Citigroup Crisis Management and Continuity Plan Essay

Citigroup Crisis Management and Continuity Plan - Essay Example The economic crisis in the recent years had a significant impact over the nation thus impacting the businesses of the Citigroup as well. The current research focuses on the responses of the organizational group to the economic crisis and to learn the concepts and use of business management continuity plans in the process. Citigroup and the Global Economic Recession: The global economic recession that hit the United States in the late 2008 and thereafter the entire world affected the nation’s gross domestic product, led to unemployment, decrease in purchases, and decline in investments (U.S. Economic Downturn Worsened at End of 2008, 2009). Root Cause of the Recession leading Citigroup to a Crisis Situation: With the enhancement of the economic slowdown in the United States, the Citigroup started getting affected and was encountered with the crisis of recession. One of the major crises that led to the crisis in the Citigroup was the decline in the demand level among the custome rs. When a financial slowdown was prevailing in the United States, people tended to invest less and save their funds. When the nation was encountered with the decline in the economic growth, customers feared the failure or lack of performance of the different companies that included Citigroup as well. With scarcity in the availability of funds in the economy of the country customers started saving and stopped investing or lending to the company that ultimately led to a crisis for the company (Beek, 2010; Cochrane, 2010, p. 34). Thus the two primary reasons that could be reflected as the root causes for the crisis in the Citigroup are the economic slowdown in the United States followed by the change in the customer outlook and behavior towards fearing the failure of companies to overcome the global crisis, leading to huge declines in the levels of demand. Citigroup before the Crisis: Before the global recession had hit the United States, Citigroup had been successfully performing its activities. Several innovative strategies have been encouraged within the group. Also, with greater expansion plans the company created several job opportunities (Our commitment is our promise, 2006). The year 2007, which was before the economic crisis, the company reflected positive results with respect to its international consumer related performances, wealth management at an international level, as well as operations of services in its different business divisions. However, the results for the banking and marketing segments of the group were not satisfactory. Too much of lending and written down values might have led to such a condition for the group. The revenue generation was thus affected although the customer growth was increasing. The volume of products and the operating expenses of the group also started rising from the previous years. Credit costs for the financial sector of the group also increased (Citigroup’s 2007 Annual Report on Form 10-K, 2007). Citigroup du ring the Crisis: During the global economic slowdown, the Citigroup suffered huge losses that primarily occurred as a result of increasing costs of credits and the intensifying economic recession. Inflation and increasing levels of unemployment, that were resultant from the global econom