Rules and tips to help you solve XAT Decision Making section. [with examples]

Rules and tips to help you solve XAT Decision Making section. [with examples]
05 December

Rules and tips to help you solve XAT Decision Making section. [with examples]

Rules and tips to help you solve XAT Decision Making section

In this article, I aim to cover the specifics required to successfully handle Decision Making question as they appear on the XAT. I’ll use actual XAT questions to point out the mechanics involved in solving such questions. And I strongly recommend that any prospective test-taker practice using previous years’ questions and not questions dreamt up by any Tom, Dick or Harry who fancies himself a critical thinker.

Without further ado, let’s begin!

XAT Decision Making: An Introduction

As a manager working for any business, one is called upon to make some tough calls and take some hard decisions, but unless those decisions are grounded in sound ethics and based on practicable plans of action, they are unlikely to be successful. The XAT, for all intents and purposes, has a specific reason for asking test takers to answer such questions. They are looking for people with strong sense of ethics and the courage to do the right things. In business and especially management environments, there is a quintessential need to maintain ethical standards, since, in organizations both government and private, there are multiple stakeholders in every situation. The only way to ensure fair practices in these ecosystems, where diverse parties might have dissimilar interests, is to adhere to ethics and thereby ensure one is unbiased in one’s decision making and the organizations involved do not unduly suffer because of biases and proclivities of those responsible for making decisions. However, contrary to the popular notion, ethics does not come naturally to us; we are all self-centred individuals and self-preservation, not fair play, drives most of us.

 Before we even attempt to solve XAT Decision Making questions, we must first understand what really is ethics.

Merriam-Webster’s defines ‘ethics’ as ‘the discipline dealing with what is good and bad and with moral duty and obligation’.

So, let’s not forget what our purpose is while dealing with these questions. To break it down, one needs to –

A) Take just decisions even if, on occasion, these decisions may NOT be humane in nature.

B) Remember, it’s NOT about taking the easier or the gentler path, NEITHER is it about ensuring that the interests of the organisation are placed before those of an individual; it is about doing the right thing, especially in the face of adversity.

Let’s now take a look at two variants of decision making questions that one might expect on the XAT:

  1. Detailed caselets, accompanied by a series of questions focussing on different aspects involved therein.

  2. Single-question based on shorter caselets (these resemble Critical Reasoning questions)

For both question types, however, the essentials remain the same; the test taker will be provided a situational environment and question/s will be based on it. The contexts provided in these cases are based generally on real-world situations.

The key element for these two types of questions is the aspect of time management. In the exam, in case you are running out of time, you will have to solve the single-question based sets and the smaller caselets. Now, some self-proclaimed ‘experts’ may suggest that you brush up on current affairs and different points of view espoused by the parties involved. In my opinion, the point is moot. Whatever case is thrown at you may resemble real-life events but the solutions applied to such events are not going to be given to the test-takers as options. Ultimately the test takers will, using the information provided, come to their own conclusions. So, it doesn’t really matter if one agrees with, for example, Vishal Sikka’s removal from his position on the board of Infosys or whether one side with either Rahul Gandhi or Narendra Modi on ‘Demonitisation

Truth be told, the primary reason for the inclusion of this question type on the XAT is to gauge your ability to make sound judgements based on the information at hand.

One factor, however, that every test taker must pay attention to is time management. If you have a little time on your hands go for the detailed caselets, when you are running out of time choose the single-question based sets and the smaller caselets.

To attain higher accuracy, please keep just this one rule in mind:

Irrespective of the practicality involved that one needs to exhibit in these questions, there remains a bookish imperative to Decision-Making questions. Everything said and done, one must still opt for the ideal solution. Therefore, if the choice is between practical and ideal, choose ideal.

What constitutes a ‘right decision’?

