Analysis of Citibank's Operations: External Factors, Ethics, and CSR

This report provides a comprehensive analysis of Citibank's operations, focusing on the impact of external forces, the importance of ethics and Corporate Social Responsibility (CSR), and areas for improvement. The report begins with an introduction outlining the significance of effective management in financial institutions and the influence of external factors. Task 1 explores the impact of political, economic, social, technological, legal, and environmental (PESTLE) factors on Citibank's business operations, highlighting both positive and negative influences. Task 2 delves into the importance of ethics and CSR activities for Citibank, examining their influence on policies and decision-making. It also assesses the effectiveness of Citibank's responses to these factors and suggests areas where improvements can be made. The report concludes by summarizing the key findings and emphasizing the importance of adapting to external forces and prioritizing ethical practices for sustainable business growth. The analysis includes examples of how different external factors affect Citibank's operations in various countries, such as China, India, and the UK, and how technological advancements and legal regulations play a crucial role in the bank's performance.

Contemporary Developments in Business
and Management

Table of Contents
INTRODUCTION.......................................................................................................................................3
TASK 1.......................................................................................................................................................3
1.1 Impact of external forces on business operations of Citibank......................................................3
TASK 2.......................................................................................................................................................7
2.1 Importance of Ethics and CSR activities for Citibank and its influence on policies and decision
making.....................................................................................................................................................7
2.2 Effectiveness of the response of Citibank..........................................................................................9
2.3 Areas of improvement.....................................................................................................................10
CONCLUSION.........................................................................................................................................11
REFERENCES..........................................................................................................................................12

INTRODUCTION
Development of every business and financial institution depends upon the capability of
management regarding preparation of the effective policies and plans. These plans drive the
activities of business and financial institution towards success. It is the duty of management of
every business is to research about the market and the external forces which are persist in
business environment. All these external forces have both positive and negative impact on the
operations of business (Garrigos-Simon, Lapiedra Alcami and Barbera Ribera, 2012). The major
external forces which are prevail in business environment includes political, economical, social,
technological, legal and environmental. All these factors have huge impact on the functions of
banks and financial institutions which provides their services worldwide. CSR activities plays
huge role in the development of society and brand image of financial institutions. The
management of every institution has the responsibility to carry out the activities in the
development of society, economy and environment of country. CSR activities help in attain the
confidence and loyalty of consumers towards the services of financial institutions. It plays a huge
role in maintenance of long term relationship with consumers and accomplishment of their
business targets. Citibank is multinational financial institution which provides their services in
more than 19 countries. There are many services are provided by Citibank like credit card,
mortgages, personal loans, commercial loans etc.
In the present report explain about, impact of external forces on the functional activities
of Citibank, importance of CSR activities and their influence on decision making and areas of
improvement in Citibank.
TASK 1
1.1 Impact of external forces on business operations of Citibank
External Forces: These forces are also called macro environmental factors which are present
in business environment and affects operations and functions of every business including
financial institution. The major forces which are present in external environment are political,
economical, social, technological, legal and environmental. All these factors are not under the
control of the management of financial institutions and have to face the consequences of such
different factors. These factors restrict the growth of the business operations of financial
institutions. The flexibility of management regarding change their policies and strategies
according to such factors drives the growth and expansion of business operations of financial
institutions. Citibank is also multinational bank headquartered in New York and have business
operations more than in more than 19 countries. Different business environment prevail in
different countries which have positive and negative impact.
Influence of external factors on Citibank

