business judgement book-xat

7/28/2019 Business Judgement Book-XAT

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This book is designed to provide readers a comprehensiveorientation to Business Judgement Fundamentals. It containsthe important theory related to Business Judgement questionsand lot of practice exercises relate to the same.

There are eight Business Judgement tests along with theimportant theory. The Theory part of the book will be discussedby the faculty in the class, while the test assignments have tobe taken by the students as a home-work exercise.

A sincere student must solve this assignments atleast two tothree times.

I f you have any quer ies , p lease wr i te to us a [email protected]

Best Wishes !

Business Judgement Book

J


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Survival in todays harsh economic times has become critical. A miss here or therecauses untold havoc. Anything short of accuracy is inexcusable. In businesses, acumenand gumption are called for. While the latter is either inborn or can be acquired in acourse of time, the former needs to be sharpened, honed and shaped so that one hasthe cutting edge over competitors and contemporaries.

Decision making is a challenging, yet an unpleasant task. Invariably, the

consequences of a decision made and implemented fall on the decision maker. He orshe becomes the cynosure or the butt of criticism, uncharitable talk and the subject ofmeaningless discussion.

But decision making cannot be avoided. It becomes an inseparable constituent ofmans living. Be it in social, domestic, professional or business spheres, decisionmaking is there for all times.

The skill-set or tool required for decision making is judgement. Judgementrequires a sharp insight, focussed application of mind and precision oriented mindset.Business judgement, is associated with the outcome of decision making that has aninfluence over the functioning, sustenance, reputation and strength of a business andhence is certainly a vital skill set to be developed and nurtured. Basically, BusinessJudgement is all about ones reading habits, the power of comprehendingand assimilating the written stuff. The more one reads, the vaster would be thearea of exposure. The ability to sift the chaff from the grain, to segregate theunimportant and the irrelevant from the important and the relevant, and that toospeedily, is the key skill required. A businessman is required to decide on variousmatters, using the judgemental skills at disposal. Matters, of which no prior backgroundexisted and to which the businessman has scanty exposure, come under decisionmaking. An overall knowledge, a general awareness, commonsense and a clarity inthinking is needed. All situations are not similar. Some may require a superficial handling,some may call for profundity or depth. There is no universal rule or formula or a law tobe followed, unlike in science. Each situation has to be tackled on a case-to-casebasis, using native intelligence, acquired learning and inherited wisdom. A workingknowledge of the laws and precedents come handy in arri ving at a decision, yet mostof the decisions are situational and cannot be standardi sed as theory.

The book is a set of case situations in business spheres. Cases cover diversecircumstances. Each is representative of a typical situation faced in real life. Eachcase is bounded by constraints and assumptions which have to be considered whenarriving at a decision. The case itself might contain unwanted and irrelevant matter.The reader is required to retain the required stuff and discard the rest. Some of thequestions are direct, some are inferential and entail read ing between the lines.

Business Judgement


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The mode of teaching in most of the management institutes is through cases. Theoreticalknowledge is more than matched by pragmatism and commonsense. Knowledge andapplication of law is essential. A statute or a provision under an Act or a law is quoted,a situation is described and the learner is asked to arrive at a decision using thosestatutes and provisions.

Hence the objective of this book is to equip the learner with

(1) good reading comprehension.

(2) an ability to recognise and categorise data as required by the problem in a minimumpossible time.

(3) an ability to recognise data and its importance.

In other words, Business Judgement comprises Reading comprehension (RC), DataApplication (DA) and Data Evaluation (DE) skill s.

Business Judgement, to sum it up, is all about the clear understanding of the goal, thetheme of the decision, factors and the assumptions made by the decision maker.

Basics of Business Judgement

As has been repeatedly mentioned earlier, a good reading and comprehending poweris very important for many aspects of the MBA entrance test, including the BusinessJudgement portion. The reading skills help you to understand maximum amount ofdata in the minimum possible time and also help you to properly categorise data as

required by the problem.

Following is a detailed explanation of the terminologies used in context of BusinessJudgement problems.

Data Application Problems

In a typical BJ problem you will be given a lengthy passage containing a standardBusiness situation with lots of facts and figures. The Data Application problems will bebasically of the Reading Comprehension (RC) type which you have attempted in detailearlier. Each question is followed by (4) or (5) options, as the case may be & thestudent is required to choose the best option. Some typical question formats could be

a. The author basically implies that .....b. It can be inferred from the passage that .....

c . We may conclude that .. .. .

The basic difference between BJ and RC would be that the case would be predominantlyrelated to a business situation and in some instances may require application of commonbusiness sense to judge certain situations.


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Data Evaluation Problems

This is the most important form of problems posed under the BJ section. You will begiven different conclusions / statements / assumptions / items and would be requiredto classify each of these under one of the following categories viz.

1. MAJOR OBJECTIVE: An objective is a final result desired by someone. Hence amajor objective is the most important result desired. It is the aim or the majorpurpose of some action.