Over the last nine or ten years, I have been a trainer, I have, indeed, noticed that the correct answers always exhibit one, many or all of the following characteristics(let’s call them thumb rules):

  1. They are ethical even if they come at a price.

  2. They are also practical and not merely idealistic or ‘feel good’.

  3. They do NOT favour a particular side in a disputatious situation.

  4. They are balanced and seek to provide solutions where required

  5. Avoid extreme choice at all costs.

  6. They always work on the premise of the greater good for the greatest number involved. This is true especially when one has to choose between the benefits to organisations/institutions over individuals.

  7. Lastly, if there are dates or figures involved, those will certainly have a bearing on the answer s!

Let’s now use actual questions that have appeared on the XAT over the years and see how these rules work in real time-

XAT 2008

You, a recruitment manager, are interviewing Mayank, a hard-working young man, who has problems in speaking fluent English. He has studied in vernacular medium schools and colleges. Amongst the following options, what would you choose to do, if your company has vacancies?

  1. I would hire him at all costs.

  2. I would hire him for the job he is good at, and provide training in other areas.

  3. I would hire him for production or finance job but not for a marketing job, which requires good communication skills.

  4. I would ask him to improve his communication skills and come back again.

  5. I would not hire him as he might be a burden on organisation because of his poor communication skills.

Rules applied-

(He’s a good candidate) (He is not good at some things, but the organization shouldn’t suffer because of his inadequacies. Solution: Provide training).

Correct answer B and NOT D or E. D and E are discarded because D would entail that the company misses out on a good recruit and E is, well, extreme! A is idealistic but NOT practical .C paints those involved in production or finance in an unrealistic light. Good communication skills are appreciated in every department.

XAT 2010

In the calendar year 2008, there was turbulence in the air as Jet Airway’s Chairman pondered what course of action the airline should take. Air India was also struggling with the same dilemma. Two of India’s largest airlines, Air India and Jet Airways, had sounded caution on their fiscal health due to mounting operational costs. A daily operational loss of $2 million (Rs.8.6 crore) had in fact forced Jet Airways to put its employees on alert. Jet’s senior General Manager had termed the situation as grave, Jet’s current losses were $2 million a day (including JetLite ). The current rate of Jet Airways’ domestic losses was $0.5 million (Rs2.15 crore) and that of JetLite was another $0.5 million. International business was losing over $1 million (Rs 4.30 crore) a day. The situation was equally grave for other national carriers. Driven by mounting losses of almost Rs 10 crore a day, Air India, in its merged avatar, was considering severe cost-cutting measures like slashing employee allowances, reducing in-flight catering expenses on short-haul flights and restructuring functional arms. The airline also considered other options like cutting maintenance costs by stationing officers at hubs, instead of allowing them to travel at regular intervals. Jet Airways, Air India and other domestic airlines had reasons to get worried, as 24 airlines across the world had gone bankrupt in the year on account of rising fuel costs. In India, operating costs had gone up 30-40%. Fuel prices had doubled in the past one year to Rs 70.000 per kilolitre, forcing airlines to increase fares. Consequently, passenger load had fallen to an average 55-60% per flight from previous year’s peak of 70-75%. Other airlines faced a similar situation; some were even looking for buyers. Domestic carriers had lost about Rs 4,000 crore in 2007- 08 with Air India leading the pack. ”As against 27% wage bill globally, our wage bill is 22% of total input costs. Even then we are at a loss,” an Air India official said. Civil aviation ministry, however, had a different take. “Air India engineers go to Dubai every fortnight to work for 15 days and stay in five-star hotels. If they are stationed there, the airline would save Rs 8 crore a year. This is just the tip of the iceberg. There are several things we can do to reduce operational inefficiency”. According to analysts, Jet Airways could be looking at a combined annual loss of around Rs 3,000 crore, if there were no improvements in operational efficiencies and ATF prices. Against this backdrop, the airline had asked its employees to raise the service bar and arrest falling passenger load.

The total loss for the airline industry was likely to be Rs. 10,000 crore. Jet Airlines lost Rs. 3,000 crores, Air India lost Rs. “X” crore and “rest of the airlines” lost Rs. “Y” crore. What was the loss for the “rest of the airlines”, in 2008?

