Sandy Weill and Citigroup
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Case Details:
Case Code : BSTR103
Case Length : 12 Pages
Period : 1998 - 2004
Organization : Citigroup Inc
Pub Date : 2004
Teaching Note : Available
Countries : USA
Industry : Media & Advertising
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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EXCERPTS
Weill-The Leader
Weill was always very focused on what he wanted. He put before himself definite goals which he sought to accomplish. Throughout his career, he aimed at doubling the company's earnings every five years, which translated to around 15% growth each year. And surprisingly, he had been able to achieve this ambitious goal.
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In the case of Citigroup, he settled for single digit growth every year, as Citigroup was too big to grow so fast. He used messages like, "Make your numbers; do what you've promised; work together; think shareholder value" to motivate his subordinates to achieve the goals.
Weill believed strongly in creating value for shareholders. Most of the acquisitions he made benefited the company's shareholders. When Travelers acquired Salomon in 1997, Warren Buffet said, "Over the decades, Sandy has demonstrated genius in creating huge value for his shareholders by skillfully blending and managing acquisitions in the financial services industry. In my view, Salomon will be no exception..."
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The Dealmaker
Weill had a knack for acquisitions. He chose acquisitions as a strategy for growth, rather than attempting organic growth. (Refer Exhibit II). Weill acquired a reputation as a cultivated dealmaker as he always succeeded in his attempts to acquire both big reputed companies as well as smaller companies.
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Weill had a unique ability to identify firms with high growth potential or a good brand name that would be worth acquiring.
Throughout his career, he made several deals and every time a deal was made, he made sure that everything went fine and there was transparency in the process The deals were designed to give a win-win feeling to both parties. After acquiring a company, Weill worked towards realizing the synergies.
He cut costs by laying off people, closed down unprofitable businesses, and integrated the operations. After the Citicorp-Travelers merger, Citigroup slashed 10,400 jobs worldwide, i.e. 6.5% of Citigroup's global workforce... |
Excerpts Contd... >>
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