2. MAJOR FACTOR: A factor is used to determine the decision. Thus a major factoris a basic factor influencing a decis ion. It might affect the basic reason for someaction.

3. MINOR FACTOR: It is a secondary/less important factor affecting the decisiontaking process.

4. MAJOR ASSUMPTION: It is the basic/primary assumption made by the decisionmaker in order to make the decision.

5. UNIMPORTANT ISSUE: It is not significantly related to the decision makingprocess.

tututtu

Classroom Exercise

The Company: Wingfleet, Inc., is the fourth largest aircraft manufacturer i n theworld. Last year, the companys sales revenues were slightly under two billion dollars.Wingfleet, an old company in terms of aviati on history started production in 1921,struggled through the depression, and entered World War II as a medium-sizedcompany. Thousands of fighters and bombers rolled out of Wingfleets factories. Itgained a world wide reputation for well designed and well-constructed military aircraftand continued to grow until the l ate 1960s. It now employs over 100,000 people inmany plants throughout the U.S. The suppliers of Wingfleet employ another 75,000workers. In short, Wingfleet is a solid supporter of the nations economy.

Opportunity: The 2L-1000 John Franco, Chairman of t he Board of Directors of

Wingfleet, carefully studies a lengthy proposal by an executive committee, consistingof three board members and three vice presidents, recommending that the companyshould bid on a new military-transport plane, the 2L-1000. This will be the largest andone of the fastest transport planes in the world. It will take at least six years todesign, test, and bring into full production the 115 planes to be built for the government.The project will provide jobs for 25,000 Wingfleet workers, plus 20,000 jobs forWingfleet suppliers.


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Advantages: Nearly 90% of Wingfleets business is with the U.S. Government.Therefore, the aircraft manufacturers sales revenue is dependent on the federalbudget. During times of national emergency (such as the cold war, the Vietnam andKorean conflicts), Wingfleet does very well. But lately Congress has cut defenceexpenditures, and these cuts have greatly reduced Wingfleets earnings. In 1966, forexample, Wingfleet showed a profit of 51 million dolla rs. But last year, the companylost $ 33 millions.

Thus it would be advantageous for Wingfleet to enter the commercial aircraft field todiversify its sources of revenue, and, paradoxically, this is one of the reasons why theexecutive committee recommends going all out to get the 2L-1000 contract. The hugetransport, with slight alteration in design, will make an excellent commercia l passengerplane, the committee claims.

In this connection, a preliminary survey of major airlines showed that nine domestic

and foreign airlines indicated their willingness to order 201 of these commercial planes.Furthermore, should Wingfleet get the government contract, these airlines wouldorder the planes and make immediate and substantial down payments.

Wingfleet has a tentative, but exclusive, contract with the Ponzal Company, one ofEuropes leading engine manufacturers to design and produce the planes engines.This contract depends, of course, on whether Wingfleet decides to bid on the militarycontract and gets it. The fact that Ponzal engines will power the 2L-1000 should makethe Pentagon regard the Wingfleet bid favourably.

Dangers: John Franco ponders the possible problems that might arise should Wingfleettake on this enormous project. In order to get the contract against vigorous competitors,Wingfleet must make the lowest bid, which is estimated at 1.7 billion dollars if everythinggoes perfectly. Therefore, the executive committee suggested a bid of 2 billion dollars.But John Franco is aware, after 33 years with the company, that it is rare when actualdevelopment costs do not exceed estimates. He realises that two or three major

structural problems would quickly eat up the million-dollar gross profit.

On the other hand, he figures, costs over bid might not be disastrous. It is possible torenegotiate a government contract when cost overrun occurs. Wingfleet has donethis many times. In fact, cost overruns average 50% over accepted bids, and thesehave usually been made up by the government. However, John F ranco wonders ifCongress in its present anti-military spending mood would approve an appropriation tomake up the difference.

Franco is also uneasy about the Ponzal Company. He has no doubt about the quality ofPonzal engines, but the foreign firm is nationalised. Its profit have been almostnonexistent for the past few years, and governments, he has discovered, are far lesspatient with losses than capitalist shareholders. Suppose the European governmentthat owns Ponzal decides to liquidate the engine company in the middle of the 2L-1000contract? He shudders at the thought.

Even though the airlines put down substantial payments for the 201 civilian planes,this money will not solve Wingfleets poor cash position. The company must depend on25 banks to advance half a billion dollars for the 2L-1000 project, and this will addsubstantially to Wingfleets overall debt.

Finally Wingfleet has tried to enter the commercial airplane field three times withoutsuccess. The failures could not be blamed on inefficiency or lack of knowledge of themarket, because careful surveys preceded each attempt. Yet each time Wingfleetguessed incorrectly. Could this happen again?


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Decision: Despite his many misgivings, John Franco decides to recommend to the fullBoard of Directors that Wingfleet make a 2 billion dollar bid for the 2L-1000 contract.

