Power of Sina Weibo Essay Example | Topics and Well Written Essays - 3000 words

Power of Sina Weibo - Essay Example The Sina Weibo case in China is just one example of how popular social media celebrities exert influence on their followers and how this can have detrimental impact on the government in terms of policy changes. Charles Xue more commonly known by his Sina Weibo screen name Xue Manzi confessed to having made mistakes pertaining to his online posts on the social network (Zhai 2013, n.pag.). Xue confessed to his crimes as a micro blogger on Sina Weibo where he presumably spread rumors (Custer 2013, n.pag.). A charge was filed against Xue along with other micro bloggers. However, Xue has set himself apart and is acting as an example to admit to his blogging crimes thereby helping the government to regulate the internet. At first, this might seem quite trivial however the impact of social networks on a country’s interest and government policies cannot be undermined. According to Shirky, the internet and social media is a place of varied players including citizens, activists, NGOs (N on Governmental Organizations), telecom companies, software houses, governments, and so on (2011, 1). The presence of various actors on the internet and social media has raised concerns regarding its ability to influence a particular country’s interests and government policies. ... However, his actions and confession sends out a completely opposite message to his millions of fans and followers and Xue now seems to be remorseful. He hopes to set an example by admitting his online crimes and helping the government to regulate the content on the internet. Much of the concern regarding the regulation of internet in particular social websites like Sina Weibo arises from the fact that pressure fuelled up by public opinion communicated over Weibo resulted in a change in government policy regarding air pollution. Also, the government was forced to start reporting the PM 2.5 levels in a timely manner (Custer 2013, n.pag.). Not only this, but public opinion regarding corrupt and inefficient government officials over Sina Weibo resulted in the removal of these officials from office. The spread of rumor online has caused the government to censor online content particularly on social websites like Sina Weibo. As of now, several posts and images have been removed and deleted from Sina Weibo website as a result of censorship (â€Å"China’s Memory Hole† 2013, n.pag.). Unlike the United States, the social media in China is highly decentralized which is why the responsibility of censorship falls under numerous internet service providers (King, Pan, and Roberts 2013, 1). Thus, the government has employed a method which fines or takes other actions against them is they fail to comply with the government requirements regarding censorship. This step, as King, Pan and Roberts explain, has been taken â€Å"to limit freedom of speech† and therefore restricts the expression of public opinion. The censorship efforts have been great even though China is not a top inhibitor of press freedom. Xue, who is considered to be a strong opinion leader

Video project Assignment Example | Topics and Well Written Essays - 500 words

Video project - Assignment Example In this context, spectrum health involves itself with the community by creating direct contact and addresses their concerns in the manner that is best suited for them. The company involvement with the affairs of the community enables the community to appreciate its existence while the company can know the needs of the community health wise and address them in future community focused programs. The video illustrates the assigned course very well as it clearly shows the innovative manner a company or organisation can be involved in the community around it especially making the programs community friendly through participation. In this case, it is initially all about the social parties rather than what the organisation derives from it. The company does not engage mainly to rip benefits but it stands to ultimately benefit from its involvements through several avenues. The proceedings in the video provided bear a relation with what was discussed in class. One notable element relates to how corporate social responsibility in modern days functions. It is notable that the organisation Spectrum health stands to gain from its involvement with the community. Through corporate social responsibility, it is building reputation which in line translates to a better image. Demand for its health insurance services are likely to go up because it identifies with people surrounding its basic operations. According to the iron law of responsibility, those organisations that do no appeal to the society through usage of their power loses it. From the video, it is evident that Spectrum Health’s goal is to use their influence and contribute positively to the society. Essentially, their goal with coming up with the project is to make a positive impact which they achieve. The actions of the organisations contain some present forms of corporate social responsibilit y. There is the citizen ship approach- they do it out of obligation and accountability, they are also focused on the

