and Banamex. In the twentiethcentury, acquisitions included IBC, SalomonBrothers, and The Associates. Sandy Weill,former CEO, was recognized as bringing itall together under the one red umbrella ofCitigroup in 1998. 2Sandy Weill: The Man Who Shatteredthe Glass-SteagallEverything about Weill is big, including hisambitionCharles Gasparino, Blood on the StreetCongress passed the Glass-Steagall Act in1933, which established what was known asthe Chinese wall between commercial bankingand investment banking. That sameyear, the man who would influence therepeal of that act in 1999 was born. SandyWeill later became one of Wall Street’s mostinfluential men as the Citigroup CEO in1998. He ran the one-stop financial supermarketuntil 2003. 3In the 1960s, Weill grew ShearsonLoeb Rhodes brokerage from a mid-sizedbusiness into an empire that he sold toAmerican Express Corporation in 1981.After being bounced from Amex, he hadone of the most notable comebacks on WallStreet. He merged his insurance company,The Traveler’s Group, with the SalomonSmith Barney brokerage and the Citicorpbanking empire. This merger made Weill avery rich and powerful man, but the famealso brought a lot of negative publicity.During Weill’s era as CEO, Citigroup wasassociated with numerous corporate scandals,regulatory investigations, and legalsettlements.In an interview with the New YorkTimes on September 11, 2005, Weill still000200010270582216Management Communication: A Case-Analysis Approach, Fourth Edition, by James S. O'Rourke, IV. Published by Prentice Hall. Copyright © 2010 by Pearson Education, Inc.