Questions on Decision Making are asked quite frequently in Banking Exams. The key in Decision Making questions is to take an unbiased decision by leaving the person involved out of the equation.
There is only one correct answer in every decision making question. The decision taken should not change depending on the person taking the decision.
Tips
The decision taken should be based on facts presented in the question. Use the facts, think logically and arrive at a conclusion.
Take the person out of the equation.
Never take a biased decision.
Solved Example
Direction: The passage given below is followed by a set of questions. Choose the most appropriate answer to each question. LFC is a very popular football club that has won several domestic and international accolades since the club's establishment in 1869. Besides having a huge fan following at home and abroad, LFC also has an extensive army of franchises and several exclusive TV deals. This is perhaps why, Kop Limited, a firm owned by two American businessmen, Billet and Cricks, has been contemplating a prospective takeover of the Football club. Billet and Cricks present their offer to LFC's board of directors and manage to win the approval of some of the board members. However, when the news of a prospective takeover finds its way to popular media, many fans are outraged as they see this as commercial exploitation of the club's legacy. Some of the board members too, express concern over LFC being owned by businessmen who have not been associated with the club in the past and might prioritize their own financial interests over the club's well-being. At the same time, it would be difficult for the board to reject the offer without deliberation since they could use the funds from the takeover and this would help them improve the infrastructure and facilities for the LFC squad. The board members of LFC find themselves in a dilemma.
MULTIPLE CHOICE QUESTION
Try yourself: As a representative of Kop Limited, you have been asked to help them convince LFC board members and supporters that the deal would be in the club’s best interests. To create a positive impact, the best decision you could take would be to:
A
Tell the board that Kop Limited will not be involved in the club’s operations.
B
Offer monetary compensation to the board members and free merchandise to the fans.
C
Assure the board of Kop Limited’s history of purchasing other successful sports clubs and seek their help in pacifying the fans.
D
Let the board to draw out a plan of the hierarchy of the club’s administration.
E
Ask for the board’s demands and comply with them as long as the takeover goes through.
Correct Answer: C
The apprehension towards the takeover bid mostly stems from Kop Limited’s limited exposure to LFC’s legacy and culture. Option 1 seems irrational and defeatist. It would seem that Kop Limited has no interest in playing a role in the club’s success. Eliminate option 1. Option 2 would not help change how Kop Limited is perceived and is thus, not advisable. Options 4 and 5, seem hasty and would be perceived as quick-fixes rather than stable long-term solutions that will benefit all parties involved. Option 3 can be deemed as the most suitable decision since it provides Kop Limited a chance to assure the Board of their capabilities and work with them to win over LFC’s fan following. Hence, the correct answer is option 3.
Report a problem
MULTIPLE CHOICE QUESTION
Try yourself: Identify the best rationale that may lead to the LFC board rejecting Kop Limited’s proposal.
A
LFC has been consistently outperforming its privately-owned peers over the past decade.
B
Kop Limited has not bought a sports club outside North America.
C
It is necessary that all fans of LFC approve of the deal since LFC would not be successful without them.
D
Kop Limited could be a stakeholder without a completely taking over.
E
LFC does not need monetary support as much as it needs better administration.
Correct Answer: D
The question requires a suitable reason which would make Kop Limited’s bid seem unnecessary to the club without denying any advantages that the liaison might bring. Option 4 alone manages to keep this balance. Option 1 is ruled out since LFC’s success might not necessarily be due to its ownership as much as it might be due to its players and management. Option 2 does not provide an adequate reason to reject Kop Limited’s bid; their lack of experience in a particular region does not necessarily make their proposal seem harmful to LFC’s interests. Option 3 is absurd; though, it might be true that LFC’s success can be attributed to its fans but one cannot accept a unanimous consensus from such a large number of fans. To reject a proposal on these grounds would be irrational on the board’s part. Option 5 can be eliminated since a takeover need not be limited to adding monetary value alone. Hence, the correct answer is option 4.
Report a problem
MULTIPLE CHOICE QUESTION
Try yourself: Kop Limited has managed to convince majority of the LFC’s shareholders and board members. Talks are being held to decide which concerns need to be addressed before the proceedings start. All of the following are valid points of consideration except
A
Agreement on the means to generate sufficient funds.
B
An evaluation of the club’s existing administration.
C
Seeking approval from LFC’s partner brands.
D
Agreement on a suitable transition plan.
E
Appraisal of LFC’s performance in recent tournaments.
Correct Answer: E
The question seeks a choice that would be irrelevant to Kop’s takeover of LFC. Option 1 is a valid concern since the passage mentions how LFC fans were concerned about “commercial exploitation of the club’s legacy.” Options 2 and 3 are also worth considering for Kop Limited, as the prospective owners of LFC. It is necessary, that the existing management of LFC agrees with Kop Limited on the transition during the change of ownership. This eliminates option 4. Option 5 alone is irrelevant since an appraisal of the team’s performance will not be required as a point of consideration during the takeover. Moreover, the passage states that LFC is a successful football club and such an aspect would have been considered far ahead in time and not at the current phase when the proceedings are about to begin. Hence, the correct answer is option 5.
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