List of top Decision Making Questions on Caselets asked in XAT

Caselet (Questions 97-100): Om Chowdhury was one of the supervisors in the Fire and Safety (F&S) department of Maqsood Textile Mills. He was a distant cousin of Mr. Bhiwani, the General Manager (Personnel & Administration), and the Personnel and Administration department handled all personnel-related decisions. It was often rumored that Om had gotten the job because of his cousin's influence. Om, however, was careful in his work and never gave anyone a reason to complain. He was known to be a quiet man who kept to himself and his duties.

All F&S supervisors reported to Mr. Rabindra, the shop-floor manager. The mill ran on a three-shift basis, and Rabindra allotted supervisors to the different shifts. Supervisors had to stay present through the whole shift and run scheduled checks on the machinery and firefighting equipment. For some reason, Rabindra kept assigning Om to the night shift more often than the other supervisors. Om never objected to this, while the other supervisors often pleaded with Rabindra to be given day shifts instead. Staying awake and alert through the night shift was one of the hardest parts of the job.

After a while, Rabindra noticed that Om seemed indifferent to his work. Twice he found Om missing from his cabin, and others told him Om had been seen wandering different parts of the shop floor. Rabindra called Om in and reminded him of his responsibilities. Om did not argue and promised not to be careless again. Rabindra also raised the matter with Mr. Bhiwani, who called Om in for a personal talk and reminded him that their family tie made the situation awkward for everyone. Om agreed to improve, and soon he became a model supervisor, even going out of his way to help employees with their problems.

Three months later, Rabindra visited the plant at night and, looking into the F&S office, found Om playing solitaire on the office computer. Rabindra fired Om on the spot.

The next morning, Mr. Bhiwani called Rabindra and asked how he could fire an employee like that, and suggested he reconsider the dismissal. Rabindra replied, "This decision has already been made. There will be no turning back."

Question: Of the options below, which could have been a better response from Mr. Rabindra when he saw Om playing solitaire?

Caselet (Questions 101-104): Shekhar, an MBA from Singapore, returned to his hometown of Jamshedpur. Jamshedpur had a population of 10 lacs and one of the highest per capita incomes among Indian cities. Shekhar loved music. While listening to his favourite song on satellite radio one day, he wondered if he could combine his passion with a business. A few weeks later, by coincidence, Music World called for expressions of interest from potential franchisees. Jamshedpur did not have a single good music store where residents could buy quality, variety, and the latest releases.

Music World wanted its franchisees to own at least 1200 square feet of space and invest Rs. 30 lacs. Profits were to be split in the ratio of 3:7 between Music World and the franchisee. Shekhar liked the idea of working with a well-known brand, but he worried whether Rs. 30 lacs was too much money to put in. He did not have the full amount and was thinking of borrowing from a bank. He checked with other Music World franchisees in towns like Patna and Ranchi, expecting similar footfall in Jamshedpur. A franchisee in Patna reported monthly sales revenue of Rs. 1 to 2 lacs, with a profit margin of 25 to 30 percent. Satisfied with this, Shekhar decided to go ahead.

He then began looking for space. Jamshedpur had three main areas: Bistupur, Sakchi, and Sonari, all connected by good roads. Bistupur was a business area with most of the high-end retail stores, shopped at by the upper-middle and higher classes, and was also the city's education hub. Sakchi was a growing lower-middle-class business area, while Sonari was mostly residential.

Shekhar preferred Bistupur, since it was where he did his own shopping. But he ran into problems there: space was hard to find, and rentals had touched Rs. 30 to 40 per square foot per month, compared to Rs. 15 to 20 per square foot per month in Sakchi and Sonari. A friend who lived in Sakchi told him that several branded outlets were opening up there, and that it looked like the fastest-growing market in Jamshedpur with the highest share of teenagers. Still, Shekhar was against Sakchi because of its "downmarket" image. He wanted to target the college-going crowd, and he expected to find them in Bistupur.

The high real-estate cost in Bistupur, set against his low opinion of the Sakchi market, left Shekhar confused. To think the decision through properly, he decided to drive down the Jamshedpur-Ranchi highway in his newly bought car.

Question: How best should Shekhar resolve his confusion?

Caselet (Questions 101-104): Shekhar, an MBA from Singapore, returned to his hometown of Jamshedpur. Jamshedpur had a population of 10 lacs and one of the highest per capita incomes among Indian cities. Shekhar loved music. While listening to his favourite song on satellite radio one day, he wondered if he could combine his passion with a business. A few weeks later, by coincidence, Music World called for expressions of interest from potential franchisees. Jamshedpur did not have a single good music store where residents could buy quality, variety, and the latest releases.

Music World wanted its franchisees to own at least 1200 square feet of space and invest Rs. 30 lacs. Profits were to be split in the ratio of 3:7 between Music World and the franchisee. Shekhar liked the idea of working with a well-known brand, but he worried whether Rs. 30 lacs was too much money to put in. He did not have the full amount and was thinking of borrowing from a bank. He checked with other Music World franchisees in towns like Patna and Ranchi, expecting similar footfall in Jamshedpur. A franchisee in Patna reported monthly sales revenue of Rs. 1 to 2 lacs, with a profit margin of 25 to 30 percent. Satisfied with this, Shekhar decided to go ahead.

