“Involvement in the setting of budget targets enhances the focal manager’s commitment to achieve the target. Those who are actively involved in the process of setting their performance targets are more likely to understand why the targets were set at the levels they were, so they are more likely to accept targets and be committed to achieve them.” (Merchant and Van der Stede, page 317)
(a) Critically evaluate the above statement in the context of the merits and demerits of ‘bottom-up’ and ‘top-down’ budgeting approaches through providing evidence from literature.
(b) Refer to the case of Citibank Indonesia. Based on your analyses in 1(a) above, do you think Mr. Mehli Mistri and his subordinates will be committed to achieve the budget target? Explain.
“Highly achievable budget targets reduce the risk of gameplaying. The stakes associated with budget achievement in most firms, which include bonuses, promotions, and job security, are so significant that managers who are in danger of failing to achieve their budget targets have powerful motivations to play games, either with the numbers or through foolhardy decisions.” (Merchant and Van der Stede, page 316)
(a) Critically evaluate the above statement through providing evidence from literature.
(b) Refer to the case of Citibank Indonesia. Based on your analyses in 2 (a) above, do you think Mr. Mehli Mistri and his subordinates will be involved in gameplaying activities? Explain.
(Word limit excludes bibliography/reference list. Strict penalty will apply for exceeding word limits excessively)
Take home group assignment – research based case study report:
This is a compulsory assessment item. Students failing to submit the case study report will be
awarded a fail grade (NC) for the unit.
Case: Citibank Indonesia, textbook page 323.
Assignment marking criteria:
Your work will be assessed on the following basis:
•?Knowledge, understanding and application of management control concepts as explained and
discussed in the unit (30%).
•?Critical analysis of the management control issues raised in the questions (30%).
•?Research, inquiry and analytical skills including appropriate referencing skills (20%).
•?Effective communication (20%).
You must cite at least five research-based articles (published in peer-reviewed journals) in your
critical analyses of the case questions to fulfil the minimum requirement of ‘research and inquiry
skills’ marking criteria (above). References from textbooks and/or article published in non-peerreviewed
Internet sources will not meet these criteria. For referencing in the assignment you must use
the author/year system (also known as the Harvard system). Please note that the UC Library has
publications and material on its website about referencing.
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