Data Application Questions

1. Most of Wingfleets income is derived from sales to

(1) Foreign governments. (2) The U.S. governments.

(3) Domestic airlines. (4) Manufacturing companies.

(5) Private agencies.

2 . According to the passage, Wingfleets earnings are errat ic due to

(1) Poor management.(2) Cost overruns.

(3) The vagaries of the federal budget.

(4) Attempts to enter the commercial aircraft field.

(5) High bank debt.

3 . One of the advantages of the 2L-1000 contract for Wingfleet would be that(1) the contract will lead to other government contracts.(2) Congress doesnt particularly care what the cost will be.(3) the contract will keep Wingfleet from going bankrupt.(4) the military plane can also be sold to foreign governments.(5) a change of design can change the military plane into a commercial one.

4 . A preliminary survey of major air lines shows that they(1) see no advantages in purchasing a commercial counterpart of 2L-1000.(2) will purchase 201 planes of the 2L-1000 type with substantial down payments.(3) will consider purchasing passenger planes after the 2L-1000 is produced.(4) have no funds to buy new planes.(5) are willing to lend money to Wingfleet to make the 2L-1000.

5 . Regarding the 2L-1000 contract, the Wingfleet executive committee suggeststhat it(1) make a bid for the 2L-1000 contract.(2) postpone a decision until there is further study of the project.(3) turn down the contract.(4) make a low bid to secure the contract.(5) try to sell more of the commercial counterpart of the 2L-1000.

6 . John Franco considers that problem with cost overruns is that(1) Congress has frowned on paying these costs in the past.(2) the loss would have to be sustained by Wingfleet.(3) in its present mood Congress might not approve these extra costs.(4) the government has little experience with overruns since they happen so

infrequently.(5) they would indicate that Wingfleet is very inefficient.


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7. One reason that the Pentagon might favour Wingfleet is that(1) Wingfleet has an excellent reputation in manufacturing commercial planes.(2) the national economy might be thrown into chaos if Wingfleet does not get

the contract.(3) so many banks are willing to back Wingfleet.(4) Wingfleet has already built a plane very similar to the 2L-1000.(5) Ponzal engines will be used.

8 . Which of the following is a major concern of John Francos regarding the 2L-1000PROJECT?(1) Wingfleet does not have the technical ability to produce such a plane as the

2L-1000.(2) The Wingfleet bid might be too high.(3) Wingfleets suppliers in the U.S. might become bankrupt before the project

is finished.(4) Ponzal might be liquidated.(5) A commercial counterpart of the 2L-1000 might be impractical.

9 . Which of the following best describes Wingfleets financial situation in itsconsideration of the 2L-2000 contract?(1) Wingfleet will have to depend on many banks to produce the 2L-1000.(2) Wingfleets cash position is excellent because of recent high profits.(3) Wingfleet will need to obtain foreign capital.(4) Wingfleet has little bank credit.(5) The down payments from the commercial airlines will provide enough cash to

Wingfleet to see it through the 2L-1000 contract.

10. Which of the following best describes Wingfleets past experiences in aircraftmanufacturing?(1) Wingfleet has had little luck in entering the commercial aircraft industry.(2) Wingfleet was most successful in the commercial aircraft field, but gave this

market up.(3) The company avoided military plane production.(4) The manufacturer has shown consistent losses on government aircraft

contracts.(5) Wingfleet saw no reason to produce commercial aircraft.


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Data Evaluation

DI RECTI ONS: Based on your analysis of the situation, classify each of the followingconclusions in one of five categories. Check :

(1) for the conclusion to be a major objective in making the decisioni.e. the outcome or result is sought by the decision-maker.

(2) for the conclusion to be a major factor in arriving at the decisioni.e. a consideration, explicitly mentioned in the passage is basic indetermining the decision.

(3) if the conclusion is a minor factor in making the decision i.e. it is asecondary consideration that affects the criteria tangentially,relating to a Major Factor rather than to an Objective.

(4) if the conclusion is a major assumption made in deliberating i.e. itis a supposition or projection made by the decision maker beforeweighing the variables.

(5) if the conclusion is an unimportant issue in getting to the point i.e.it is a factor that is insignificant or not immediately relevant tothe situation.

11. Entrance into the commercial aircraft market

12. Possible cost overruns of 2L-1000

13. A projected six year period to p roduce the 2L-1000

14. The ability of the 2L-1000 to be modified into a commercial plane

15. Ninety percent of Wingfleet business has been with the United States government

16. Down payment by airlines

17. The willingness of airlines to order 201 planes

18. Diversification of the market

19. Recent drop in Wingfleets profit

20. Wingfleets experience in manufacturing military planes


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DI RECTI ON for Q.21 25: These questions are based on the provisions of theFactories Act 1948.

Section 21: Dangerous part of every machinery is to be surelyfenced.

