Business Plan

In the Citibank Indonesia case, you're putting yourself in the position of Mehli Mistri, Citibank's Indonesia country manager, in 1984 (I know, a very long time ago). Mehli feels that he has put together a very aggressive bottoms-up budget plan for his organization, yet Corporate HQ demands a higher profit target from Citibank Indonesia.

Mehli essentially faces four options:

1. Accept the increased target. If he accepts the increased corporate target, he can

a. increase the amount lent

b. make the portfolio riskier

c. hope for luck!

2. Reject the corporate target.

In exploring these alternatives, there are a number of issues that can be raised:

1. Does Citibank need a long term plan (currently it does not have one)? Are long-term plans useful in periods of high uncertainty?

2. Citibank does have long term goals, but are these helpful or hurtful? Should they change over time?

3. Is there a danger that this last minute "tops-down" goal setting process will cause a loss of commitment to the goal?

4. What risks might country managers like Mehli take to meet these short-term commitments? Will these potential actions hurt Citibank's long term? Specifically, you may want to consider how Mehli would look at Citibank Indonesia's low-earning loans to the government. Alternatively, examine the consequences if Mehli would make more risky loans, or more loans in general.

5. Does "top down" goal-setting create a culture of sand-bagging?

6. What