Portrays a predicament confronted by Citibank's nation director for Indonesia. His bosses have requested that he raise his benefit objective for 1984. However, to deliver expanded benefits he would either need to lessen the sum loaned at underneath business sector rates, especially to prime clients and government substances, or to build the bank's sovereign danger at the season of a downturn in the Indonesian economy. The objective is to delineate the part of nation chiefs and a portion of the troublesome tradeoffs they confront.
1. How does the Citibank budgeting process work?
2. Is this a participative budgeting process? Is participative budgeting consistent with decentralized planning?
3. What challenges does Mistri face?
4. How did Mistri feel about the budget he submitted?
5. What precautions did Mistri take concerning sovereign risk?
6. How should Gibson allocate the $4 million increase in profits that he has committed to?
7. How might Citibank discourage Mistri and other country managers from taking actions to meet their short-term goals at the expense of Citibank's long-term good?