Decision Making

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Theory

XAT paper consists of a separate section of decision making with its separate cut-off. Most students complain that the decision making portion is quite difficult. But if we carefully analyze this subject, most of the questions are based on logic and common-sense with very few questions being extremely difficult. The key to scoring well in this section is to limit the number of attempts to those you are reasonably sure about. There are 21-25 questions asked in this section with the cut-off of 8-10 marks. So with this type of cut-off, students should attempt very cautiously.

Tip

The very first point to remember while attempting decision making is to read the paragraph and the options very carefully.

Tip

Try eliminating options rather than selecting the right answer. In this way you would be able to improve your chances of choosing the correct answer.

Tip

Do not assume any facts unless stated in the paragraph.

Tip

Do not attempt the question if you are not reasonably sure about the answer. As you have to get only 8-10 marks out of 21 you can be selective about the questions you attempt.

Tip

If you feel that two or more options are plausible in the given situation, select the best out of those options. Remember this section is created to test your decision making ability when you are under pressure. Mark the answers very carefully.

Solved Example

Rajinder Singh was 32 years old from the small town of Bhathinda, Punjab. Most of the families living there had middle class incomes, with about 10% of the population living below the poverty level. The population consisted of 10 percent small traders, 30 percent farmers, besides others. Rajinder liked growing up in Bhathinda, where people knew and cared about each other. Even as a youngster it was clear that Rajinder was smart and ambitious. Neighbors would often say, "Someday you're going to make us proud!" He always had a job growing up at Singh's General Store - Uncle Balwant's store. Balwant was a well intentioned person. Rajinder loved being at the store and not just because Balwant paid him well. He liked helping customers, most of who were known by the nicknames. Setting up displays and changing the merchandise for different seasons and holidays was always exciting. Uncle Balwant had one child and off late, his interest in business had declined. But he had taught Rajinder 'the ins and outs of retailing'. He had taught Rajinder everything, including ordering merchandise, putting on a sale, customer relations, and keeping the books. The best part about working at the store was Balwant himself. Balwant loved the store as much as Rajinder did. Balwant had set up the store with a mission to make sure his neighbors got everything they needed at a fair price. He carried a wide variety of goods, based on the needs of the community. If you needed a snow shovel or piece of jewelry for your wife, it was no problem - Singh's had it all. Rajinder was impressed by Balwant's way of handling and caring for customers. If somebody was going through "hard times", Balwant somehow knew it. When they came into the store, Balwant would make them feel comfortable, and say something like, "you know Jaswant, let's put everything on credit today". This kind of generosity made it easy to understand why Balwant was loved and respected throughout the community.
Rajinder grew up and went to school and college in Bhathinda. Later on, he made it to an MBA program in Delhi. Rajinder did well in the MBA course and was goal oriented. After first year of his MBA, the career advisor and Balwant advised Rajinder for an internship at Bigmart. That summer, Rajinder was amazed by the breadth and comprehensiveness of the internship experience. Rajinder got inspired by the life story of the founder of Bigmart, and the values the founder held. Bigmart was one of the best companies in the world.
The people that Rajinder worked for at Bigmart during the internship noticed Rajinder's work ethic, knowledge, and enthusiasm for the business. Before the summer ended, Rajinder had been offered a job as a Management Trainee by Bigmart, to start upon graduation. Balwant was happy to see Rajinder succeed.
Even for Rajinder, this was a dream job - holding the opportunity to move up the ranks in a big company. Rajinder did indeed move up the ranks quickly, from management trainee, to assistant store manager, to store manager, to supervising manager of three stores, to the present position - Real Estate Manager, North India. This job involved locating new sites within targeted locations and community relations. One day Rajinder was eagerly looking forward to the next assignment. When he received email for the same, his world came crashing down. He was asked to identify next site in Bhathinda. It was not that Rajinder didn't believe in Bigmart's expansion. What was printed in the popular press, especially the business press, only reinforced Rajinder's belief in Bigmart. An executive viewed as one of the wisest business persons in the world was quoted as saying, "Bigmart had been a major force in improving the quality of life for the average consumer around the world, offering great prices on goods, giving them one stop solution for almost everything." Many big farmers also benefitted as Bigmart's supply chain facilities helped reducing the waste. Consumers also benefitted through low prices, as middlemen were removed. At the same time, Rajinder knew that opening a new Bigmart could disrupt small businesses in Bhathinda. Some local stores in small towns often went out of business within a year of the Bigmart's opening. In Bhathinda, one of those local stores was Singh's, now run by Balwant's son, although Balwant still came in every day to "straighten out the merchandise." As Rajinder thought about this assignment, depression set in, and nightmares followed. Rajinder was frozen in time and space. Rajinder's nightmares involved Balwant screaming something - although Rajinder could not make out what Balwant was saying. This especially troubled Rajinder, since Balwant never raised his voice. Rajinder didn't know what to do - who might be helpful? Rajinder's spouse, who was a housewife? Maybe talking it through could lead to some positive course of action. Rajinder's boss? Would Bigmart understand? Could Rajinder really disclose the conflict without fear? Uncle Balwant? Should Rajinder disclose the situation and ask for advice? He wanted a solution that would make all stakeholders happy.