(1) Examination of machine in motion by trained adult male worker.The name of the person so engaged shal l be entered in theprescribed register. Further he shall be furnished with a certificateof appointment.

(2) No woman or young person shall be allowed to clean, lubricate oradjust any part of machinery in motion.

Section 62 (1- A): No adult w orker shall be required or allowed in any

factory unless his name or other part iculars have been entered in theregister of adult workers.

Section 66: A woman shall be required or allowed to work in the factoryonly between 6 a.m. and 7 p.m.

I n each of the given questions, choose the best alternative.

21. P an apprentice fitter, was injured while cleaning a dangerous part of a machinewhich had been manufactured abroad. The machine was unfenced whileadjustments were made to it. Is there violation of the Factories Act?

(1) No violation of the Factories Act.

(2) Yes according to Section 21.

(3) Yes, according to Section 21 and Section 62(1).

(4) Data insufficient to answer the question.

22. Wives of 3 workmen employed in a textile factory work in a place of their husbandsfor about half an hour every day after 7 p.m. while the latter take meals broughtby them. Is there a violation of the Factories Act?

(1) Yes, prime section violated being 62 (1-A).

(2) Yes, prime section violated being 21 (2).

(3) Yes, prime section violated being 66.

(4) Both (1) and (3).

23. If based on information given in the previous question, women are also workers on thefactory roll. Is there violation of the Factories Act?

(1) Yes, prime section violated being 66 (1-A).

(2) Yes, prime section violated being 21 (2).

(3) Yes, prime section violated being 66.

(4) None of the above.

24. Based on information given in Q.22 how many sections are violated maximally?

(1) 1 (2) 2

(3) 3 (4) 4


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25. Based on information given in Q.22 if one of the women should be injured, thenaccording to you, who would be penalised?

(1) the factory manager. (2) the worker.

(3) the workers wife. (4) all of the above

DI RECTI ONS for Q.26 30: For the following questions, choose the alternativewhich most logically follows the idea or information given in the statements givenbelow.

26. The objective of the Employees Provident Funds and Miscellaneous ProvisionsAct, 1952 is to p rovide for the inst itut ions o f provident funds, family pens ions,and deposit linked insurance schemes, for employees in factories and other

establishments.(1) All tea plantations must be brought under this act with immediate effect.

(2) The schemes of provident funds, especially, are a social security measureand are meant to induce employees to save a part of their income for a rainyday.

(3) The amount which goes into the provident fund is a whopping 81/3% of the

employees wages.

(4) Provident fund is meant to provide for the dowry of a marriageable daughter.

27. Premium is a term which has a wide usage in business circles. The most importantusage is

(1) an individual getting a reward for meritorious service.

(2) a payment promised by a policy holder for indemnification of losses sufferedin the course of business.

(3) the difference payable for purchase of new bonds or stocks over the originalselling price.

(4) payment for extinguishing an obligation before it falls due.

28. The term bear in stock market jargon means

(1) One who is a rumour monger in the bourses.

(2) One who sells the shares in a flurry precipitating their prices.

(3) One who indulges in inside trading.

(4) A very respected person in the bourses.


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29. Multiple shop, a large-scale retail organisation, is generally owned and managedby a Joint Stock Company. The general frame work of multiple shop retailestablishment will be like any company form of commercial organisation. The multipleshop system of retailing is thought of as

(1) a compromise between centralisation of company and decentralisation ofselling.

(2) a method of increasing the turnover by providing facilities of credit and freedelivery.

(3) a way to achieve standardisation in appearance, products, prices and control.

(4) a tool to provide sufficient employment opportunities at the supervisorylevel.

30. The storage of goods is made possible by the network o f warehouses speciallyconstructed for this purpose. Warehousing can be defined as the assumption ofresponsibility of the storage of goods. By means of warehousing

(1) you can improve the quality of goods and preserve them for long, if they arenot in good condition when going into storage.

(2) you can hold stock of goods for any length of time awaiting an increase inprice for sale with maximum advantage.

(3) you will be able to avoid the delay in waiting for the arrival for the goodsfrom the producers, complete other functions such as assembling, dividingetc. in time.

(4) the producers can realise the sale value immediately without waiting for theactual sale by the retailers.

DI RECTI ONS for Q.31 35: In the following questions, there is a short situation/passage followed by a question. Choose the alternative which most logically followsthe idea or information given in the situation/passage.

31. You have an incomprehensible maze of application systems, technology tools andplatforms. There are many old legacy systems and many new system developmentprojects underway. In spite of stated objectives to integrate efforts, each projecttends to operate autonomously. You want to organize, simplify and streamlinethe systems. You want to reduce the variety of technologies used and invoke amanageable set of standards. But first you must find a more meaningful way tomap out what you have now, clarify where the development projects are going,and which tools support which parts of the business.

What can be the most valid reason for trying to integrate all the systems?

(1) Bringing innovation.

(2) To reduce system complexity and increase efficiency.

