XAT 2012 Question 57


on the basis of the information given in the following case.

Saral Co. is operating in seven north-eastern states of the country. The organization has a history of participative decision making, wherein people deliberate openly about pros and cons of every important decision, and a broad consensus is taken before taking the final decision. In Saral Co. every employee gets a salary proportional to the sales achieved. A new General Manager (GM) joined during the beginning of this month and challenged the organization’s sole focus on sales to determine salaries. He urged the top management to include two more additional parameters in determining the salaries of the employees, viz. collection of information about competitors and the quality of relationship with the retailers.

Question 57

The top management of Saral Co. refused to implement the proposal of new GM from the beginning of next month, which of the following could be the most justified reason for the management’s refusal?


Because of the General manager's lack of understanding of the environment of the company, it would be wrong to implement his idea in the very next month. Assessment of the potential of the idea and arriving at a consensus on the policy are the most plausible for their refusal.

Thus, the correct option is E.

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