Every human being has to make a decision in a given situation. The decisions may be clearly focussed, confusing, or may have to address the problem in multiple ways. Right or wrong decisions are the everyday part of life which may not be avoided.
Making decisions in business environment is something an MBA aspirant should be aware of. This is probably the reason that XAT emphasises on this module and has developed a separate section with 25 questions on decision making.
Difference between Logical Reasoning and Decision making
Reasoning is related to answering questions from diverse data without human intervention or help. The data is given in some formal system whose semantics is clear
On the other hand Decision Making is a form of reasoning that focuses on answering questions about preferences and choice between/among two or more activities, e.g., in the context of an autonomous agent trying to fulﬁll a task for a human.
Many times in decision making earlier actions aﬀect later decisions. The decisions taken there involve achieving goals or optimizing some criteria such as plan length, actions’ cost, or future expected accumulated reward.
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Questions as asked in XAT
A passage with certain information is followed by 4-5 questions. Each of the questions is again followed by 4-5 close decision making answer options.
The questions may be on what should be the decision in the given situation, how should it be taken, why should it be taken-factors influencing the decision or who should take it.
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Key points to arrive at the right option
The first and foremost thing is to read and understand the given data, facts, information in the passage. It is advised to go through the information with an open mind and read it attentively.
Now read the questions one by one. Try to get to the core of question as what is being asked for.
Then move to get the available information, whether you have all of that or the requirement is more than the availability.
Now comes the time to analyse the information in right perspective and fit it into a problem solving structure. Once the data given is classified, arriving at the answer will be easier.
Answer question nos. 1 to 6 on the basis of the information given in the following case.
Teknik Group of industries had businesses in different sectors ranging from manufacturing, construction, fish farming and hotels. These different businesses operated as semi-independent units managed by the unit level managers. Teknik's management had an internal consultancy group called as Business Advisory Group (known internally as BAG). The 15 experts in BAG were hired personally by Mr. Teknikwala, the owner of Teknik, who wanted this core group of experts to help his organization grow fast without facing the typical growth hurdles. Most of them were specialists in fields like law, information technology, human resource management, and operations management. Almost all of them had experience spanning decades in the industry. Whenever any of the units faced any significant problems, the unit level managers would put up a request for help to BAG. The problems ranged from installation of internal MIS systems, to financial advice related to leasing of equipment, to handling of employee grievances.
Over a period of 20 years, Teknik's revenues grew from ` 100 crore ` 10,000 crore with guidance of BAG and due to Mr. Teknikwala's vision. Given its reputation in the industry, many people wanted to start their careers in BAG.
Often young MBAs, fresh out of business schools would apply. However their applications used to be rejected by Mr. Teknikwala, who had a preference for people with extensive industry experience.
Things changed after the unfortunate demise of Mr. Teknikwala. His daughter Miss. Teknikwali took up the family business. She was an MBA from one of the premier business schools, and was working in a different company when Mr. Teknikwala passed away. She preferred that BAG develop new ideas and therefore inducted freshly graduated MBAs from premier business schools. She personally supervised the recruitment and selection process. Now the entire group constituted of 50 specialists, out of which 35 were the old time members. She also changed the reporting relationships in the BAG group, with some of the older members being made to report to the new members. In IT team, Mr. Shiv, a newly recruited MBA, was made in-charge. For the older members it was a shock. However, as most of them were on the verge of retirement, and it would be challenging to search for new jobs while competing with younger professionals, they decided to play along.
After one month, all business units were caught up in the ERP fever. This was an idea pushed by Ms. Teknikwali who thought there was need to replace the old legacy systems with latest ERP system integrating all the units of Teknik. This was heavily influenced by her experience in the previous where an ERP system was already up and running. Therefore she was not aware of the difference between installing an ERP system and working on an already installed one.
The ERP implementation in Teknik Group required extensive coordination with senior level managers of all units and it represented an extra work for those who were involved. This coordination was required to understand the different work processes and the users' requirements. This coordination activity was being extensively managed by the old timers as they were familiar with internal processes and people in the different units. An external consultant was also hired for customisation and implementation.
After two months, BAG teams had to fortnightly present their progress to Ms. Teknikwali's team. In the last meeting Ms. Teknikwali was dissatisfied. She explained her thinking that since ERP impacted every aspect of the business, the roll out had to be done faster.
She wanted Mr. Shiv to get the implementation completed ahead of schedule. In the meeting she asked Mr. Shiv to get the people in IT team to be more productive. Not willing to disagree, Mr. Shiv committed to a roll-out schedule of complete ERP system in 6 months instead of earlier decided 14 months.
Next day, Mr. Shiv presented the revised project milestone to BAG members. He told them that in order to meet the deadline, the members were expected to work on week-ends till the completion of the project. Along with that, they were also expected to maintain their earlier standards of delivery time and quality for the normal trouble-shooting and internal advisory work. Mr. Shiv also pointed out that anyone whose performance did not meet the expectations would be subjected to formal disciplinary action.
The meeting ended without any member commenting on Shiv's ideas, although Mr. Shiv heard a lot of mumbling in the corridor. Over the week, Shiv noticed that the members seemed to avoid him and he had to make extra effort to get ideas from them. After a fortnight Shiv reviewed the attendance register and found that Mr. Lal, an old time member, had not come during the week- ends and certain decisions were held up due to lack of inputs from Mr. Lal. Mr. Shiv issued a written reprimand to Mr. Lal. He was speechless on receiving the reprimand but kept silent.
It has been three days since that incident. Some of the senior members had put in request for transfer to other business units. It was rumoured that four senior legal experts had agreed to an offer from a law firm. Other senior members would sporadically come in late to work, citing health reasons. Almost all senior members now wanted a weekly work-routine to be prepared and given to them in advance so that they could deliver as per the schedule.
This insistence on written communication was a problem as urgent problems or ad-hoc requests could not be foreseen and included. Also, normal services to other business units were being unattended to, and there were complaints coming from the unit heads.
Answer the following questions
Q.1. It can be inferred from the above case that implementation of an ERP package in an organization requires creation of a team that has:
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