es

ss
l a
e C
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O n
DM – 01
Based on XAT
 For question 1 to 3

es
Level – 1

ss
a
Answer question no. 1 - 3 on the basis of information given in the following case.

Pupils‟ education is suffering because their teachers‟ pay is

negotiated centrally, according to new research that finds a
pupil‟s exam performance drops by an average of one GCSE
Cl
The study‟s authors say the losses in school performance from
keeping teachers‟ wages too low in expensive areas outweigh

e
the gains from overpaying teachers in cheaper areas.
grade when there is a 10% rise in local private sector salaries.
She said: “It is this government‟s policy of cutting the real and

il n
The study, by academics from the University of Bristol, analyzed relative value of teachers‟ pay that will make teaching as a
data from around 3,000 state secondary schools in England, career much less attractive and cause real issues with
which educate 3 million children a year. recruitment and retention. As independent research has
shown, removing centralised pay regulations for teachers

n
Current national pay scales for teachers allow for little regional
would simply reduce teacher mobility and lead to teacher
variation; the average differential in teachers‟ wages between
shortages in areas of lower pay.”
inner London and north-east England is 9% compared with 30%

O
for private sector jobs, the study says. This can cause difficulties
in recruitment and retention, especially of the best teachers, the
paper‟s authors say.
Carol Propper and Jack Britton, of the Centre for Market and
Public Organisation, write: “High ability teachers might decide to
leave the profession, move within the profession to a region
where the relative wage is higher, or be deterred from entering
teaching in the first place.” The study accounted for a school‟s
intake to allow for different levels of difficulty in educating pupils
of varying backgrounds. The research finds that a 10% increase
in the average wage over five years is associated with a drop of
one GCSE grade in one subject, per pupil.
(Contd.)
 es
1. Based on your understanding of the passage, identify the
problem(s) highlighted in the passage.
2.

s
Given the merits and demerits of centralized pay system,

s
which of the following qualifies for a good solution to the

a
problem(s) highlighted in the passage?
A. The problem of teachers‟ pay being regulated centrally

l
as opposed to other sectors. A. State should set local private sector companies as
benchmarks to decide on the salary increments in
B. Dipping grades of students.

C
different regions.
C. Deterioration in the quality of education due to neglect
B. State should abolish the centralized pay system
from the teachers.
completely and give schools the liberty to decide on the

e
D. The problem of rising attrition rates in the education pay scales for their teachers.
sector, especially in the teaching profession.

il n
C. State should stick to centralized pay system as
E. The problem of retaining and recruiting teachers. removing such regulations would only lead to reduced
teacher mobility and teacher shortages in areas of lower
pay.
(a) A, B and E

n
D. The pay system should be linked to performance and
(b) B, C and E also depend on the region where the school is located.

O
(c) A, B, D and E E. The pay system adopted must be revised regularly, like
that in private sector companies, so that retention and
(d) B and E
recruitment do not become impediments in raising the
(e) All of the above status of the profession.

(a) Only B
(b) Only C
(c) A and D
(d) B and D
(e) D and E
 es
3.

s
If the government continues with its centralized pay system as it is in the existing form, which of the following is a possible consequence
in the future?

s
a
A. London would see hoards of young people ready to pursue teaching irrespective of the pay scales.

l
B. The grades of students would continue to get affected by the rising salaries in private sector.

C
C. Teaching, as a profession, would start losing its charm.
D. Teachers from lowly paid regions would flock to highly paid regions.

e
E. Some of the best teachers would quit teaching for better prospects in other areas.

il n
(a) A and D
(b) B and C
(c) B, D and E
(d) B, C, D and E
(e) All of the above

O n
 For question 4 to 6

es
Answer question no. 4 - 6 on the basis of information given in the following case.

ss
On September 5, 2007, Apple, Inc.‟s Steve Jobs announced a 33% price decrease in his company‟s newest gadget, the iPhone. The

a
announcement came only ten weeks after the phone‟s initial introduction in late June. Billed as a revolutionary product that would

l
change the mobile communications industry entirely, the iPhone retailed at $599 in Apple and AT&T Wireless stores throughout the
country. Unfortunately, the initiative set off a wave of backlash as early iPhone adopters flooded internet chat rooms and sent

C
scathing emails to company executives exclaiming their distaste for the company‟s actions. Analysts and investors shared similar
concerns as Apple‟s stock price dropped 6.1% on the date of the announcement amidst fears that the price reduction was fueled by
weakening demand for the company‟s newest “blockbuster” product.