All the external factors have both positive and negative influence on the operation of
Citibank. It is the duty of management of Citibank is to evaluate the effect of such factors and
prepares appropriate policies and plans which contributes in easy providence of services.
Citibank is global brand in finance sector. Its net profit is more than $17 billion in 2005. It is
considered as one of the leading brand which opens more than 140 million consumer’s accounts
globally. This bank provides their services to more than 110 million customers in more than 19
countries. The major changes are made in the structure banking operations to deal with changes
like implementation of digital technology etc. This will have huge contribution towards the
expansion activities. PESTLE analysis helps in determination of impact of macro environmental
factors which is mentioned below:
 Political: This includes the factors related to the government and policies which are
prevail in country regarding the operation of functions of financial institutions. These
factors have large importance in today’s world in finance sector. There are many
regulatory frameworks are provide by governance which is required to follow by bank.
Instead of such regulatory frameworks there are many political frameworks are present in
environment which affects the business of Citibank. Due to increasing the situation of
financial crisis the government made strict rules regarding the scrutiny of the operations
of banks. This will have negative impact upon the growth of banking activities. Citibank
is global brand having their banking operations in many countries and requires fulfilling
the criteria of different countries. This will reduce the capability of management and
hinders the faster growth of Citibank. Due to the removal of Dodd- Frank Act, market
acts negatively (Bromley and Powell, 2012). This decision hurts the belief of citizens
which lowers down the financial market for a week. So, political instability, strict
regulations, rules and regulation have huge impact on functions of Citibank. Managers
have the duty to perfectly manage these situations and guide the operations of banks
towards the fulfillment of their targets.
 Economic: It is the important factor which affects the profitability of financial
institutions. There are many economic factors which are prevail in business environment
includes cash flow in country, level of income of individuals, sources of funds, situation
of recession and inflation etc. The positive and negative impact of such factors depends
upon the situation which persists in such country. During the situation of recession
spending are fallen down due the lack of income. This will results in cutting costs by
individual. This will have negative impact on the operation of Citibank has lowers the
number of customers. There are many adverse effects are born by country and the
individuals living there like increase in the situation of unemployment, reduce the living
standard of individuals etc. If the economic situation of country is good then it has
positive impact on the profitability and helps in the growth of the financial operations of
Citibank. This can be understand while taking the examples of different countries which
is define below:

China: The economic condition is not good in China due to the fall of stock market;
this will reduce the financial operations of Citibank in China.
India: Due to the situation of demonetization, economic condition in India is not
good in particular period of time. This will shows the negative impact on the business
operations of Citibank.
If, the economic situation in country is stable and high, this would result in high
employment opportunities countries which improve the income and spending of
consumers. This stable situation proves highly profitable for all financial institution
which is working in such country.
Brexit is the popular term which determines the exit of Britain from European Union.
There is huge effect of such situation in creation of uncertainties and risk in UK. Due to
the effect of Brexit the large number of risk are arise in the financial operation of
Citibank. Competitors are also one of the factors which are cause in reduction of the
profitability and growth of Citibank (Pahl-Wostl, Jeffrey, Isendahl and Brugnach, 2011).
 Social: It includes the factors which are related to society and the individuals live there.
The major social factors are customer demographics, cultural limitations, lifestyle
attitudes, education, age, consumer behavior etc. All these factors have great influence on
the operation of Citibank depends upon the country and the social factors which persist
there. As we know, whole business activities are depends upon the society and customers.
It is important for manager of Citibank to understand the behavior and demands of
customers regarding providence of their different services. This will plays huge role in
satisfaction of their demand and achievement of their targets. The brand image of bank
also depends upon the satisfaction of demands of society which can be differing from
country to country. Education and age are important social factor. For ex, education level
in country is low then it affects the ability of consumer regarding the use of online
technology in performance of their transaction easily. Similarly, the other factor is age
and if the large number of population is of young age in some country then it helps the
bank to expand their online transaction with faster rate. This is happen because youth is
familiar to use such technology and have the belief and confidence on the security of
online transactions. Different countries have different culture and such cultural difference
also affects the employees of bank regarding provide their services to customers. Such
cultural differences affect the individual’s observation regarding the acceptance of brand.
 Technological: It is the most important factor which includes about the advance
technologies, processes, methods and techniques. All these factors have great
contribution in the growth of the financial institutions and provide various platforms
regarding improving the quality of their services. Technological up gradation plays vital
role in marketing of the services and improving the brand image of Citibank. Use of
advance technology by Citibank provides opportunity regarding taking their step towards
digitization. It plays an important role in satisfaction of the demands of customers and
becomes the method which has fastest pace regarding growth of operations. This
contributes in attraction of the large number of customers, covering of wide range of