Comment (critique) on the essay of contemporary utopia titled pico

Comment (critique) on the of contemporary utopia titled pico union - Essay Example Grube and Reeve (328b-331b), in their analysis of Plato’s Republic exert further emphasis on egalitarianism, as a crucial aspect of an ideal community. Based on both authors’ perspectives, it is rather apparent that the principal features of an ideal human community include: prevalence of peace, social equality and diligent service to the community, among other positive attributes. The Magnolia Place, located in LA’s Pico Union is indubitably one of the modern models of utopia. The establishment brings together volunteers from the community including regional and administrative organizations, who aim at increasing access, utilization as well as the quality of local resources, utility services, and support for the underprivileged in the area. The Magnolia Place, therefore, strengthens social relations among community members and improves economic development and opportunities. Even though, the neighborhood within which the organization is located was in the past r egarded as the most insecure in Los Angeles, it has developed into a refuge for the people in the region (N.A 1-2). The transformation is a confirmation of More’s ideology that a Utopian society consists of flawed individuals, who choose to make a positive change in their environs. The establishment depicts volunteers’ effort to foster equality, security and peace, through enabling the disadvantaged to get work, healthcare and reasonably priced housing, in addition to other fundamental

Hemingways Writing Style Essay Example for Free

Hemingways Writing Style Essay From almost the beginning of his writing career, Hemingways distinctive style occasioned a great deal of comment and controversy. Basically, his style is simple, direct, and unadorned, probably as a result of his early newspaper training. He avoids the adjective whenever possible, but because he is a master at transmitting emotion without the flowery prose of his Victorian novelist predecessors, the effect is far more telling. In Observations on the Style of Ernest Hemingway, from Contexts of Criticism by Harry Levin (Harvard University Press, 1957), the critic says: Hemingway puts his emphasis on nouns because, among other parts of speech, they come closest to things. Stringing them along by means of conjunctions, he approximates the actual flow of experience. Hemingway has often been described as a master of dialog, and most readers agree, upon being first introduced to his writing, that this is the way these characters would really talk. It is interesting to note, however, that Hemingways one attempt at playwriting was a failure. Actually, a close examination of his dialog will reveal that this is rarely the way people really speak. The effect is accomplished, rather, by the calculated emphasis and repetition which makes us remember what has been said. Since the critics cannot entirely agree on Hemingways style, perhaps the best way is to put it into the authors own words. Shortly before his tragic death, Hemingway gave to the Wisdom Foundation in California a collection of his observations on life and art, love and death. They were published in the January 1963, issue of Playboy magazine, and in them Hemingway said of his writing: I do most of my work in my head. I never begin to write until my ideas are in order. Frequently I recite passages of dialogue as it is being written; the ear is a good censor. I never set down a sentence on paper until I have it so expressed that it will be clear to anyone. Yet, I sometimes think that my style is suggestive rather than direct. The reader must often use his imagination or lose the most subtle part of my thoughts. I take great pains with my work, pruning and revising with a tireless hand. I have the welfare of my creations very much at heart. I cut them with infinite care, and burnish them until they become brilliants. What many another writer would be content to leave in massive proportions, I polish into a tiny gem. Hemingway goes on at some length, but the essence of what he says may be in this paragraph: A writers style should be direct and personal, his imagery rich and earthy, and his words simple and vigorous. The greatest writers have the gift of brilliant brevity, are hard workers, diligent scholars and competent stylists. To explain Hemingways style adequately in a few paragraphs is impossible. Scores of articles, and even some books, have been written on the subject, and it is to these that the serious student should go for additional, more detailed information.