(3) Technological upgradation.

(4) Integration is not needed as it kills diversity.


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32. Market changes require that you participate in e-business. This demandsfundamental changes in the way business is conducted. What specific changeswill be required for your business, and what will be the total impact? How muchwill this cost? What will happen as the changes are implemented? You need aroadmap to pinpoint where and how the sequence of changes should take place.You need an architectural framework to show how a change to one part of thebusiness will impact other parts of the business as the transition moves forward.

What is the most important cause for participating in e-business?

(1) It is customers preference.

(2) Internet penetration makes it mandatory.

(3) It is simple.

(4) Changing markets make it imperative.

33. Out of the number of foreign workers by industry in 1998, the top was 71, 198 inthe manufacturing industry, followed by 24,752 in the service industry. Out ofthe number of foreign workers, as per the types of jobs, 70,173 were productionprocess workers and 21,983 were professionals, engineers and administrators.According to the Ministry of Justice, at the end of 1997, foreigners living in Japanwho registered under the Alien Registration Law were about 1.5 million. 83.6% ofthose with engineering skills and 87% of those with technical s kills were fromAsian countr ies, and 66% of those with educat ion skil ls were from North America.

Person of which country has the highest probability of getting a job as technicalco-ordinator in an auto firm in Japan?

(1) France (2) U.S.A.

(3) Singapore (4) U.K.

34. Manufactured products are made from atoms. The properties of those productsdepend on how those atoms are arranged. If we rearrange the atoms in coal wecan make diamond. If we rearrange the atoms in sand (and add a few other traceelements) we can make computer chips. If we rearrange the atoms in di rt, waterand air we can make potatoes.

What according to the passage is most true?

(1) Computer chips can be got from potatoes.

(2) It is the arrangement of atoms that makes the difference.

(3) Molecular structure is independent of atomic number.

(4) It is the atomic number of atoms that decides the end products.


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35. In the future, nanotechnology will let us take off the boxing gloves. Well be ableto snap together the fundamental building blocks of nature easily, inexpensivelyand in almost any arrangement that we desire. This will be essential if we are tocontinue the revolution in computer hardware beyond about the next decade,and will also let us fabricate an entire new generation of products that are cleaner,stronger, lighter, and more precise.

In what context, take off the boxing gloves is used here?

(1) Nanotechonology will diminish the country barriers.

(2) Nanotechonology will help in work and creation at a more miniature scale.

(3) Nanotechonology will help in creating better life styles.

(4) Nanotechonology is a boon.

DI RECTI ONS: Read the given cases carefully and answer the questions followingthem.

Case No. 1

Sigmund Johnson was an aeronautical mechanic having joined the Chicago plant ofFlights Progress Inc., U.S. as an apprentice way back in 1954. His initial responsibilitieswere indeed trivial by nature, ranging from spare parts cataloging to maintaining theregisters for dai ly attendance in his shop. His immediate boss was Rob Butler, who hadbeen on the shop-floor for the last 6 years, havi ng undergone promotion once. He(Rob) reported directly to the Section Manager Mr. Tom Moody who in turn presentedthe daily reports of the progress in the shop-floor to the General Manager Mr. ArthurMcDouglas.

Sigmund was extremely meticulous by nature and tended to be a perfectionist attimes. His aim would always be to perform the task in the most clean, precise, andcorrect manner. This led him to suggesting the restructuring of spare parts stackingmethods in the company warehouse. This, he claimed, would reduce the retrievaltimes by as much as 50% or more. At that time, the company warehouse operationswere not computerised and hence procuring an item from the warehouse was extremelytime-consuming. His idea was not apprecia ted by Butler who probably saw danger tohis status and power. However, the enterprising Sigmund approached Mr Moody anddiscussed his plan with him. Mr Moody was very impressed by the plan and ordered itsimmediate implementation. This caused considerable friction between Sigmund andButler and gradually their rapport worsened. The matter reached a flash point whenSigmund found out that the implementation of the plan was being unduly delayed byButler to prove his authority. Sigmund decided to ask Mr Moody for a transfer to theSeattle plant of the same company. Considering his record and aptitude, Moody decided

to shift him to the latest and most modern hydraulic shop of the Chicago unit itself.When Johnson joined the new shop, he could sense the spirit of urgency andcoordination in the atmosphere. In fact the new shop was instrumental in implementingthe latest design of the Research & Development Cell at the company headquarters atBoston. This design was a major shift from the earlier and the then prevalenttechnologies of landing gears of aircraft and could also be used for milita ry purposes.This design, it was thought, would change the fortunes of the company by projecting


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it as a technology driven and innovat ing company, quite unlike the stereotyped versionof a stagnant company.

Johnson was once again a very happy man. He had an extremely professional workenvironment coupled with cooperating and intelligent colleagues and seniors. Onceagain, Johnson set himself in motion under the guidance of his new boss, Perry Simpson.But Johnson was in for a major surprise when within 2 months of his joining the newshop, he received a promotion order from Mr Tom Moody who terminated hisapprenticeship and made him the Junior Technical Supervisor under Perry.