He then began looking for space. Jamshedpur had three main areas: Bistupur, Sakchi, and Sonari, all connected by good roads. Bistupur was a business area with most of the high-end retail stores, shopped at by the upper-middle and higher classes, and was also the city's education hub. Sakchi was a growing lower-middle-class business area, while Sonari was mostly residential.

Shekhar preferred Bistupur, since it was where he did his own shopping. But he ran into problems there: space was hard to find, and rentals had touched Rs. 30 to 40 per square foot per month, compared to Rs. 15 to 20 per square foot per month in Sakchi and Sonari. A friend who lived in Sakchi told him that several branded outlets were opening up there, and that it looked like the fastest-growing market in Jamshedpur with the highest share of teenagers. Still, Shekhar was against Sakchi because of its "downmarket" image. He wanted to target the college-going crowd, and he expected to find them in Bistupur.

The high real-estate cost in Bistupur, set against his low opinion of the Sakchi market, left Shekhar confused. To think the decision through properly, he decided to drive down the Jamshedpur-Ranchi highway in his newly bought car.

Question: Suppose sales in Patna and Bistupur are likely to be the same, how many years would it take for Shekhar to recoup the investment (consider zero inflation)?

Caselet (Questions 97-100): Om Chowdhury was one of the supervisors in the Fire and Safety (F&S) department of Maqsood Textile Mills. He was a distant cousin of Mr. Bhiwani, the General Manager (Personnel & Administration), and the Personnel and Administration department handled all personnel-related decisions. It was often rumored that Om had gotten the job because of his cousin's influence. Om, however, was careful in his work and never gave anyone a reason to complain. He was known to be a quiet man who kept to himself and his duties.

All F&S supervisors reported to Mr. Rabindra, the shop-floor manager. The mill ran on a three-shift basis, and Rabindra allotted supervisors to the different shifts. Supervisors had to stay present through the whole shift and run scheduled checks on the machinery and firefighting equipment. For some reason, Rabindra kept assigning Om to the night shift more often than the other supervisors. Om never objected to this, while the other supervisors often pleaded with Rabindra to be given day shifts instead. Staying awake and alert through the night shift was one of the hardest parts of the job.

After a while, Rabindra noticed that Om seemed indifferent to his work. Twice he found Om missing from his cabin, and others told him Om had been seen wandering different parts of the shop floor. Rabindra called Om in and reminded him of his responsibilities. Om did not argue and promised not to be careless again. Rabindra also raised the matter with Mr. Bhiwani, who called Om in for a personal talk and reminded him that their family tie made the situation awkward for everyone. Om agreed to improve, and soon he became a model supervisor, even going out of his way to help employees with their problems.

Three months later, Rabindra visited the plant at night and, looking into the F&S office, found Om playing solitaire on the office computer. Rabindra fired Om on the spot.

The next morning, Mr. Bhiwani called Rabindra and asked how he could fire an employee like that, and suggested he reconsider the dismissal. Rabindra replied, "This decision has already been made. There will be no turning back."

Question: The options below give combinations of a possible root cause of the problem and its justification. Given the details in the case, which one can be inferred to be the best option?

Sayan, a recent MBA graduate with a specialization in sales and marketing, applied for the position of sales manager in a firm producing industrial fabrication tools. The management of the company took pride in its non-discriminatory recruitment policy. In offering Sayan the position, the management made it clear that an indispensable feature of the job involved entertaining purchasing agents, and that a certain amount of social drinking was necessary. Sayan assured them that he was a moderate drinker with no moral or religious prejudices against drinking.

During the following two years Sayan became a successful manager and, on two occasions, received awards for achieving the highest sales for the quarter. However, he found that he was encountering a problem resulting from the necessity of entertaining customers at least two or three times a week. He felt that he was becoming an alcoholic, since he had recently been overindulging even when not entertaining customers. The problem became progressively worse until he found himself in a constantly inebriated condition, unable to work without resorting to drinking at work.

On reporting his problem to the management, Sayan was sent, at company expense, to an alcoholic rehabilitation centre, from which he was discharged after six weeks of rest and recuperation. However, within two months of resuming duties, Sayan was arrested in a local pub and charged with drunkenness and assault. The victim of his assault was a customer whom he had taken to the pub to discuss a sale.

The management viewed the incident extremely negatively and fired Sayan. Shortly thereafter, a lawyer representing Sayan informed the management that Sayan intended to bring legal action against the company. Sayan felt the company was liable since his alcoholism was a result of his employment. He argued that drinking was a requirement of his job, and therefore alcoholism represented an occupational hazard. The management decided to form a committee to discuss the matter and recommend a course of action, one that would prevent a recurrence of such a situation.

Question: From Sayan's perspective, which option allows him to salvage his career prospects?