areas by use of digital technology and improving the profitability of bank by increase the
number of customers. Acceptance of technology provides the chance to the management
of Citibank become the facilitator in international expansion. This can be understood
from the above explanation that growth in the financial sectors become impossible
without the help of new technology. As this helps in gaining competitive advantage and
drives the competitors out of the market.
 Legal: This is one of the important factors which are different in every country. This
includes the legal rules and regulation made by government of country regarding
operation of financial transactions by any bank. It is also becomes the duty of
management of Citibank is to fulfill all such legal regulations otherwise they have to face
penal actions. These will huge impact on the image of bank and lowers down the power
regarding the attraction of customer towards their services. The major legal factors which
are present in country are consumer protection laws, copyright and patent laws, health
and safety act, discrimination law etc. Managers are required to different policies
according to the legal conditions present in country. Following all these rules helps in
gaining the confidence and loyalty of consumers. This contributes in maintenance of long
term relationship with their customers. Implementation of all these rules in providence of
their function helps in attain good image in eyes of government and customers. This will
provides opportunity regarding getting the support of government. Employees of banks
also feel safe regarding their jobs and works with full passion in completion of their
tasks. Following copyright and patent act prevents the management of Citibank in use of
such technologies which is patented by other in such country. This will reduce the chance
of legal fines and penalties (Ma and Yu, 2010).
 Environmental: This includes the factors like waste management, environmental
pollution, eco friendly operations, working for the benefit of society etc. Fulfillment of all
these factors whelps in achieving the sustainability in business operations. It is the duty
of manager of Citibank to reduce the impact of their operations on environment, save
energy and defend climate. Citibank made large number of investment of $100 billion
regarding clean energy, technology and infrastructure. This investment plays the huge
role in CSR activities also which brings sustainability in the functions of Citibank
worldwide. In development of environment and society the management of Citibank
made large number of collaborations with many clients to remove the risk which is
coming out of their products and services. For this purpose, a strategy is made by
managers to focus on environmental risk. The three main points of this strategy are
environmental finance, environmental and social risk management and operations &
supply chain. The large number of benefits are derived by Citibank like sustainability,
great reputation, ensuring future growth, improves profitability, competitive advantage
etc. This plays an important role in improving the brand image in between the individuals
of society and between the members of other financial sectors.

TASK 2
2.1 Importance of Ethics and CSR activities for Citibank and its influence on policies and
decision making
Citibank is the financial multinational institution which was founded in 1812 in New
York. There are many services are provide like credit cards, mortgages, personal loans,
commercial loans and lines of credit to their customers worldwide. Citibank has more than 2649
branches in more than 19 countries. In US, it has around 723 branches and in Mexico has more
than 1494 branches. The largest number of revenue is generated from the financial activities
which are provided in Mexico. The management has provide more concern to the Ethics and
CSR activities as it provides many benefits to bank in worldwide. CSR activities are directly
related to the growth of society which in turn improves the image, number of customers and
profitability of Citibank. The large number of benefits is derived by manager of Citibank through
Ethics and CSR activities like employee and customer relationship, customer’s satisfaction,
attain their loyalty etc. This will not only beneficial for Citibank the country also get the benefits
in the form of development in society, economy, infrastructure, employment opportunities, living
standard etc.
Ethics and Corporate social responsibility: It is considered as the important approach
for every kind business which includes the process of providing activities for the development of
society, environment and economy of country for the benefit of all stakeholders. These activities
results in sustainability in the performance and functions of business. It can also considered as
the self regulatory mechanism which includes many policies and functions and the businesses are
required to monitor continuously to fulfill such policies and functions with the spirit of law,
national and international forms and ethical standards. It is very broad concept which covers
different functions like human rights, environmental effects, health and safety and corporate
governance. The main aim of every business behind the providence of CSR activities is to
improve long term profits, attain shareholders trust through positive relation with individuals of
society and achieving high ethical standards which helps in reduction of business and legal risk
(Welch and et. al., 2011).
Importance of Ethics and CSR activities
Large number of benefits is derived by Citibank through their CSR activities which are
mentioned below:
 Risk management: CSR activities help Citibank regarding prevention from the legal and
financial risks. It is considered as the important risk management tool. As the many
important areas are covered under the CSR activities like health and safety, corporate
governance, human rights etc. So, this self regulatory mechanism helps in fulfilling
polices and terms which are provides by society and government which reduces the