Question 1: Who is the best person for Rajinder to talk to?
a: Wife
b: Boss
c: Let time take its own course
d: Balwant
e: None of these

Explanation: The main cause of Rajinder’s dilemma is his loyalty to Balwant. Rajinder is torn between his sense of responsibility to his job and his belief that by doing his job he would be betraying Balwant. In this case, Rajinder should speak to Balwant and clear things up.


Question 2: After deliberation with many people and a lot of research, Rajinder came across a study published in leading journal, which stated that most local farmers benefited because Bigmart bought agricultural produce directly from the farmers. Which of the following actions would you prefer Rajinder to take, after he got this fresh information?
a: Since farmers benefit from Bigmart's presence, Rajinder should be happy with Bigmart's presence in Bhathinda.
b:Rajinder should undertake a new study to find out influence of Bigmart on local farmers.
c:Rajinder should see this as an opportunity to take concerns of local traders to the top management of Bigmart in India. It may help Bigmart to develop new solutions that can benefit Bigmart, retailers, farmers and consumers.
d:Quit job at Bigmart and start another big retail chain to compete with Bigmart.
e:Request his boss to transfer him to a new location, which has a low percentage of mom and pop stores. This would reduce Rajnder's discomfort.

Explanation: Rajinder should take this opportunity to raise the concerns of local traders. The main cause behind Rajinder’s dilemma is that he believes that by opening a Bigmart he would be driving Uncle Balwant out of business. If the piece of information regarding local farmers is true then there is a possibility that Bigmart can find a solution that helps not just customers and farmers but also local traders and retailers like Uncle Balwant. We can eliminate options a and b as Rajinder’s main concern is retailers like Balwant and not the farmers. Rajinder likes his job and has shown commitment to it - hence we can eliminate options d and e. Hence, option C.


Question 3: Which is the right ascending order, in terms of proportion of population, benefitting from Bigmart, in and around Bhathinda?
a: Consumers, farmers, retailers
b: Farmers, consumers, retailers
c: Retailers, farmers, consumers
d: Farmers, retailers, consumers
e: Consumers, retailers, farmers

Explanation: The presence of big players like Bigmart negatively affects the business of retailers. Hence, they are least likely to benefit from Bigmart. Farmers are not directly competing with Bigmart and hence it is less likely that Bigmart would negatively impact them. It is given in the passage that consumers benefit from the entry of Bigmart and their quality of life improves. Moreover, the population size of consumers is greater than that of farmers and retailers. Hence, the list in ascending order should be retailers, farmers and consumers.

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