e
il n
4. The early buyers see the price reduction in the iPhone as a 5. The stakeholders (analysts and investors) have shown
breach of trust by the company. It is highly likely that they will similar concerns as the reduction in price has led to
resort to spreading negative publicity about the company. speculations about the plummeting demand of the
Which of the following, from the options given below, would company‟s products and adversely affected the stock prices.
be the best way to deal with the customers? Which of the following, from the options given below, would

n
be the best way to deal with the stakeholders?
(a) The gains that the company would accrue through the
slash in the prices would far outweigh the loss through (a) Convince the stakeholders that the reduction in price

O
the negative publicity spread by the early buyers; is not a reactive but a proactive approach to capture
therefore, the company can very well choose to ignore greater market share.
them.
(b) Promise them that the original prices will be back
(b) The company can collaborate with the service soon; stakeholders‟ concerns are of top priority.
providers so as to offer lower tariffs and other
(c) Increase the dividends paid out to the shareholders
schemes to the early buyers to pacify them and win
temporarily to distract them from the issue.
back their trust.
(d) Do not react to their concerns/apprehensions; it is
(c) Communicate to the early customers that the newer
normal for the stakeholders to oppose change.
models are inferior in quality to the ones bought by
them. (e) Promise to include them in the decision making
process in the future.
(d) Advertise that the price reduction is temporary; this
would soothe the early customers as well as increase
the sales.
(e) Cite obsolescence of the technology used in the
iPhone as the reason for the price reduction.
 es
6.
following options, the best way that Apple could have adopted instead of lowering its prices to tackle the competition.

ss
Assume that Apple‟s move of reducing the price was a response to aggressive price war tactics from its competitors. Choose, from the

a
(a) Buy out the competition; it will consolidate Apple‟s own position as well as remove the threat of reduction in market share.

l
(b) Price war is fuelled by reactions and counter-reactions; the best way should be to not become party to such tactics.
Do not reduce the price but mitigate the advantage gained by the competitors by establishing that Apple‟s products are of better

C
(c)
quality vis-à-vis the competing products.
(d) Offer freebies with the iPhone to attract the buyers and combat the competition.
(e)

e
Launch a new range of low priced products with fewer features to tackle the competition.

il n
O n
 For question 7 and 8

es
Answer question no. 7 - 8 on the basis of information given in the following case.

ss
German engineering giant Siemens, which is increasingly feeling the effects of the economic downturn, is to slash “thousands” of

a
jobs, the financial daily Boersen Zeitung reported on Tuesday. Last month, Siemens chief executive Peter Loescher said the

l
company was drawing up a programme to cut costs, boost productivity and efficiency. While the programme would not primarily be
implemented by reducing the headcount, job cuts could not be ruled out completely, Loescher said at the time. At the end of July,

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Siemens warned that it would be harder to achieve its annual profit targets, as the gloomy global economic mood weighs on orders,
especially in the field of renewable energy. It was the second time Siemens had been forced to revise down its targets this year.

e
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7. Given above is a piece of news published in a leading 8. Alexander has decided to confront his boss, Mr. Johnson,
German daily. Alexander, an excellent employee at Siemens, regarding the speculation of “thousands of job cuts”. As Mr.
came across this news and is unsure about his stay in the Johnson, decide what should be the best response to
company in the given scenario. From your understanding of Alexander‟s queries from the given options.
the passage, advise Alexander regarding the same from the

n
(a) Do not entertain such queries as it can spark off
options given below.
unnecessary rumours in the company.
(a) Alexander should not resign/panic as he is a valuable

O
(b) Tell Alexander not to pay attention to such speculation
resource of the company; it is unlikely that he would
in the media.
be asked to leave.
(c) Advise Alexander to start looking for a job and leave
(b) Alexander should resign and start looking for jobs with
the company before being asked to do so.
immediate effect; given the situation layoffs are on the
way. (d) Commit to Alexander that his job is safe.
(c) Alexander should not resign but express his (e) Tell Alexander what he is expected to know exactly
fears/concerns to his immediate superiors/managers. and advise him to keep himself open to all
possibilities.
(d) Alexander should not resign but start looking for jobs
to fall back on in case he is asked to leave.
(e) Alexander should not resign but discuss the situation
with colleagues and try to get more information on the
issue.
 For question 9 to 11

es
Answer question no. 9 - 11 on the basis of information given in the following case.
The caller ID on Matthew Spark‟s phone read “Kid Spectrum,

ss
I know he‟s more laid-back than you, but…” Matthew regretted

a
Inc.” It was someone from the Orlando office, probably his words immediately. Ellen was sensitive about the fact that

l
administrative director Ellen Larson. She had been in daily people thought she was uptight. “Have you talked to him about
contact with Matthew since he purchased the company, a any of this?” he asked quickly. “I mention the time sheets every

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provider of in-home services for autistic children, eight months time he calls in, and he promises to get to them. But then
ago. “Matthew, it‟s Ellen. I don‟t want to bother you again, but we nothing happens.” “I‟ll be down next week for the clinical team
have a situation down here.” Matthew sat back in his chair and meeting. I‟ll check in with Ronnie then. Like I said, I really need
readied himself. The “situation” could be anything from the copier
running out of ink to the building catching on fire. “I‟m calling

e
more information.”