chance of risk while providing their functions. These activities help the bank in regulation
of such laws and saves from the various monetary and non monetary penal actions.
 Improvement of public image: Ethical and CSR activities play huge in development of
the brand image of every business. CSR activities of Citibank help in getting the attention
of individual and government towards their different services. Every individual of
country wants to be part of such business activities which are working for the
development of society and individual. These activities also play a huge role in
improvement of the environment and removal of the various social problems. This
provides the opportunity regarding getting the support of government and cleaning up the
image of Citibank worldwide.
 Improve media coverage: CSR activities are also considered as the marketing tool
which helps in attraction of the different media platforms towards the business
operations. This also contributes as marketing tool for Citibank and helps in attraction of
the large number of customer towards their services. It plays an important in expansion of
different countries and makes their different services popularize between consumers.
 Improves employee engagement: Every person wants to work with such organization
which is doing well for the public and wants to contribute their part in such development
process. Similarly, CSR activities of Citibank help in improving the passion of employees
of bank regarding their functions and improve their dedication regarding the achievement
of their individual targets. This will provides opportunity to manager regarding
maintenance of long tern relationship with their staff members (Vom Brocke, Simons and
Cleven, 2011).
 Attraction of investors and getting good public relation with customers: CSR
activities of Citibank help in gaining the confidence of investors and customers towards
their services. Investors and customers are belief that their funds are used for good
purpose and for the development of society. This will plays huge role in improving the
power of management of bank regarding the retention of their customers for longer
period of time with their services. As it creates long term bong bond with public. This
will have huge contribution in improving the profitability and sustainability in growth
operations.
Influence of Ethics and CSR
There are large number of effects is considered on the different aspects which are defined
below:
 Customer influence: Customers make their opinion regarding the use of services on the
basis of some criteria like services of alternative banks, quality of services, goodwill of
banks etc. This will be determined by customers through their CSR activities. It helps in
determination of best service providers.
 Employees influence: CSR activities have great contribution to acquire talented
employees. This will also proves as motivating factor which motivates the existing

employees to build their bond with the services of bank for long period of time. This will
improve the decision making of manager of Citibank regarding monitoring and
controlling of the different functions and improvement of profitability.
 Competitors influence: Competitors are the external factors which reduces the capacity
of Citibank regarding providence of their financial functions to end consumers. CSR
activities make the image of Citibank different from other competitors and help to attain
competitive advantage. This will plays huge role to make sustainability in their business
operations worldwide.
2.2 Effectiveness of the response of Citibank
There is huge effectiveness of all the policies and procedures which are used by Citibank
in growth of their business functions. The effective policy of CSR used by Citibank has large
number of effectiveness on their operations which are described below:
 Development of community and charity: There is important role of CSR to make
strong bond with the community with the help of their charitable functions. It provides
the opportunity regarding marketing of their services by creation of the various activities
of community development like social awareness regarding the use of online technology
and their benefits regarding security of money and saving of valuable time etc.
 Green business: The main aim behind CSR activities of Citibank is to remove the
adverse impact of their function on society and provides their contribution for the
development of individual, infrastructure and saving of the environment of country.
Fulfillment of all these functions helps in accomplishment of the objective of green
business. This includes about making the enviornmnet pure and makes the society free
from different financial risks. This would helps in attraction of the media towards their
functions helps in popularity of their services (Carroll and Shabana, 2010).
 Improved communication: CSR activities of Citibank provide the opportunity to the
management regarding make their bond strong with their employees and consumers by
helping them in different aspects. Such removal of communication gap helps in
determination of the demand of employees and consumers. This will plays huge role in
satisfaction of their different demands and improves their productivity and profitability.
 Employment opportunities: Large numbers of funds are providing by Citibank to other
entrepreneurs to start their own business which helps in development of society and
creation of the employment opportunities. Similarly, they provide lower interest rate
loans to individuals to promote business ideas and make them self dependent. This will
provide the benefit to Citibank as they get the support of government and public for their
services.
 Employee’s betterment: Employees are important assets which helps accomplishment
of their desired targets. Employees are considered as the key of success. Application of
the different laws like Wages Act, Health and Safety Act etc. plays huge role in
providence of all and equal rights to all the employees of bank. These laws bound the

management of bank to provide appropriate training and development programs,
accommodation, salary etc. in the development of their personality and professional
career with Citibank. These activities provides the chance of attain the confidence of
employees and achieve success in their future operations.
2.3 Areas of improvement
Citibank is multinational financial institutions having wide operations in different
countries. But there are some recommendations which makes their functions more better and
perfectly satisfies the different criteria’s which are provide by customers, employees,
government etc. These recommendations have huge importance improving the business and
attraction of the customers. Some of the majors and the important recommendation regarding the
functions of Citibank are mentioned below:
 Concentration on global problems: As Citibank is doing well in Mexico and the 70%
of revenue is generated from the financial activities which are providing there. This is so
because the business environment is favorable for the financial institutions. The major
external factors like political, economical, social, technological, legal and environmental
have positive impact on the operations of Citibank. It is recommended to the management
of Citibank is to consider the global problems and effective policies. This will helps in to
revive and fight against the financial crisis like GFC in 2007.
 Employ more employees: The Citibank is needed to appoint large number of talented
individuals which have the knowledge of finance and marketing. This helps in research
about the market and the competitors prevail there. This provides the opportunity of
attain competitive advantage and provide better financial services to their customers. This
contributes in retention of their customers for longer period of time and capture large
market share (Gibb, Haskins and Robertson, 2012).
 Development of online structure: Citibank is global brand and provides their services
worldwide required adopting effective digital technology which helps the customers to
operate their accounts and transaction online with the help of such digital technology.
Adoption of online technology and performance of transactions online helps in saving the
time of customers and provide more security of their funds. It is also considered as the
important tool which improves the connectivity between the different banks in different
cities. This provides the opportunity to customers to operate their accounts from
anywhere in the world with the help of such technology. This will saves the time of
employees of banks and improves their efficiency in performance of their functions as
they have easy and quick medium to communicate with their other coworkers. It has
great importance in attraction of the large number of consumers and increases the
profitability. Adoption of online structure helps in sustainable growth of the activities of
Citibank.

CONCLUSION
It has been concluded from the above report that, large numbers of external factors are
present in business environment. Citibank is multinational bank which provides their services in
more than 19 countries. Different countries have different external forces and conditions which
influence the transactions of bank in different manner. To get the benefits from such forces is the
duty of manager by preparation of appropriate strategies and policies. This helps in reduction of
the adverse impact of such forces and removal of situations of risks. These policies proved as
important guiding factor which provides direction to the employees of Citibank in performance
of their different functions. This will have huge opportunity in expansion of the functions of
bank worldwide and accomplishment of their targets. To make the activities of Citibank
sustainable the managers are decide to provide CSR activities in the development of society,
economy and environment of country. This will have huge importance to gain the confidence of
consumers for their different services.

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