The Citibank case study details the proposed acquisition of Associates First Capital Corporation by Citigroup. It tells a bit about the CEO of Citigroup and his background, interests, and view towards the acquisition. While the case study offers no explicit questions about how handling the merger, the news reports and alternative perspectives on the case suggest a few lines of inquiry. The executives at must account for a variety of problems and possibilities. These concerns will guide my evaluation of the case, particularly regarding the steps that should be taken and avoided by the executives in the merger. Since it seems that the acquisition is not able to be undone, I will proceed as if it is inevitable and offer some observations regarding how to best acquire and manage Associates First Capital Corporation.

In the first place, the case study reveals a concern about the reputation of Associates First Capital Corporation (AFCC). It holds a track record of problematic relationships both with clients and the wider public business world. As a bit of background, a sub prime lending company will lend to those who fall below the typical qualifying threshold for regular bank loans. Thus, the clients are high risk, in the sense that they do not have a credible history of financial borrowing, but they also provide the potential for the sub prime lender to swindle money. For if when they charge a client for failing to pay their loan back, then the company, such as AFCC can make money. And with clients who do not have a good record of paying money back, this makes such fees likely.

Thus, the case study mentions this method and claims that some people have targeted AFCC as such a company, one that preys on these less than credible clients who need money but regularly fail to pay it back. I want to highlight not the ethical issue at hand but the business matter of reputation. Such a public report attacking AFCC does not bode well for any company. Regardless of how true it is, the accusation stands and AFCC must deal with it. This bears significance for the case study because Citigroup must account for such a reputation. They do not acquire a neutral company, one without any record, whether positive or negative. On the contrary, they acquire a company with a clear reputation and background. And neither will AFCC’s reputation be wiped clean just because it now falls under the ownership of Citigroup. The entire case study underscores the risk and the potential problems associated with acquiring a company with a poor reputation.

The executives at Citigroup should formulate a plan for remedying the image of AFCC and also retaining the positive reputation of Citigroup. The final quote suggests a noble approach to this action plan. For Citigroup claims to “lead by example.” They hope to clean up the reputation of AFCC by acquiring them and taking whatever steps necessary to reestablish an ethical and reputable company. This is a bold and maybe wise approach, but the permanency of image in the business world should not be overlooked.

Citigroup should also take warning with regard to the size of their acquisition. They boast about being the largest consumer financial group, after merging with AFCC. However, this assumes that bigger is better. Such a status often is better, but not always. For as the largest group, Citigroup will have no models by which to imitate or learn from. All other companies will be smaller and thus not prime cases for knowing how to manage such a large company, whether in terms of assets or human resources or methods of change. The case study holds many more observations and questions, but these brief insights provide key points of evaluation regarding the Citibank Subprime Case Study.