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The team meeting had run long, so most people rushed off to
about Ronnie,” she said. Ronnie Emerson was director of clinical
their next appointments. Matthew, who used the conference
operations in Orlando, a position Matthew had created soon after
room as his office when he was visiting, opened his laptop to
taking the reins at Kid Spectrum. Ronnie, whose son had
check e-mail but then noticed that a senior clinician, Maxine,
Asperger‟s, had been working with special needs children his

n
was lingering in the doorway. “Maxine, can I help you with
entire career and had been with the company for a decade. The
something?” he asked. “You‟re getting an earful from Ellen
other 40 clinicians on staff regularly turned to him for advice. So it
about Ronnie, aren‟t you?” Maxine closed the door behind her.

O
had seemed like a no-brainer to promote him to a formal
Matthew was alarmed by her candor. The few times he had
management role. “He‟s not up to the job,” Ellen said now. “That‟s
met with Maxine, she had seemed quiet. “Well, I can guarantee
a strong statement, Ellen,” Matthew said. “I know, but it‟s true.
he‟s not as bad as she says,” Maxine said. “He‟s a really good
He‟s still resisting the new protocols for time sheets. It‟s been
guy. Y‟all did the right thing by promoting him.” “I‟m glad to
eight months, and he has yet to complete them on time. You
hear that.” “You know, he‟s told us about the new systems, like
know the impact that has on insurer reimbursement. And he‟s
the one for turning in our hours, and we understand why
hardly ever here in the office.” “He‟s supposed to be in the field
they‟re important. But Ronnie doesn‟t drill down on us like Ellen
50% of the time. He still has clients.” “It‟s more like 95%. I haven‟t
does. She‟s way too intense for how we do things here. She
seen him since Thursday, and you know I‟m always around.”
always has been. She‟s supposed to be supporting us
Matthew sensed that Ellen was exaggerating, but he couldn‟t be
clinicians in our jobs, but she acts like we‟re here to serve her.
sure. “He doesn‟t get that he‟s a manager now,” Ellen said. “Not
In my opinion, Ronnie focuses on what matters: the patients.”
only does he fail to comply with your new systems, but he doesn‟t
“The patients are important,” Matthew said, trying for
seem to care if his clinicians do. I mean, he barely blinks when
diplomacy. “He understands what they need more than any of
they call in sick. Right after Memorial Day we had 14 people out,
us, really—with his son and all.” “OK, Maxine. Thanks for that
and he didn‟t do a thing. We spent the entire day scrambling to
input.” She turned to open the door, and then paused. “If you
find subs.” “Well, that‟s certainly not optimal,” Matthew said,
ask me,” she said, “Ellen‟s the one who‟s trouble.”
worried his inexperience was showing. “Ellen, I really need to find
out more before passing judgment on Ronnie. (Contd.)
 For question 9 to 11

es
Later that day Matthew was in his makeshift office waiting for
Ronnie, who was nearly 20 minutes late for their 3:00

ss
That‟s what‟s kept us in business for so long. But we won‟t stay
in business without becoming more profitable. No insurer will

a
appointment. “I‟m so sorry I‟m late.” Ronnie walked in and shut pay us without the proper paperwork. If we want to grow the

l
the door behind him. “I was with a client, Harry. Eight years old, business—and help more kids—we need to follow these new
such a good kid, but he‟s struggling with school and his aide protocols. And we can‟t have a quarter of our staff out every
holiday.” “I know who‟s complaining about that. Ellen. She acts

C
seems like she wants to give up. But we were making such
strides today.” Matthew appreciated how dedicated Ronnie was. like we‟re in the military. Time sheets on time. No one gets
“I wanted to see how things are going with you and your team, sick. It‟s just not realistic. She was obsessive before, but now

e
particularly with the new systems, the time sheets.” “Well, we‟re it‟s getting ridiculous.” Ronnie paused and swallowed. “It‟s like
easing into them, you know. These clinicians aren‟t worker bees. you‟ve given her a license to be more uptight.” “As the

il n
They‟re used to being with kids, helping kids, so they need time.” administrative director, she needs accountability from you and
“We could do another training session if you thought it made your team, Ronnie.” “And she has it. But I need a certain
sense.” “No, no, I don‟t think that‟s necessary,” Ronnie said. “We amount of flexibility so that I can meet the needs of the kids.
just need more time. All this emphasis on efficiency is new for us. And, frankly, she needs to back off.” Ronnie‟s face had turned

n
We‟re dealing with some rough cases, families under a lot of red. This was the most worked up Matthew had ever seen him.
stress. You can‟t just zip in and zip out because that‟s what a time
sheet calls for.” Matthew nodded. “Of course, the client comes
first.

O (Contd.)
 es
9. Which of the following could have been a better response of
Ellen towards Ronnie‟s reluctance to turn in the time sheets?
11.

s
According to the passage, which of the following would serve

s
as the best response(s) on Matthew‟s part to resolve the

a
Ellen-Ronnie issue?
(a) Request Matthew to step in right in the beginning so

l
that the implementation of the protocols is not delayed (a) He should sit with Ellen and Ronnie separately and
further. put the other person‟s genuine concerns forward

C
making them understand the problems and limitations
(b) Talk through the matter with Ronnie trying to convince
of each other.
him rationally of the importance of time sheets.
(b) Segregate their departments in such a way that they

e
(c) Confront Ronnie directly and demand an explanation
don‟t cross each other‟s paths professionally.
regarding the delay in implementing the protocols.

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(c) Matthew must align the objectives of both the
(d) Escalate the matter and let the management take a
managers with each other ensuring they are working
call; they are better equipped to deal with the issue.
towards a common goal.
(e) Do not bring up the issue with Ronnie or the
(d) Visit the Orlando office on a weekly basis along with
management at all, her job was to tell Ronnie to

n
keeping himself updated of the daily happenings
submit the time sheets, if he does not, it is his fault.
through technology.

O
(e) He should mediate between the two of them
suggesting a middle path that is not very liberal with
the protocols but still flexible enough to accommodate
the working styles of the clinicians.
10. Which of the following is not one of the problems that „Kid
Spectrum‟ is facing?
(a) Lack of co-ordination/understanding between the
employees of Kid Spectrum.
(b) Lack of clarity of role and goals of the organization.
(c) Employees‟ lack of confidence in the management.
(d) Differing priorities of the employees directed towards
the success of the organization.
(e) Lack of constructive communication between the
employees.
 For question 12 to 14

es
Level – 2

ss
a
Answer question no. 12 -14 on the basis of the information given in the following case.

l
Due to increased competition, Ginger Automobiles, the Indian subsidiary of Pepper Automobile Company (PAC) reported lower

C
sales and profits. PAC expects its new model Limo, developed especially for value conscious customers of India and China, would
revive its fortunes. In order to prevent customers from buying competing products, PAC announced the launch of Limo six months
before schedule. Due to unrest in its Indian supplier's plant, deliveries of essential components for its main plant was hampered,

e
and hence it decided to launch Limo in China only as per the original plan. Within a short span of time, Limo captured 30% market
share in China, which was 200% higher than expected. Indian customers who had looked forward to purchasing Limo were

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becoming increasingly unhappy to the non-availability of Limo in the India. Ginger's dealers were worried about loss of business
from the customers who might switch to other cars.

n
12. Statement I: In the Chinese market, Baft, and Hebe, are 13. Unhappy customers will not only leave the company, but also
competing models in Limo' s target market. Due to increase spread negative publicity about the company. The best way,

O
in sales of Limo by 200%, Baft and Hebe saw their market among the options below, to deal with customers is:
share decline by 10%.
(a) suggest to customers to wait.
Statement II: Baft and Hebe were not desired by the
(b) suggest to customers to consider purchasing any of
customers due to their new features.
the other PAC's models available in showrooms, with
Which of the following conclusions can be most justifiably a substantial discount along with gifts.
made?
(c) suggest to PAC to treat Indian and Chinese markets
(a) I alone equally.
(b) II alone (d) promise the top management of PAC higher
sales/profit from Indian market compared to Chinese
(c) Either I or II
market.
(d) Neither I nor II
(e) suggest to the top management of PAC to
(e) I and II together manufacture essential components in either India or
China.
(XAT)
(XAT)
 es
14.

s
Mr. Murugan from Chennai experienced the comfort of Limo during his visit to China. He was willing to deposit an approximate price of

s
Limo to buy the first available unit from Mr. Ahmed, a dealer in Chennai, known for fair dealing. Ginger Automobile is yet to announce

a
the actual price, and the process for allocation of the vehicles. In order to maximise his cash flow, Mr. Ahmed should

l
(a) collect the amount from Mr. Murugan. Later when the delivery is delayed, blame it on PAC's problems.

C
(b) collect 50% as advance and the remaining 50% after the confirmation of launch date by Ginger Automobiles.

(c) collect the amount Mr. Murugan is willing to deposit after clarifying that delivery is subject to the company policy.

(d)

e
not collect the amount, but suggest to Mr. Murugan to write to Ginger Automobiles.

il n
(e) collect the amount and transfer it to the account of Ginger Automobiles, instead of keeping it in his personal account.

(XAT)

O n
 For question 15 to 17

es
Answer question no. 15-17 on the basis of the information given in the following case.

ss
a
Dev Anand, CEO of a construction company, recently escaped a potentially fatal accident. Dev had failed to notice a red light while

l
driving his car and attending to his phone calls. His well- wishers advised him to get a suitable replacement for the previous driver
Ram Singh, who had resigned three months back.

C
Ram Singh was not just a driver, but also a trusted lieutenant for Dev Anand for the last five years. Ram used to interact with other
drivers and gathered critical information that helped Dev in successfully bidding for different contracts. His inputs also helped Dev

e
to identify some dishonest employees, and to retain crucial employees who were considering attractive offers from his competitors.
Some of the senior employees did not like the informal influence of Ram and made it difficult for him to continue in the firm. Dev

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provided him an alternative job with one of his relatives.
During the last three months Dev has considered different candidates for the post. The backgrounds of the candidates are given in
the table below.

n
Educational Expected
Name Age Experience Remarks
Qualification Salary (Rs.)

O
Seven years 18,000 Ex-employers are highly satisfied. Their only concern is about his tendency to switch jobs
Sunder 32 Post graduate of driving per after every six months. Enjoys the newness in every job but tends to lose interest after six
experience month months. Not willing to commit for any more than six months

8,000 Claims to have more than one year of experience, but can't provide any certificate to
Studied up to
Mani 23 One year per substantiate it. He has received a hike of ` 2,000 last month on account of his good
Standard IX
month performance as a driver.
20,000
Working as a driver for the last one year after losing his previous job of a stenographer.
Chintan 44 Graduate 20 years per
He has been forced to take up the job of a driver.
month
15,000 Cousin of Ram Singh. Substituted Ram as Dev's driver whenever Ram was on leave.
More than
Bal Singh 40 Literate per Currently working as a driver with Dev's in-laws. Strongly recommended by Ram. His
20 years
month knowledge and contacts in the firm is as good as Ram's.

Working as a temporary driver with Dev's major competitor for the last three years. The
12,000
competitor has offered Chethan's service to Dev on a temporary basis. Chethan has also
Chethan 38 Standard XII 10 years per
expressed his willingness to work on a long term basis, provided he is given an annual
month
increment of ` 500, which is reasonable as per the market condition.
 For question 15 to 17

es
ss
Dev is primarily looking for a stable and trustworthy driver, who can be a suitable replacement for Ram. His family members do not
want Dev to appoint a young driver, as most of them are inexperienced. Dev's driver is an employee of the firm and hence the

a
appointment has to be routed through the HR manager of the firm. The HR manager prefers to maintain parity among all

l
employees of the firm, He also needs to ensure that the selection of a new driver does not lead to discontent among the senior
employees of the firm.

15. Who among the following five candidates is most likely to be

rejected by the GM (HR)?
(a) Chethan
17.

C
In order to resolve the conflicting preferences, one of Dev's
friends suggested Dev, his family members and the HR

e
manager to identify their most and the least preferred
candidates without considering the concerns of other

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(b) Chintan stakeholders.
(c) Bal Singh I. Dev's most and least preferred candidates: Bal Singh
and Chetan respectively
(d) Mani
II. Family members' most and least preferred candidates:

n
(e) Sunder
Bal Singh and Chintan respectively
(XAT)
III. HR manager's most and least preferred candidates:

O
Chethan and Bal Singh respectively

16. From his perspective, and taking into account the family's Which of the above three statements is/are in conformity with
concerns, Mr. Dev would like to have the information provided in the passage?
(a) Chethan (a) Option I
(b) Chintan (b) Option II
(c) Bal Singh (c) Options I and II
(d) Mani (d) Options II and III
(e) Sunder (e) Options I, II and III r
(XAT) (XAT)
 For question 18 and 19

es
Answer question no. 18 - 19 on the basis of the information given in the following case.

ss
a
Saral Co. is operating in seven north-eastern states of the country. The organization has a history of participative decision making,

l
wherein people deliberate openly about pros and cons of every important decision, and a broad consensus is taken before taking
the final decision. In Saral Co. every employee gets a salary proportional to the sales achieved. A new General Manager (GM)

C
joined during the beginning of this month and challenged the organization's sole focus on sales to determine salaries. He urged the
top management to include two more additional parameters in determining the salaries of the employees, viz. collection of
information about competitors and the quality of relationship with the retailers.

e
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18. Manohar, the highest earning employee for the last three 19. The top management of Saral Co. refused to implement the
years, vehemently opposes the GM's proposal. Which of the proposal of new GM from the beginning of next month.
following could be most likely reason for him to oppose the Which of the following could be the most justified reason for
proposal? the management's refusal?
(a)

(b)

(c)
favourable position in Saral Co.

regarding competitors.

O n
He considers the proposal as a serious threat to his

He is not interested in collecting the information

No clarity regarding the relative importance of the

three parameters.
(a)

(b)

(c)
To ensure that no manager will get credit for a major
change soon after joining.
To avoid attracting criticism for their failure to
implement a similar scheme.
His past experience is limited to seven north-eastern
states only.
(d) He is not interested in maintaining quality relationship (d) The GM is new to the organization and he would
with retailers. require some time to implement the new plan.
(e) He may need to work harder to earn the highest (e) The top management would need time to deliberate
salary. and get consensus.
(XAT) (XAT)
 es
Answer question no. 20 on the basis of the information given in the following case.
20.

ss
Indian government may hold top executives responsible if state-run power companies fail to meet performance targets and punish them

a
with fines and transfers. The strict performance parameters are aimed at ensuring that at least the reduced target for 62,000 MW of

l
generation capacity addition is achieved before the end of the II th Plan, said a power ministry official. Performance of chairmen and
managing directors of the power Public Sector Units (PSUs) in project implementation will be assessed as per the terms and conditions
stipulated in the company‟s memorandum of understanding (MoU) with the power ministry, he said, requesting anonymity. Performance

22,302 MW of fresh capacity.

e C
parameters of executives had come under strict scrutiny due to a lack of progress in capacity addition program. While the target for the II
th five year plan has already been scaled down by the government from 78,500 MW, in the first three years of the plan yielded only

If you were the chairman of one of these power PSU‟s, which of the following statements (all of which are assumed to be true) could best

il n
be used in order to strengthen your case against the government holding top executives responsible?
i. The labour unions, owing allegiance to ruling party at the Centre, are not allowing work to progress with their demands for wage
hikes that are untenable

n
ii. The actions of the mid-level management are not In line with the objectives laid down by the top management
iii. The delays have been due to difficulties in obtaining funds at reasonable interest rates on account of the recessionary conditions

O
iv. We are not to blame. The government is not doing enough to ensure availability of sufficient fuel to power the existing plants, let
alone the new plants.
v. The government had ignored the infrastructure availability like roads etc., and environmental clearances required for such projects
and therefore set an unrealistic target to begin with, and the revised target is also unrealistic as well.
(a) i and ii
(b) i and iii
(c) i, iii and iv
(d) ii, iv and v
(e) i, ii, iii, iv and v
(XAT)
 For question 21 and 22

es
Answer question no. 21 - 22 on the basis of the information given in the following case:

ss
a
The CEO of ABC Telecom Ltd. (ABC) is in a quandary since he received the telephone call in the morning from his counterpart at

l
LMN Telecom Ltd. (LMN). Both companies were engaged in a bitter experience a couple of years ago when they had attempted to
merge with the intention of creating a behemoth telecom company, possibly the largest in the world. The merger had fallen through

C
due to opportunistic behaviour on the part of Mr. Das, then CEO of LMN. During the time the merger talks were taking place, Mr.
Das had also approached a few other suitors for LMN in an attempt to force ABC to pay a higher price. Further, there were reports
of attempts by management of LM to scuttle the deal. Back then, ABC had also faced stiff opposition to the deal from one of its

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large shareholders.

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Since then, a lot has changed for both companies. The bleak economic conditions due to recession had led to a drastic fall in the
market value of both companies, with ABC comparatively losing much more in terms of market value. Raising money has become
more difficult for both companies, especially for LMN. On the brighter side for ABC, the opposing shareholder had recently sold off
his stake to another investor who earlier had supported the original merger deal with LMN a couple of years ago.

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21. Which of the following would be the most appropriate line(s)
of thought for the CEO of ABC to adopt in response to the
22.

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The merger of ABC and LMN has been confirmed after

s
detailed negotiation with LMN holding the majority share of

a
offer by LMN? the resultant entity. LMN has financed the merger by taking
debt at higher-than-market interest rates from its bankers, in

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i. Once bitten twice shy. There is simply no way I can
the hope that it would be able to streamline operations and
think of resuming talks with LMN after their unethical
reduce costs in the resultant entity which will allow it to repay

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behaviour the previous time around. I would rather
the loan. If you were an investor looking to invest in telecom
spend my time on merger discussions with other
companies, which of the following could be the strongest
companies.
reasons for staying away from investing in resultant entity?

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ii. The deal may make less business sense this time
(a) The new entrants in the telecom market were coming
around. However, if it goes through, I will become the

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with better offers for the customers.
CEO of the world‟s largest telecom company. So let
us try our luck once more. (b) The market would be as competitive as ever for the
resultant entity, thus providing no guarantee for
iii. I will resume talks only if they provide guarantees as
success.
to the reimbursement of our expenses incurred, in the

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event of the deal not materializing. (c) The combined management did present have any
grand strategies to the investors.
iv. Let me not be biased against dealing with LMN. If we

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can secure the deal at a reasonably low price, (d) ABC‟s management was giving in to Mr. Das who was
benefiting our shareholders, let us go ahead with it. a known opportunist.
v. I am not sure if we can raise the money now. In any (e) LMN was using high cost debt to purchase another
event, they are the ones facing greater financial company in the same industry facing similar problems,
problems. So let‟s not hurry now. We might have an with no visible advantage for the combined entity over
opportunity to buy them out at a cheaper price later. competitors.
(a) i and iii (XAT)
(b) ii and iv
(c) ii and iii
(d) i and iv
(e) iv and v
(XAT)
 For question 23 to 26

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Answer question no. 23 -26 on the basis of the information given in the following case.

ss
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
l a
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
responsible business practices, the organization had developed
an impeccable reputation. Majority of the regular workers in
Chetan Mills had membership of Chetan Mills Mazdoor Sangh
(CMMS), a non political trade union. CMMS had the welfare of its

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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

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members as its guiding principle. Both CTM and CMMS members.
addressed various worker related issues on a proactive basis. As
Recently, based on rumours, CTM management started to
a result no industrial dispute had been reported from the
investigate the alleged exploitation of contract labourers by
organization in the recent past.

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certain contractors. Some contractors felt that such
These days majority of the employers deploy large number of investigations may expose them and reduce their profit margin.
contract labourers in their production processes. In an open They instigated contract labourers to demand for better wages.

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economy survival of an organization depends on its Some of the contract labourers sought the support of various
competitiveness. In order to become competitive, an organization political parties in order to increase their negotiation power.
must be able to reduce cost and have flexibility in employment of Contract labourers engaged in material handling and cleaning
resources. Engaging workers through contractors (contract work started provoking CTM management by adopting violent
labourer) reduces the overall labour cost by almost 50%. Indian tactics.
labour legislations make reduction of regular workers almost
Today‟s news-paper reports that police and CTM security
impossible, but organizations can overcome this limitation by
guards fired two or three rounds in air to quell the mob. The
employing contract labourers. Contract labourers neither get the
trouble started while a security guard allegedly slapped one of
same benefits as regular employees nor do they have any job
the contract labourers following a heated argument. Angry
security. According to various recent surveys, government owned
labourers set fire to several vehicles parked inside the
public sector units and other departments are the biggest
premises, and to two police jeeps.
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.
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23. In the wake of recent happenings, what decision is expected
from CTM management? From the combinations given
24.

s
In the current context, which among the following represent

s
the most suitable reaction from CMMS leadership?

a
below, choose the best sequence of action.
(a) Distance CMMS from the episode and explain that

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I. Stop the current investigations against the contractors CMMS is not involved in the fiasco through a press
to ensure industrial peace; after all allegations were conference.

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based on rumours.
(b) Offer membership to contract labourers, which would
II. Continue investigations to expose exploitation and put the contract workers at par with the regular
take strong actions against trouble makers. workers in CMMS.
III. Get in direct touch with all contract labourers through (c)

e
Do not offer membership to contract labourers, but

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all possible means, communicate the need for current represent their interests during negotiation in order to
investigation to stop their exploitation, and convince prevent the formation of another union in CTM.
them regarding CTM‟s situation due to competition.
(d) Start another union exclusively for contract labourers
Also expose those contractors who are creating
of CTM.
problems.

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(e) Adopt a neutral stand in public, and pass on
IV. Promise strong action against the security guards who
information related to problem creators to the CTM
are guilty.

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management.
V. Increase the wages of contract labourers.
(XAT)

(a) I, V
(b) I, II
(c) II, V
(d) III, IV
(e) IlI, V
(XAT)
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25. Out of the options given below, which one would be the best
policy decision by government at the national level?
26.

s
The criminals in the surrounding area often took their cue

s
from the situation in the mill, creating law and order problems

a
outside the mill which would make it difficult for workers to
(a) Asking CTM management to pay same wages to both
come to the mill safely. Given the circumstances, identify the

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regular and contract workers.
stakeholder that should be the immediate priority of CTM
(b) Income tax raids in offices of contractors under management.

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investigation.
(a) Contract labourers who were allegedly beaten by the
(c) Setting up a new labour welfare office within CTM security guards of the company.

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premises.
(b) District administration that is concerned about the
(d) Setting up a new committee to make spread of violence.

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recommendations for changes in labour legislations
(c) CMMS that prefers an immediate settlement of the
with an objective to reduce exploitation of contract
issue.
labourers.
(d) Customers who are concerned about prices and
(e) Use entire government machinery to support CTM,

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regular supplies.
which has an impeccable track record.
(e) Contract labourers who are demanding job security
(XAT)

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and same wages as regular employees.
(XAT)
 For question 27 to 30

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For each question, an answer (A) and a reason (R) has been
given. Base your analysis on the information presented in the

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Mr. Shyam Khanna was employed by Siksha Foundation with
the single directive that he was to contribute to the selection of

a
passage. Mark teachers. This task had previously been the prerogative of

l
principals of each school. Mr. Khanna immediately notified
(a) if both A and R are based on information given in the
each principal that in the future he was to be notified of the
passage and R is the correct explanation of A.

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personnel needs and in return he would recruit, screen and
(b) if both A and R are based on information given in the select the teachers.
passage but R is not the correct explanation of A.

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At the end of his first year, with Siksha, Mr. Khanna realized
(c) if A is based on information given in the passage but R is that his efforts had resulted in failure. During his first few
not based on the facts given.

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months he encountered much opposition from several
(d) if A is not based on information given in the passage but R principals who had been managing schools for ten or more
is based on the information given in the passage. years. They did not believe in newer psychological techniques
and preferred selecting people based on their own
(e) if both A and R are not based on information given in the

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assessment. Other principals frequently refused to accept the
passage. teachers selected by Mr. Khanna. Finally, Mr. Khanna began to
Siksha Foundation had been engaged in running primary schools notice fewer and fewer principals notifying him of vacancies in

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in different parts of the country since 1970. While attending a their schools. Realizing that he was not making any effective
conference on employee selection, Mr. Ram Kapoor, a senior contribution, Mr. Khanna submitted the suggestion to the
member of the foundation learned that a leading school had society members that support and co-operation of the school
recently employed a psychologist to perform employment principals should be a matter of executive order, or else his
functions, i.e., recruitment and selection of teachers. Within two resignation should be considered.
months of his return, Mr. Kapoor contacted a reputed university
and employed a graduating psychologist, Mr. Shyam Khanna.
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27. What responsibilities were shouldered by Mr. Khanna in his
first year of employment?
29.

s
How were the changes in the recruitment and selection
process received by the principals?

s
a
A: Mr. Khanna had the responsibility of contributing his A: The principals rejected the new process in its entirely

l
expertise to recruitment and selection of teachers. from the day it was introduced.
R: The board members wanted to systematize the R: The principals were cynical of the abilities of the

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recruitment and selection of the entire organization. psychologists as far as recruitment and selection of
teachers were concerned.

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28.

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“At the end of his first year with Siksha, Mr. Gupta realized
that his efforts had resulted in failure.” Was Mr. Khanna‟s
self-assessment justified?
30. What was the flaw in the decision of selecting a psychologist
for selecting teachers that led to the final situation?
A: Mr. Kapoor‟s decision was predominantly driven by
A: Yes, since the selection of teachers continued to be the information about another school that had enlisted
done as it was being done earlier. the services of a psychologist for recruitment and
selection.
R: He was placed in a situation where the concerned
persons refused to consult him regarding his R: Both the administration of the school and managing
expertise. Hence his impact was dependent on co- teachers have been primary responsibilities of the
operation by others. principal of the school.
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l a
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Thanks!
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