  1. Cannot be determined

  2. Rs. 3,350 crores

  3. Rs. 3,690 crores

  4. Rs. 3,340 crores

  5. None of the above

Rule applied7. The correct answer is D. That date is important. It indicates a leap year. Unless you factor that in, you are unlikely to get the right answer.

XAT 2011

Chetan Textile Mills (CTM) had initiated various employee welfare schemes for its employees since the day the mill began its operations. Due to its various welfare initiatives and socially responsible business practices, the organization had developed an impeccable reputation. Majority of the regular workers in Chetan Mills had the membership of Chetan Mills Mazdoor Sangh (CMMS), a non-political trade union. CMMS had the welfare of its members as its guiding principle. Both CTM and CMMS addressed various worker-related issues on a proactive basis. As a result, no industrial dispute had been reported from the organization in the recent past. These days majority of the employers deploy a large number of contract labourers in their production processes. In an open economy survival of an organization depends on its competitiveness. In order to become competitive, an organization must be able to reduce cost and have flexibility in employment of resources. Engaging workers through contractors (contract labourer) reduces the overall labour cost by almost 50%. Indian labour legislations make reduction of regular workers almost impossible, but organizations can overcome this limitation by employing contract labourers. Contract labourers neither get the same benefits as regular employees nor do they have any job security. According to various recent surveys, government-owned public sector units and other departments are the biggest employers of contract labourers in the country. Contractors, as middle-men, often exploit the contract labourers, and these government organizations have failed to stop the exploitation. Over time CTM started engaging a large number of contract labourers. At present, more than 35% of CTM’s workers (total 5,000 in number) are contract labourers. CMMS leadership was wary about the slow erosion of its support base as regular workers slowly got replaced by contract workers and feared the day when regular workers would become a minority in the mill. So far, CMMS has refused to take contract labourers as members. Recently, based on rumours, CTM management started to investigate the alleged exploitation of contract labourers by certain contractors. Some contractors felt that such investigations may expose them and reduce their profit margin. They instigated contract labourers to demand better wages. Some of the contract labourers sought the support of various political parties in order to increase their negotiation power. Contract labourers engaged in material handling and cleaning work started provoking CTM management by adopting violent tactics. Today’s newspaper reports that police and CTM security guards fired two or three rounds in the air to quell the mob. The trouble started while a security guard allegedly slapped one of the contract labourers following a heated argument. Angry labourers set fire to several vehicles parked inside the premises, and to two police jeeps.

In the current context, which among the following represent the most suitable reaction from CMMS leadership?

  1. Distance CMMS from the episode and explain that CMMS is not involved in the fiasco through a press conference.

  2. Offer membership to contract labourers, which would put the contract workers at par with the regular workers in CMMS.

  3. Do not offer membership to contract labourers, but represent their interests during a negotiation in order to prevent the formation of another union in CTM.

  4. Start another union exclusively for contract labourers of CTM.

  5. Adopt a neutral stand in public, and pass on information related to problem creators to the CTM management.

Rules applied - 2 & 4.  Correct answer C. Option E may be a more practical solution since supporting one’s paymaster makes sense but it’s not ethical to say one thing and do another.  B is impractical as it allows newcomers to reap the same benefits accorded to people who have paid for those privileges with their loyalty to the company.


Out of the options given below, which one would be the best policy decision by the government at the national level?

  1. Asking CTM management to pay same wages to both regular and contract workers.

  2. Income tax raids in offices of contractors under investigation.

  3. Setting up a new labour welfare office within CTM premises.

  4. Setting up a new committee to make recommendations for changes in labour legislation with an objective to reduce exploitation of contract labourers.

  5. Use entire government machinery to support CTM, which has an impeccable track record.


Rules applied - 3, 4 & 6. Correct answer D. Remember! You can’t take sides but you must attempt a solution. Above all, the greater good for the greatest number!

For any question, please use the comment section given below.


Decision making 51 sets, 132 questions compiled by team Kitabee. Best wishes for your XAT preparation.

click on Download 

Happy learning.


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