It was the most exciting period of Sigmund Johnsons life. He took part in everyactivity in the shop floor with full interest and soon became the most popular figurethere. Promotions came fast: Senior Technical Supervisor (1957); Junior Floor Manager(1959); Floor Manager (1962); Section Manager (1965); Senior Section Manager (1967);Divisional Manager (1970) and Director (1972). It was a meteoric rise for him keeping

in mind especially his educational background which was not particularly distinguished.

Now Johnson regularly attended the Board meetings and was a highly respected figurein the company circles, especially for his technical knowledge which he largely gainedfrom the work experience. There were hardly any other senior executives who hadput in so many years of service for the company. The present President of the company,Johnson believed, could retire any day now. He now expected only one final promotion:Presidentship of the company. He knew that a few more years of hard labour couldwell see him to the most coveted post.

The year 1973 saw some major changes in the company policies . Recruitment to thecompany was now strictly on the basis of educational qualifications and relevant workexperience. Freshman entry was restricted only to the most reputed technical col leges.The bombshell for Johnson came in the form of a company regulation specifyingqualifications-based promotions. This, in effect, meant no further promotions forJohnson as he had already received the full benefit of his experience as far as

promotions were concerned. Highly outraged, he stormed into the office of the companyPresident, Mr Donald F. Trumpstone Jr. and demanded a modification to the regulation.The President made it clear to him that no such modifications were possible. Theshocked President witnessed Johnson, who threatened to resign, walk out of hisoffice. However, Johnson soon received a notice of an urgent board meeting (cal ledby the President himself) to discuss the issue with all the other directors.

DI RECTI ONS for Q.1 5: With reference to Johnsons decision to oppose the newregulation, categorise the following question as

(1) a major objective in making the above decision.

(2) a major factor in making the decision.

(3) a minor factor in making the decision.

(4) a major assumption made while making the decision.

(5) an unimportant issue.


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36. Change in guidelines governing the recruitment of fresh graduates.

37. Amendment of the new regulation.

38. Johnsons desire to be the President of the company.

39. Very few candidates in fray for the top post.

40. Present Presidents imminent retirement.

DI RECTI ONS for Q.41 45: For the following questions, select the best option.

41. As far as the personali ty traits of Sigmund Johnson are concerned, which of thefollowing cannot be derived from the passage?

(1) Enterprising nature (2) Irreverence for seniors

(3) Meticulousness (4) None of the above

42. Johnsons request to Mr Moody for a transfer to the Seattle plant was granted.

(1) True (2) False

(3) Not relevant (4) Cant say

43. The author is most likely to agree with the idea that

(1) had it not been for the few contenders for the top post of the President ofthe company, Johnson would never have even thought of it.

(2) had it not been for the intensive technical knowledge of Sigmund Johnson no

one in the company would have objected to his becoming the President.

(3) the role of previous experience in the company has been seriously underminedby the new regulations governing promotions .


44. The company for which Johnson worked was headquartered at

(1) Boston (2) Seattle

(3) Chicago (4) Indeterminate

45. The total number of promotions received by Johnson, as per the passage, was

(1) 6 (2) 7

(3) 8 (4) None of the above


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DI RECTI ONS for Q.46 50: In the following questions, there is a short passagefollowed by a question. Choose the alternative which most logically follows the idea orinformation given in the passage.

46. The rupee continues to fall against the dollar, despite all the tough steps theRBI has taken. Oil Prices continue to remain high And theres reason to believeconsumer demand may be bottoming out. So, even the few sil ver linings amidthe dark clouds enveloping the economy seem tarnished.

Si lver li ning, most probably refers to

(1) Golden clouds that adorn the evening sky.

(2) Tough steps taken by RBI.

(3) Hope of economy revival.

(4) Data insufficient.

47. The Indian government has spent the last six months figuring out how to protectthe automobile industry. Raising tari ff barriers is not an option because under theWTO agreement, India is committed to opening up its markets.

Whats the long term solution then?

(1) Lowering the prices of vehicles.

(2) Making the auto industry more competitive.

(3) Levying antidumping duties.

(4) Signing out of the WTO agreement as it kills local industries.

48. There are people in the workplace who interview well. They dress sharply and

have superb communication skills. Any one of these qualities makes a s trongimpression on the interviewer. But before you a llow one impressive feature toinfluence your opinion of the candidate as a whole, find out if he or she is equallystrong in other areas.

The essence of the passage is

(1) Good communication skills are very necessary to succeed in interviews.

(2) While interviewing, one has to take care that, all facets of a candidate aretested.

(3) A person can be excellent in one area and average in others.

(4) Both (2) and (3).

49. A large part of the story behind the successful exports has been the adaptationof western designs by India exporters, keeping in mind the changing preference

of the clientele abroad.It can be said that

(1) Earlier designers were not modern.