Impact of the Credit Crunch on the Workplace and Politics

Impact of the Credit Crunch on the Workplace and Politics Social World Economy and UK Government Employers, Employees and the Unions Conclusions Bibliography The credit crunch in 2008 is swiftly being followed by an imminent global recession, perhaps the worst recession for many decades. Irresponsible lending, mis-management by the banks, the pay freezes in industry and the general economic climate means that we can no longer take for granted our jobs, homes and financial security. In 2009 the tide is turning from boom, very probably to bust in just a few months, although it was claimed by some analysts that the recession started proper half way through 2008. The situation does not look to improve any time soon either, as Mervyn King, the governor of the Bank of England was cited in the Daily Telegraph of 26th October, 2008: â€Å"The combination of a squeeze on real take-home pay and a decline in the availability of credit poses the risk of a sharp and prolonged slowdown in domestic demand. It now seems likely that the UK economy is entering a recession.† (Jonathan Sibun, Daily Telegraph, 2008). So we see that there can be a number of factors which provide the root cause of a recession. The end result of a recession is not only the loss of business, jobs, reduced cash flow and tightening of financial belts; the social, economic and political impact this has on employers, employees and the government. Employer and employee relationships are also a â€Å"side effect† of the environment within a recession. Does the balance of power change? Do employees become resentful? Do managers become more fearful and does this affect their judgement in the workplace? Many happy and productive workplaces are suddenly â€Å"not so happy† when a credit crunch hits. This paper investigates the implications of a credit crunch on relationships both at the workplace and in the political arena. Social From a social perspective, the effects of the credit crunch are already being evidenced. Housing repossessions are on the increase in the UK and people are having difficulty keeping up with their mortgages. Another factor is that the number of job losses is on the increase and this is expected to continue in 2009. The social impact this has on people is very often not reported by the media. For instance, people who would normally go on holiday with their friends and attend social outings may no longer do so after losing their job. The impact of a credit crunch and recession is inevitably job losses. This affects the person being laid off not only financially, but in terms of self confidence and a feeling of hopelessness for some. Some people after being made redundant may never work again, due to their age or the industry they have worked in, which may be something they have been involved in all their life. The credit crunch affects relationships generally, but also marriages. Husbands try to hold off telling their partners when they lose there jobs. The feeling of failure abounds and it also becomes a shock when it is not possible to find another job immediately. The credit crunch seems to hit men particularly hard, as pride and status play their parts when he has to rely solely on his wife for their main income: Traditionally, the man provides and for a man to lose his job, its not just about money, its loss of status, which can be a huge knock to his confidence.† Steve Miller, cited in (Becky Howard, 2008). It can cause relationship breakdowns as: There is also a real danger that the woman may become angry and resentful (Becky Howard, 2008). This may be due to women become the main breadwinner and also the need to perform duties at home, like cleaning, ironing and other household chores. The Times article points out a number of ways to assist couples through a crisis such as the credit crunch and the loss of a job. The balance of power can shift from an even situation, in a relationship to a dominant partner, when both partners have jobs or in the case of the sole breadwinner, it can cause even more difficulty. World Economy and UK The economic effects are also being seen, as employers are trying to emphasise the importance of pay restraints as companies try to avoid job losses: If employees understand the competitive pressures facing their organisation, they are more likely to understand why pay restraint in the current economic environment is critical. (CIPD, 2008) However, pay is only one of a number of issues. Mortgage repossessions are on the increasing by 40% in the last 12 months (Economics Help, 2008). It is claimed that this is only a small proportion of the total mortgage market in the UK however. In the US loans to sub-prime mortgage markets proved highly risky, and these loans were then embedded into the whole financial system (Economics Help, 2008). This in turn affected the whole of the global capital markets. Hence the world economy is currently in very poor shape. Each country is trying to solve the crisis in their own way, but some countries in Europe are following the UK lead were VAT is concerned, in that they aim to reduce it. On a world level, the economy has probably been in downturn since December 2007. They were predicting then that the economy would have forthcoming problems and so it has been proved. For instance, this report by World Economic Update (2008) states for the US economy: The U.S. economy is already in a recession it started in December 07 and it will last four to six quarters. Negative growth starts in the first quarter of 2008. The former the latter may, I guess, or may not end up being true, but surely its going to be unimpressive. The same article also suggests the economy of the US will be severe and protracted rather than mild. The US is the richest economy in the world, and when something happens on the scale of the current credit crunch it affects the world economy. It is also stated that many emerging markets are not directly affected by the US economy, and these should provide a cushion for the overall world economy, even though the banks of the emerging economies are also tightening their belts. It is stated that countries, such as Brazil, China, Russia, Peru, Poland and Hungary are all in growth stages and not directly affected by the US as they mainly deal with commodities. There has also been a shift away from the US in terms of the commodities markets (World Economic Update, 2008). The question we need to ask are the emerging markets enough to help stave off the imminent recession? The way that emerging markets can assist the global economy is through cheap commodity prices such as metals and agricultural products. Unfortunately however, the price of oil continues to escalate in the light of a world oil shortage. The repercussions