decesion making for xat

Topics: Expected utility hypothesis, Risk aversion, Case study Pages: 35 (10476 words) Published: December 27, 2013
Contents
I. INTRODUCTION
II. THE CASE STUDY
III. THE FIVE-STEP PROCESS
IV. THE WALKTHROUGH
V. SOLVED EXAMPLES
A. INDIVIDUAL QUESTIONS FROM XAT 2008
B. GROUPED QUESTION FROM XAT 2008
C. GROUPED QUESTIONS FROM XAT 2009

VI. REASONS BEHIND ELIMINATING OPTIONS
VII. PRACTICAL VS. IDEAL

Decision Making

I. INTRODUCTION
The Analytical Reasoning section in the XAT exam has a typical question type called decision making. The questions feature word-based case studies as opposed to mathematical and logical sets of the past years. The decision making process involves a different kind of logic- not the rule based logic applied to solve logical reasoning sets but a logic that helps us make actual practical decisions in work or business. This question type presents a hypothetical question related to a hypothetical situation. It gives a set of options that represent the various methods in which the problem can be resolved. The nature of the case study may vary from ethics to business processes, but at the end, a decision has to be made that takes care of all aspects of the problem posed by the situation.

Here is an example of such a case study taken from the XAT 2008 exam:

II. THE CASE STUDY
“Seema was a finance manager in an MNC and felt that gender discrimination at the workplace hampered her career growth. Frustrated, she quit the job and started a new company. While starting her company, she decided that she would have equal proportion of males and females. Over the last six years, Seema emerged as a very successful entrepreneur and expanded her business to eight locations in the country. However, Seema recently started facing an ethical dilemma because she realized that female employees were not willing to travel across cities and work late hours, as the work required them to do so. Male employees did not hesitate undertaking such work. Seema started to feel the pressure of reducing the proportion of female employees. On the other hand, she is aware that equal representation was one of the strongest reasons for her to have founded the company.” The Question

“What should she do as a conscientious female entrepreneur?” These are the ways in which the problem can be handled. The student has to pick the best option out of these, based on his analysis of the case study.

The Options

1. See if unwilling female employees could be given assignments which do not require travel and involve less overtime. 2. Reduce the number of female employees, as it is a business requirement. She should not let anything affect her business. 3. Let the status quo continue.

4. Henceforth, hire only male employees.
5. She should close the business.

III. THE FIVE-STEP PROCESS
Solving a decision making question involves five steps in all. They are: 1. Reading the Case Study
Read the case study and highlight the relevant points. Get a basic understanding, assimilate and correlate the facts and pay attention to nuances. While reading, try to putting yourself in the shoes of the people involved. Cases can be long and have many facts to analyse– particularly in the time available in exam situations. So focus on getting an overview while reading the case.

2. Reading the Question
Since the case study may have more than one question, it is important not to get lost in its details and to understand what exactly is being asked.
3. Analysing the Options
The options of a typical decision making question are not right or wrong, black or white. They will always be in differing shades of gray– you have to pick the best shade. All options, including the wrong ones, will be framed keeping in mind that they are relevant to the situation explained in the case study. However, there will be certain and, most probably, very subtle differences between them. While reading every option, you have to take note of these differences and strike the right balance.

4. Eliminating Options
This is the most important process as it helps you narrow down to...
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