(2) Earlier designers did not know clientele taste.

(3) Understanding clientele preference leads to growth.

(4) Indigenous designers are very rustic.


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50. Beer and Indian-made foreign liquor are routinely filled into bottles that mayhave been used before, or that has probably had other contents previouslypossibly dirty or hazardous-before getting back onto the bottling line.

It can conveniently be inferred that

(1) Liquor is not good for health.

(2) Bottles are undoubtedly recycled.

(3) Beer is freely available in Goa.

(4) Foreigners consume more beer than Indians.

51. Far-flung operations all over the world prompted a construction corporation tocall on Expert sites. They needed a sophisticated communications system to keeptheir construction superintendents in contact with their offices and with eachother. Analysis concluded that they could deal directly with major communicationcorporations to gain the services they needed and any outside assistance wasnot necessary. This company sought professional help instead, stating a goal ofimmediate implementation to make instant communications possible and to learnfrom them how to use the new capabil ities with minimal disruption of work.

The main reason for the construction firm to approach professional help was

(1) To modernize their accessories.

(2) To speed up the communication between various offices.

(3) To give technical support to the employees.


52. Looking to increase in sales, a company created a website to complement othermarketing avenues. Their marketing statistics had proven that putting a catalogin the hands of potential customer resulted in sales. The goal of the web site wasto distribute catalogs to interested customers. Results were realized immediately:the bottom line of sales increased just as predicted by the companys research!

The reason for increased bottom line of sales was

(1) Hard work on the part of employees.

(2) A well chalked out plan of advertising and marketing.

(3) Making the customer feel important by placing a catalog in his hands.


53. A nationally-known advertising agencys website had produced no results for aninternational manufacturer after more than a year online. The sites lack ofresponse was analyzed and a new user-friendly website was developed, with thegoal of opening new marketing avenues for the companys products. Resultswere immediate! Within a week of the new web sites publication, the companyreceived inquiries from prospective dealers and customers in two countries that

had been targeted.What could have been the reason for the failu re of earlier website

(1) It was not user-friendly. (2) It did not include graphics.

(3) Home page was not at tract ive. (4) I t l acked 3-D ef fec ts .


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54. Bottle manufacturers in India are increasingly threatened by widening re-use ofbottles, to the extent, that some manufacturers are now looking to export evenat unremunerative prices.

Threat to bottle manufacturers can be curbed by

(1) Raising import tariffs.

(2) Reducing export tariffs.

(3) Strengthening the bottle-manufacturers lobby.

(4) Discouraging the reuse of bottles.

55. A Florida residential communitys debut on the World Wide Web had a very specificgoal: attracting qualified home buyers from up north and abroad. Using state-

of-the-art technology, lavish photo displays were designed that downloadedquick ly. Immediately following publication in 1996, serious responses came in fromEurope, the Caribbean, Canada and the northeastern US.

Which of the following possibly attracted the buyers most?

(1) Excellent home page.

(2) Excellent content.

(3) Lavish photodisplays with small download time.

(4) The cost competitiveness of products.

Case No. 2

For the past three years, R K Sinha, head of the regional firm RKS Packaging Ltd, had

been seriously considering the use of government grade labeling for its high qualitycanned fruits and vegetables. Having enjoyed an excellent reputation with the publicunder the trademark Taste for more than 30 years, these canned goods were knownthroughout the area by distributors and consumers alike as among the best.

The grade-labeling problem had come to the fore as the result of a new food supermarketchain called Rapid. The new chain, a national organization, was making a deeppenetration in the region by spending a sizeable portion of its large advertising andpromotion budget for pushing its own private brands of frozen and canned fruits andvegetables. Its advertising emphasized that the public could find both grade anddescriptive labeling on each package and can. The descriptive labels listed the type offood, the can size, the number of servings per can, the net contents, and the nameand address of the chain.

Sinha had always paid careful attention to the descriptive labeling on RKS productsbut had been most reluctant to commit the company to the use of grade labeling.

Sinhas reluctance was supported by the companys advertising and promotion managerand the production boss, who believed with him that grade labeling could hardly bringout the fresh flavor and taste upon which the company prided itself and had been ableto capture through its own special heating, processing, and canning techniques.

A factor that seriously concerned Sinha in the use of grade labels on canned fruits andvegetables was the possible use of a high grade on one of the grading characteristicsto offset a low score on another. This method could hardly help RKS, whose pack was


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known by distributors and consumers alike to be much better even than the highestgrades of its competitors.

While Sinha was pondering this problem, he mulled over what he had read about gradelabeling. In the first place, grading and labeling of canned foods had been developedto protect and help the consumer. Through the Department of Food, national standardshad been set up for standardization, grading, and inspection work. To encouragevoluntary use of these standards, the Department of Food hired inspectors who carriedout the national inspection program at production facilities. For canned fruits andvegetables, the grades were A, B, and C, which were based on such criteria asuniformity, succulence, and color not flavour or food value.