of the current financial crisis were discussed by Andrew Watt (2008) when he states that there will be a combination of: â€Å" Share-price collapse Blockages with the banking system Reduced access to bank loans, and More expensive bond financing â€Å" resulting in a reduction in corporate investment, which in turn will have knock-on effects elsewhere. Much can be gleaned from the current crisis for future generations however. Andrew Watt has identified a number of other possible factors which have a bearing on the world economy and the UK. For instance, he points out that there has been a lack of regulatory institutions required for global finance, throughout the world and in Europe. He also claims that income at the national level has moved in that the poor borrow more, and speculation by the rich has made them wealthier. This really is a case of the poor getting poorer, and the rich getting richer. Lack of low interest rates, lack of regulation in the financial sector, risk taking and tax competition; including the EU have also contributed, in his opinion (Andrew Watt, 2008). From this we can assume that although the US crisis was the initial spark, that the petrol was already ready to light in the world economy and so we are all affected by the end result. The following figure from this report shows a summary of the events of the last 12 months or so, resulting in the credit crunch and imminent recession: One affect of the economy the credit crunch has had in the UK is the reduction of house prices and the price of goods in the shops, which have reduced dramatically in the last few months; in order to keep consumers interested thus keeping the finances flowing in the shops. The credit crunch has been blamed on a number of factors, and some unusual ideas emerge from various parts of the world, who all deal with the situation in a different manner. For instance, President Sarkozy has made calls to end foreign ownership (David Charter, 2008). The concern is that key industries will fall into foreign hands. The ideas are that each country should use sovereign wealth funds to take stakes in key industries: â€Å"Nicolas Sarkozy risked blowing apart the European consensus over how to deal with the financial crisis by proposing today that each country launch sovereign wealth funds to take stakes in key industries to stop them falling into foreign hands. â€Å" (David Charter, 2008) The theory is that non-EU countries may take advantage of the current crisis, who are not affected by it and therefore it would enable them to have an advantage in investing in shares within EU industries when they were at their cheapest. Not all the EU countries agree with this approach as stated, but even during his EU presidential year it is debatable if he can win approval from his EU partners. Government From a political perspective, some people will leave the original credit crunch was caused in the US, and this has had a knock-on effect on global economy. One definition of a credit crunch is rapid decline of credit that it is unusually large for a given stage of the business cycle (Bernanke and Lown, 1991). However, one of the key causes of the current credit crunch is said to be irresponsible lending in the US. However, it is fair to say that although the credit crunch originally emanated from the US, that irresponsible lending has also been occuring in the Uk and in Europe, but not on as large a scale. From a political perspective it is being stated that the UK government could have done more to regulate banks who were lending irresponsibly, and that the credit crunch has shown that financial institutions can easily abuse systems of self-regulation. (Economics Help, 2008) A few years ago, house prices were going through the roof, and this bubble would eventually burst, as it inevitably did. Gordon Brown the current prime minister, did identify that this would happen, and as Chancellor of the Exchequer at the time thought the issue had been addressed and avoided a boom and bust scenario, but this was obviously not the case (Alex Barker, 2008). Now that Gordon Brown is the Prime Minister, some of the earlier issues have come back to haunt him. Politically, a credit crunch and recession is always good for the opposition, as they can claim that the current government of the day is to blame for the current economic climate in this country. David Cameron, the leader of the opposition has made this point often, and has stated that the current labour government could have done more to avoid the consequences. Gordon Brown points out that the current crisis is global and has recently instigated a number of steps to avoid the crisis becoming even more serious in 2009. Banks all over the world have been in difficulty all over the world. The collapse of the Lehman Brothers bank in the US was soon followed by a crisis of one of the largest banks in the UK, Halifax Bank of Scotland (HBOS). A recent merger between Lloyds and HBOS will provide a super bank and will avoid HBOS going the same way as Lehman Brothers. The government has supported the merger. Another recent, but risky step is to plough public money in the banking system, and by doing so the government hopes the banks will continue to lend to each other and at least keep the financial syste fluid. Along with this, there has been a reduction in VAT to 15% from 17.5% so that consumers will continue to spend and keep business operating. These are risky measures, and longer term it has been pointed out by David Cameron, that the UK tax payer will have to pay back an increased deficit. Only time time will tell if Gordon Browns policies will enable a swifter recovery or take the UK further into debt. As some analysts point out, this is not a normal situation and extreme situations call for extreme measures. This is certainly the case for Gordon Brown on a political level. Employers, Employees and the Unions One thing is certain in 2009, relationships between employer and employer are sure to be tense in 2009. A survey report was commissioned by the Chartered Institute of Personnel and Development (CIPD) in September, 2008 around this subject. The following table from this report summarises the main issues around employer/employee relationships: So what are the anticipated changes in regard to the effects of the Credit Crunch to employer/employee relations? The following table from the same reports highlights the expected changes: On the face of it, if we analyse the two tables we can see that although most agree that there will be problems in the current credit crisis, that the only potential benefit longer term is that the employers will engage with their employees on an increasing level. However, it is said that there is a contrast of opinion between the public and private services with regard to