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XAT Decision Making Practice Series – #1

XAT Decision Making Practice Series – #1

Answer the following DM question (XAT 2018) with a reasonable explanation –

Lal & Sons, a family business, comprises three different companies in three different industries. Sudarshan Lal was heading this entire business from the inception. Two years ago, he hired three managers, one for each company and Chhaganlal Jha as Chief Executive Officer (CEO) to look after the entire business. These three managers are reporting to the CEO. However, Sudarshan Lal and his family still own the entire business, though they are not involved in the day to day operations.

Q1. Two years after the handing over, Sudarshan was concerned that none of the companies, except one, is profitable. Which of the following information, if true, will most likely reduce Sudarshan’s concerns?
(A) A leading financial institution recently advised its investors to purchase the shares of the two loss-making companies with a long-term outlook.
(B) The Corporation’s performance was stagnant for three years before Sudarshan handed it over to professionals.
(C) The best performing division belongs to an industry, which is growing in double digits.
(D) People holding senior positions have been replaced two years ago by fresh and young talent.
(E) The rate at which employees are leaving the best performing division is higher than the industry average.

Q2. Some of the senior employees who left Lal & Sons in recent past have complained to Sudarshan that the long-cherished values of the organization such as respect for elders, job security etc. are being compromised. Which of the following options, if true, will indicate to Sudarshan that the employees are misleading him?
(A) The replaced employees have been average performers for many years.
(B) When senior employees were assigned to lead challenging but critical positions in the organization, they resigned.
(C) The senior employees were replaced by people below them and not from outside the organization.
(D) The replaced senior employees had only 4 more years of service and were not compensated for premature termination.
(E) The number of senior employees voluntarily leaving this organization is lower than the industry average.

Q3. Chhaganlal Jha, the CEO, was certain that someone in his leadership team was leaking information to Sudarshan Lal, well before Chhaganlal communicated.
Given the following options, how best should Chagganlal Jha respond to this situation?
(A) Chhaganlal should request Sudarshan to kindly wait for him to communicate as informal sources may lead to misinformation.
(B) Chhaganlal should complain about this to Sudarshan and threaten to resign.
(C) Chhaganlal should request his team to continue passing information since it brings down the communication barrier.
(D) Chhaganlal should understand that this is bound to happen and should not bother.
(E) Chhaganlal should threaten his team that one of them will be fired by the weekend if this practice of passing information doesn’t stop immediately.

2 Answers
Chirag Shukla, MBA Aspirant answered 6 days ago

The correct answers are – 
(A) A leading financial institution recently advised its investors to purchase the shares of the two loss-making companies with a long-term outlook.
(B) When senior employees were assigned to lead challenging but critical positions in the organization, they resigned.
(A) Chhaganlal should request Sudarshan to kindly wait for him to communicate as informal sources may lead to misinformation.

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