Citigroup in Post WTO China
China entered into the World Trade Organization with the promise that foreign financial institutions would be permitted to operate through China (harvardbusinessonline.hbsp.harvard.edu). Citigroup had previously experienced operational success and a competitive advantage in many other Asian countries and now looked to experience the same type of success in China. How Citigroup adapted to the Chinese governmental and business environments would play a critical role in shaping the company's expansion into the Chinese market.
There are numerous reasons that would make it difficult for Citigroup to adapt to the Chinese environment. First, Citigroup would have to overcome numerous human resources obstacles. Citigroup held true to its belief in hiring local employees. As a result, over 95% of Citigroup's employees in foreign markets were local. However, as China lagged behind in its business administration curricula, Citigroup would have to spend a longer time training local employees. Furthermore, as Citigroup completed training of workers many left for jobs with other competing financial institutions.
Next, lagging telecom in China could possibly make it difficult for Citigroup to adapt to the Chinese environment. Citigroup had a vast array of e-commerce options the company offered to its customers and employees. There was a prevailing sentiment that China's lagging telecom industry would make it extremely difficult for the company to utilize its e-commerce competitive advantage. This potential e-commerce dilemma would make it hard for Citigroup to adapt its operations to the Chinese environment.
Finally Citigroup's reluctance to enter into joint ventures would make it hard for the company to adapt to the Chinese en ...