employee engagement, as: Looking at the results in more detail, however, there is a marked contrast in attitudes between private and public services. In private services, 51% of respondents identified employee engagement as the single most likely development, compared with only 29% in public services and an average across all sectors of 43%. (CIPD,2008) It seems that partnerships with trade unions are very low on the agenda, but again it depends on the sector as: partnership is seen as among the three most likely developments by 46% of respondents in public services but only 11% in private services. (CIPD,2008). The wait and see scenario was also a favourable option. This would make perfect sense seeing as no one yet has a clear picture of how the recession will develop in 2009. So how will all this effect relationships on the shop floor and in the office? Well, cooperation is the key to a successful relationship for both employers and employees alike. It will be the case that in some organisations that job losses will be inevitable, and the unions and employees will be able to do very little as a result. In some cases, it will just be a case of management and unions working together to alleviate the impact as much as possible, and by providing assistance to those employees who will need to be looking for another job or training. In fact, if you have been made unemployed during a recession and there is little likelihood that a new job in the same career will be practical (in some cases), then training during the downturn may be a very good option. The reasoning behind this is that when the economy returns to normal the employee will be better placed to get themselves back on to the job market. Some people may be concerned about the safety of their jobs in 2009, and for very good reason. It is claimed that the indebted young people will be the hardest hit (Iain Macwhirter, 2008). It is claimed that the level of unemployment will have reached 3 million by 2010. It is the â€Å"flexible† labour market which usually receives the initial job losses, such as freelancers and contractors (Iain Macwhirter, 2008). From a company management perspective it is financially sound to fire the expensive contractors first. There is also little complication in doing this legally as there is with permanent employees. However, the sign of a contractor being fired can cause panic amongst the permanent employees in the workplace, as they know that they could easily be next on the list. Ironically, once the dust has settled and companies find themselves short staffed on the upturn it is contractors who are the first back in to assist. Unlike a redundancy situation based on â€Å"last in, first out† it could be said that with contractors and the credit crunch it is a case of â€Å"first out, first in†. The effect of the credit crunch will not only affect the lower level employees, but jobs in banks, and professions i.e. the middle income groups. This will be a real blow to self esteem and confidence to some employees, and it is also something the employers and unions must take into account when wielding the axe in the name of survival. There is no longer a predictable future for anyone, anywhere as a result of the credit crunch. This is emphasised by: â€Å"Certainly, the first to be hit will be those at the bottom. But they are likely to be joined by large numbers of articulate, middle-class individuals shaken out of the financial, media and peripheral service occupations from aroma therapy to management consultancy which have grown up during the long boom.† (Iain Macwhirter, 2008) We have seen that the credit crunch affects everyone from the top down, including governments, large and small organisations and individuals. We have seen the ways in which people can be affected. Governments lose credibility, organisations lose valuable staff, and individuals lose their self esteem and confidence. In analysing the credit crunch we see that although it seems the US problems was the initial spark, it was basically a financial accident waiting to happen, and on a. global scale. However, we have to ask ourselves if the rest of the world can be protected from the mistakes made in the US. Should we all insulate ourselves from this happening on such a large scale again? In looking at possible solutions, we have many suggestions and some of these are risky, but possibly may work. In the UK only time will tell if Gordon Brown’s ideas of ploughing additional funds into the banking system and reducing VAT with lower interest rates will stimulate the economy enough to allow progress through what is sure to be a very difficult period in 2009 and beyond. The surprising thing and perhaps most worrying is how quickly the economy turned from 2007 from what was a relatively economically sound period to its current state. For future generations, much will be learned and there are sure to be large scale changes, especially in the banking sector. More regulation is sure to follow and huge bonuses for some could be a thing of the past. Such is the effect of the current crisis. Journals/Reports Chartered Institute of Personnel and Development (CIPD), Survey Report, 2008  World Economic Update, April 25 2008 available from:  http://www.cfr.org/publication/16111/world_economic_update_rush_transcript_federal_news_service.html Andrew Watt, The economic and financial crisis: dealing with the  repercussions and the causes./ Presentation to ETUI Seminar ‘The economic and financial crisis: Elements to construct a new paradigm’ 8 December  2008 Bernanke, Ben S., and Cara S. Lown (1991), â€Å"The  Credit Crunch,† Brookings Papers on Economic  Activity, no. 2: 205-47. Newspapers Iain Macwhirter, New Statesman  Economy, How safe is your job?  Published 27 November 2008 available from:  http://www.newstatesman.com/economy/2008/11/middle-class-labour-jobs Jonathon Sibun, UK Recession is here to stay experts warn, Daily Telegraph Online, 10/2008 available from:  http://www.telegraph.co.uk/finance/economics/3259483/UK-recession-is-here-to-stay-experts-warn.html Becky Howard, The credit crunch hits relationships and marriages,  Times Online, December 6, 2008 available from:  http://women.timesonline.co.uk/tol/life_and_style/women/body_and_soul/article5292365.ece David Charter, From Times Online October 21, 2008,  Sarkozy calls for halt to foreign ownership available from:  http://business.timesonline.co.uk/tol/business/economics/article4984670.ece Internet Economics Help, Who is to Blame for Credit Crunch? 2008, accessed on 03/01/2009 available from: http://www.economicshelp.org/2008/08/who-is-to-blame-for-credit-crunch.html Alex Barker, Asleep at the Wheel? ,December 15th, 2008 by Alex Barker accessed on 03/01/2009 available from:  http://blogs.ft.com/westminster/category/credit-crunch/