Sayan, a recent MBA graduate with a specialization in sales and marketing, applied for the position of sales manager in a firm producing industrial fabrication tools. The management of the company took pride in its non-discriminatory recruitment policy. In offering Sayan the position, the management made it clear that an indispensable feature of the job involved entertaining purchasing agents, and that a certain amount of social drinking was necessary. Sayan assured them that he was a moderate drinker with no moral or religious prejudices against drinking.

During the following two years Sayan became a successful manager and, on two occasions, received awards for achieving the highest sales for the quarter. However, he found that he was encountering a problem resulting from the necessity of entertaining customers at least two or three times a week. He felt that he was becoming an alcoholic, since he had recently been overindulging even when not entertaining customers. The problem became progressively worse until he found himself in a constantly inebriated condition, unable to work without resorting to drinking at work.

On reporting his problem to the management, Sayan was sent, at company expense, to an alcoholic rehabilitation centre, from which he was discharged after six weeks of rest and recuperation. However, within two months of resuming duties, Sayan was arrested in a local pub and charged with drunkenness and assault. The victim of his assault was a customer whom he had taken to the pub to discuss a sale.

The management viewed the incident extremely negatively and fired Sayan. Shortly thereafter, a lawyer representing Sayan informed the management that Sayan intended to bring legal action against the company. Sayan felt the company was liable since his alcoholism was a result of his employment. He argued that drinking was a requirement of his job, and therefore alcoholism represented an occupational hazard. The management decided to form a committee to discuss the matter and recommend a course of action, one that would prevent a recurrence of such a situation.

Question: As the management decides this situation, it also has to appoint a replacement for Sayan. The management is exploring the following options so that such a fiasco is not repeated:
A. Do not go to business schools. Hire an experienced sales manager from the market, and attract him or her by offering a higher remuneration package.
B. State the requirements of the job, including the necessity of social drinking, explicitly in the employment offer letter. A signed copy of the employment offer letter would indicate that the employee has accepted the terms of employment with complete knowledge of job details.
C. Social drinking does not imply that a person has to drink excessively. So select only mature persons, those who are high in self-esteem, who do not give in to social pressures, and who know how to exert self-control.
D. Provide guidance to all sales managers, both experienced and newly appointed, on how to behave during social occasions. This will help those who are otherwise moderate drinkers but end up drinking beyond their capacity because of suggestions from peers and friends.
E. Test the validity of claims of being moderate drinkers during the selection process itself. This will screen out persons who only claim to be moderate drinkers to obtain the job.
From management's point of view, the options in descending order of ease of implementation would be:

Sayan, a recent MBA graduate with a specialization in sales and marketing, applied for the position of sales manager in a firm producing industrial fabrication tools. The management of the company took pride in its non-discriminatory recruitment policy. In offering Sayan the position, the management made it clear that an indispensable feature of the job involved entertaining purchasing agents, and that a certain amount of social drinking was necessary. Sayan assured them that he was a moderate drinker with no moral or religious prejudices against drinking.

During the following two years Sayan became a successful manager and, on two occasions, received awards for achieving the highest sales for the quarter. However, he found that he was encountering a problem resulting from the necessity of entertaining customers at least two or three times a week. He felt that he was becoming an alcoholic, since he had recently been overindulging even when not entertaining customers. The problem became progressively worse until he found himself in a constantly inebriated condition, unable to work without resorting to drinking at work.

On reporting his problem to the management, Sayan was sent, at company expense, to an alcoholic rehabilitation centre, from which he was discharged after six weeks of rest and recuperation. However, within two months of resuming duties, Sayan was arrested in a local pub and charged with drunkenness and assault. The victim of his assault was a customer whom he had taken to the pub to discuss a sale.

The management viewed the incident extremely negatively and fired Sayan. Shortly thereafter, a lawyer representing Sayan informed the management that Sayan intended to bring legal action against the company. Sayan felt the company was liable since his alcoholism was a result of his employment. He argued that drinking was a requirement of his job, and therefore alcoholism represented an occupational hazard. The management decided to form a committee to discuss the matter and recommend a course of action, one that would prevent a recurrence of such a situation.

Question: Assuming that the management has no constraints in implementing changes in policy, the following possible recommendations can be made confidently about the company's recruitment and selection policy:
A. All that is required to sell the product is to entertain the purchase officers. The company should predominantly hire college graduates, particularly those who know how to interact socially.
B. The firm would be better off hiring sales managers from the market rather than those fresh out of business schools.
C. The firm should have only one sales manager. The sales manager should know the technical details of the product and its pricing, and should have the authority to offer price discounts to clients. At the next level, the firm should have a team of sales representatives responsible for developing contacts and reporting back to the sales manager for follow-up.
D. The firm should have an intense induction period where newly appointed employees are trained in the managerial aspects of the job and given training in social skills, including how to manage drinks.
E. People passing out of MBA colleges without work experience are as good as high school kids. The firm should avoid them at all costs, as they would often end up as a liability to the firm.
The option that makes good business sense and represents the choices for management, in increasing order of alignment with respect to its policy of non-discrimination, is: