Decision Making Test - 2

While travelling in a Delhi-registered commercial taxi from Delhi to Noida (another State), your taxi driver informs you that because he has no permit for running the taxi in Noida, he will stop at Noida’s Transport Office and pay the prescribed fee of Rupees forty for a day. While paying the fee at the counter you find that the transport clerk is taking an extra fifty rupees for which no receipt is being given. You are in hurry to attend a meeting. In such circumstances, what would you do?

The CEO of ABC Telecom Ltd. (ABC) is in a quandary since he received the telephone call in the morning from his counterpart at 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 due to opportunistic behavior 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 LMN to scuttle the deal. Back then, ABC had also faced stiff opposition to the deal from one of its large shareholders.

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.

The merger of ABC and LMN has been confirmed after detailed negotiation with LMN holding the majority share of the resultant entity. LMN has financed the merger by taking debt at higher-than market interest rates from its bankers, in the hope that it would be able to streamline operations and reduce costs in the resultant entity which will allow it to repay the loan. If you were an investor looking to invest in telecom companies, which of the following could be the strongest reasons for staying away from investing in the resultant entity?

Answer the question based on the letter below.

To the Chairman:

Dear Mr.Sailesh,

At the December 3, 2011 meeting, it was decided that no two officers would hold positions on the same committee. It has recently come to my attention that both Chaitanya Rao and Ajit Singh will be serving in some capacity on the Cultural Committee, and both have been nominated for officer status. As you know, this is in direct disregard for the rules as voted by the Members Council last December 3, 2011. I would hope that sufficient action be taken by the Disciplinary Committee (on which committee both of the above are members) so that this problem will be remedied.

Sincerely,

Arvind Singh

If both the nominations are confirmed, which of the following exhaustively and reasonably, describes actions that may occur in the near future?

You are the chairperson of a state sports committee. It is your first year in the position and you decided to introduce a new junior category in the regional tennis tournament for children under 15 years of age. The tournament was very well received as it showcased the local tennis talent. The winner of the junior tennis competition was Abhay Verma. However, after the conclusion of the tournament, you have received a complaint that Abhay had crossed the age criteria by 5 days. What will be your immediate course of action?

The city of Nagar has a population of 10 million, 2 million amongst whom were rich, 3 million poor and 5 million belonged to the middle class. Saundarya Cosmetics manufactured and sold beauty product to rich class at a premium price. Its products were very popular with customers. Many people from the middle and poor segments of population aspired to buy these products but could not afford because of high prices. Of late, sales growth was stagnating in the rich segment. Which of the following is the best option for Saundarya Cosmetics to maximize long-term profits?

Analyze the following data and answer the question follow:

Purushottam Bhatnagar owns and operates a sweetshop Puru and Sons. He is about 60 years old is eager to hand over the business to his sons Ratan and Pramod. He, however, fears that his sons, fresh from college may not understand the tricks of the trade.

Purushottam’s eldest son discovered that the shop repackaged sweets that were close to expiry and sold them at a discount under different names. These sweets usually get sold very fast. But his son was concerned about the possible consequences of this practice.

Purushottam was thinking of the following arguments to convince his son.

1. These sweets are consumed the same day and therefore there is no cause for worry.

2. Reduced prices give enough indication about the sweets to the customers.

3. These products are preferred by those who cannot afford full-price and in a way, this is a service done to them.

4. In the past 30 years not a single person has reported ill because of consumption of these sweets.

5. Repacking and selling sweets is a common practice.

Which combination of arguments below is MOST LIKELY to convince Ratan?

Hiralal, a poor villager, lives in a far off village which is almost two hours by bus from your office. The villager's neighbour is a very powerful landlord who is trying to occupy Hiralal's land by force. You are the District Magistrate and busy in a meeting called by a local Minister. The villager has come all the way, by bus and on foot, to see you and give an application seeking protection from the powerful landlord. You are informed by your secretary about a poor villager who had come to meet you by walk from a distant village. As you are busy in the meeting with the local minister, you tell the secretary to request him to wait. The villager keeps on waiting outside the meeting hall for two hours. You come out of the meeting and have to rush to another emergency meeting. The villager follows you to submit his application. What would you do?

The CEO of ABC Telecom Ltd. (ABC) is in a quandary since he received the telephone call in the morning from his counterpart at 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 due to opportunistic behavior 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 LMN to scuttle the deal. Back then, ABC had also faced stiff opposition to the deal from one of its large shareholders.

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.

Which of the following would be the most appropriate line(s) of thought for the CEO of ABC to adopt in response to the offer by LMN?

i. Once bitten twice shy. There is simply no way I can think of resuming talks with LMN after their unethical behaviour the previous time around. I would rather spend my time on merger discussions with other companies.

ii. The deal may make less business sense this time around. However, if it goes through, I will become the CEO of the world's largest telecom company. So let us try our luck once more.

iii. I will resume talks only if they provide guarantees as to the reimbursement of our expenses incurred, in the event of the deal not materializing.

iv. Let me not be biased against dealing with LMN, if we can secure the deal at a reasonably low price, benefiting our shareholders, let us go ahead with it.

v. I am not sure if we can raise the money now. In any event, they are the ones facing greater financial problems. So let's not hurry now. We might have an opportunity to buy them out at a cheaper price later.

You are the head of your office. There are certain houses reserved for the allotment to the office staff and you have been given the direction to do so. A set of rules for the allotment of the houses has been laid down by you and has been made public. Your personal secretary, who is very close to you, comes to you and pleads that as his father is seriously ill, he should be given priority in allotment of a house. The office secretariat that examined the request as per the rules turns down the request and recommends the procedure to be followed according to the rules. You do not want to annoy your personal secretary. In such circumstances, what would you do?

If you were the Director of the college, what in your opinion would be the most appropriate action?