Procrastination Essay -- essays research papers

1. What am I talking about? I am the thief of productiveness and time. I sound simple, but in fact I’m quite complex. I am a strange phenomenon. My purpose seems to make my life more pleasant, but instead it almost always adds stress, disorganization, and frequent failure. I want to achieve some outcome, usually something myself and others can value and respect; â€Å"I’ve got to start.† I delay briefly thinking of real and imagined advantages of starting to change later; â€Å"I will do it tomorrow.† 2. Good evening gentlemen. My name is Bobby Hurley. I’ve been in the military now for just over nine years. All this time I’ve always said that I’m going to finish my degree but until this past year I have never been able to stay committed to doing so because I am a procrastinator. I’ve gotten some help with my procrastination from various web sites. That’s why this evening I would like to talk to you about three important aspects of procrastination. These include the reasons for procrastinating, some symptoms of procrastination, and how to cure procrastination, but first, let me explain what procrastination is. Procrastination, though not officially classified as such, is a complex psychological behavior that affects everyone to some degree or another and can have roots in several officially recognized "illnesses", such as phobia, depression, and even low self-esteem. For some people it can be a minor problem but with others it is a source of considerable stress and anxiety. 3. This brings me to my first point, reasons for procrastinating. One reason for this is poor time management. What this is, is not being able to manage your day or yourself effectively. You may be uncertain of your priorities, goals and objectives or may be overwhelmed with the task. As a result, you may put off your academic assignments for a later date. You may also spend a great deal of time with your friends and social activities. Lastly, but most importantly, you worry about your upcoming examinations, class projects or papers rather than completing or studding for them. 4. Another cause of procrastination is having difficulty concentrating. What this is, is your inability to stay focused on one subject or object for any length of time. When you sit at your desk y... ...er projects, use a timer or alarm clock to help you stick with your plan. If you know you will not be able to concentrate on a project for 3 hours, break up your work into 1-hour blocks for 3 days. It's much easier to face an unpleasant task if the time you are giving it is brief. 9. Another method to cure procrastination is to avoid perfectionism. If you accept nothing less than a perfect performance, you may never get to work on a task because you're worried that it won't be perfect. Remember that doing your best is fine, and that giving yourself enough time to do your best will reduce stress. 10. In conclusion, I have covered three important aspects of procrastination to include the reasons for procrastinating, the symptoms of procrastination, and how to cure procrastination. I’d like to thank you for your time and attention and urge you the next time you’re thinking about putting off an assignment or task to think carefully about the long-term side effects. Sure, you might get some good grades or praise from your boss or teacher but eventually it will catch up with you and by that time it will be too late. Thank you.

