Citibank Indonesia - 1224 Words

Case 1: Citibank Indonesia 1. Citibank’s budgeting process is based on a bottom-up method. It is not compromised of specific goals to be attained by individual operating units, but is composed for the corporation as a whole. Citibank was aiming for long-term goals, which call for profit growth of 12-15% per year, 1.25% return on assets, and 20% return on equity. These standards are set for the entire company, and individual sectors, such as international branches, usually set their own higher goals because they expect to exceed the norms. Headquarters send out budget instructions mid-year with all the financial information from January through June. It is the operating manager’s job to prepare a forecast for the remaining period of the†¦show more content†¦One is just to accept the changes and increase the budget. He would have to adapt to the new budget realizing the risks associated have to be taken. Another possibility is to reduce to a minimum Citibank’s loans to government or private enterprises because of lower returns. Also, he could increase the loan amounts given to commercial enterprises to boost profits. Mr. Mistri could talk with Mr. Gibson and negotiate a better budget based on further information of the current conditions. Last option would be to reject the proposed budget and continue pursuing the current budget. This method may cause problems between management and is not favorable. 4. Mr. Gibson needs to set up meetings among subordinate managers and take into consideration more factors, such as sovereign and return risks, market conditions, and employee turnover ratios, to appropriately allocate the $4 million. Managers need to communicate at all levels in order gain insight of all the aspects of the situation through several discussions and negotiations. Mr. Mistri and other country managers should be been given a chance to give their feedback on the newly purposed budget. In this way, a more informative budget can be processed that better represents future expectations of the company that has its own unique situations. Mr. Gibson could better allocate the budgeting objectives between the countries by evaluating and incorporating sovereign and return risksShow MoreRelatedShould Citibank Launch The Card Product? Why Or Why Not?1239 Words   |  5 Pages1-) Should Citibank launch the card product? Why or why not? Citibank has established its consumer business in Asia over a period of eleven years and they have projected themselves in fifteen different countries as a prestigious, consumer oriented international bank and also as the undisputed leader in most marketplaces. Rana Talwar, the head of Citibank’s Asia Pacific Consumer Bank is now considering if they should launch a new product, which is a credit card (1). 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