Citi Group Restructuring

Background It all began with the financial crisis of 2007-2008, a crisis which was of a scale that had never been seen before. Many economists called it even worse than the Great Depression. Whether it was or not, that’s something that could be argued. But everyone was of the view that the crisis is really very serious. As a result of it large financial institutions collapsed, banks were being bailed out by the national governments and stock markets tanked to their new lows.This caused the collapse of housing markets in many countries, consumer spending suffered immensely as a result, industries went bankrupt, businesses closed down and unemployment peaked. There were many reasons that were put forth by various economists. A report presented in the US senate called it as the â€Å"failure of regulators, credit agencies and markets†. Citigroup’s Sufferings According to a US government’s report which came into the light in 2011, Citigroup which was the third largest US bank in terms of assets at that time was on the verge of failure.Regulators were going to pull the plugs on it anytime as depositors were withdrawing their deposits and bank’s counterparties also declined to give credits to the bank. How Citigroup moved to new setup? Citigroup suffered losses for five consecutive quarters. In the fifth quarter, in fact its losses were to the tune of $ 8. 29 billion. Many in the Citigroup agreed to the fact that unless something is done to sharpen its strategy, Citigroup will never regain its glory and perform accordingly.As a result, Citigroup started analyzing its business and strategies. It was found that Citigroup was involved in too many business segments which stopped it from focusing on its core interest area. While analyzing, everything big or small was examined. Citigroup in its annual report called the analysis as â€Å"wide ranging and dispassionate†. The outcome of this analysis was that the Citigroup finally dec ided to realign the group’s various business interests in two broad segments: Citicorp and Citi Holdings.The thinking behind this new setup was that this structure will help the company focus on its core business areas which in turn would improve the overall performance, while at the same time realizing the value from its non-core assets. The new structure would look like this: In Citicorp, businesses which were core to the group’s strategy and which offered maximum earnings potential to its shareholders with appropriate risk parameters were placed. These businesses are: †¢ Global Transaction Services – Treasury and Trade Solutions Securities and Fund Services †¢ Securities and Banking – Global Banking – Global Markets – Citi Private Bank – Citi Capital Advisors †¢ Regional Consumer Banking – Four Regional Consumer Banks in North America, EMEA (Europe, Middle East, and Africa), Latin America and Asia that each in clude retail banking, local commercial banking and Citi-branded cards (Source: http://www. citigroup. com/citi/investor/quarterly/2010) Citicorp, according to the new structure will be a relationship driven global bank, to serve both consumers and businesses.The assets of Citicorp include its core assets located across the globe with strong presence in emerging markets like India, China etc. Citicorp will have the capability to take deposits from customers throughout the world in a manner so that maximum return could be availed. Citicorp will have the capacity to serve local customers globally and global customers in a highly localized way. While in Citi Holdings, assets and businesses which were not central to Citi’s strategy were placed.But that does not mean that those assets were not good. Some have had very high value in their own right. Some were big iconic brands like Morgan Stanley Smith Barney joint venture. Citi Holdings includes: †¢ Brokerage and Asset Managem ent, which includes the Morgan Stanley Smith Barney joint venture †¢ Local Consumer Lending – North America, which includes residential and commercial real estate loans; auto, student and personal loans; and retail partner cards International, which includes Western Europe consumer banking and other consumer finance franchises around the world †¢ Special Asset Pool, which includes non-core assets, many of which are illiquid in current markets Citi Holdings will consist of non-core businesses which attract long term investments. But since those businesses are not the core one, therefore they do not enhance the performance of the group as a whole and in fact they compete for the limited resources that the company could employ in a highly risky and volatile situation.It was expected that the management team of Citi Holdings will restructure, divest and manage its business in a way that maximizes the value and will take the group forward in a tough economic situation Vi kram Pandit, then CEO of Citigroup in one of his interview talked about â€Å"accelerating the implementation of its newly evolved strategy to focus on its core business†. Given the market conditions and business sentiments, Vikram Pandit wanted to streamline the business of Citigroup as soon as possible to further strengthen its position and better serve its clients.