Sinha certainly agreed that grade labeling could provide additional information for theconsumer. RKS could also use it in company advertisements to supplement its owndescriptive labels. But didnt everyone know about the taste and quality of RKS products?

He also wondered what happened when a company using grade labeling saw thequalities of fruits and vegetables change from year to year. At one period, thatquality might be high for most growers; it might also be low during another. Somefactors that were very important in their effect on consumer choice could not besubjected to a grading discipline. For example the range of individual tastes wasimpossible to standardize. Certainly taste, Sinha felt, should be at least as importantas the other more tangible criteria used to grade canned goods.

Sinhas legal advisor pointed out that there was another aspect to the problem of gradelabeling. He had been informed by colleagues employed at the Department of Commercethat while the present use of standards was voluntary, such use might become mandatoryin the not too distant future. His contacts explained that their information was basednot on present government plans, but on possible legislation. The scenario went likethis. Several consumer organizations were active in promoting truth in labelinglegislation. Their objective was the provision of more information on packaging so that

consumers could make better decisions on what products to buy. Simply put, it wasargued that consumers could not distinguish between competing products on the basisof present labeling requirements. Present labels contained only the manufactures nameand address, the fact that the contents conformed to food standards, and net weight.No mandatory criteria existed for grade standards. Consumers could judge quality onlyon the basis of trial and error, by trying the product or by reading the advertised claimsof competing brands. Government officials believed that if several of the larger consumerorganizations combined efforts to lobby in parliament for passage of consumer legislation,there was an even chance that a truth in labeling law could be passed within a year.

Sinha weighed the findings of his legal advi sor. He realized that, while taste was theultimate criterion for choosing one brand over another, the initial choice of a particularbrand could be influenced by product grade. Moreover, since RKS p roducts were ofthe highest quality, they would undoubtedly carry the highest possible grades . Sinhawas most concerned about the timing of a decision to accept product grading, which

was at the present time s till voluntary. Would it be to RKS advantage to adopt avoluntary labeling program, or would it be better to wait until grading becamemandatory for all processors? What advantages and disadvantages would result fromtaking a wait and see attitude, rather than immediately commencing a voluntary gradingprogram?

Before Sinha completed his study of the problem, one of his leading competitors, NewFoods, commenced a voluntary label standardization program. Sinha was worried aboutthe possibility that some of New Foods products might be designated grade A quality.


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New Foods could quickly exploit this advantage at the expense of RKS. Thus, grad inghad now become a competitive issue. Sinha felt that he had to make a quick deci sionone way or the other.

The case-study has highlighted the decision to be taken by Sinha regarding whether ornot to adopt the governments voluntary program.

DI RECTI ONS for Q.56 65: With reference to this decision, categorise the followingquestion as



(3) a major assumption made while making the decision.(4) an unimportant issue.

56. Establishment of a new supermarket chain.

57. Likelihood of the legal advisors opinion to be true.

58. Effect on sales of grade labelling of RKS products.

59. Maintaining the RKS brand image.

60. Likelihood that grade labelling would become mandatory.

61. Penetration of supermarket chain Rapid .

62. Influence of consumer groups on government actions.

63. New Foods labels.

64. The 30 years of experience behind RKS packaging company.

65. Maintaining quality of RKS products.

tututu


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Solutions to Classroom Exercise

1.(2) 2.(3) 3.(5) 4.(2) 5.(1) 6.(3) 7.(5) 8.(4) 9.(1) 10.(1)11.(1) 12.(2) 13.(5) 14.(2) 15.(2) 16.(3) 17.(2) 18.(1) 19.(2) 20.(3)21.(4) 22.(4) 23.(3) 24.(1) 25.(1) 26.(2) 27.(3) 28.(2) 29.(1) 30.(3)31.(2) 32.(4) 33.(3) 34.(2) 35.(2) 36.(5) 37.(1) 38.(2) 39.(3) 40.(4)41.(4) 42.(2) 43.(4) 44.(1) 45.(3) 46.(4) 47.(2) 48.(2) 49.(3) 50.(2)51.(2) 52.(3) 53.(1) 54.(4) 55.(3) 56.(2) 57.(3) 58.(2) 59.(1) 60.(3)61.(2) 62.(4) 63.(2) 64.(4) 65.(1)

Explanation1. It is clearly mentioned under the heading

Advantages, that 90% of Wingfleets business

is with U.S.Government. Hence (2).

2. It is again mentioned under the heading

Advantages, that, ... sales revenue is

dependent on federa l budget . Hence (3).

3. Given in 4th para.

4. Given in 5th para.

5. Mentioned in the 2nd para - . . .. . ..

recommending that the company shou ld bid

on a new military - transport plane, the 2L -

1000.

6. Mentioned clearly in the 8th para.

7. Mentioned clearly in the 6th para.

8. Given clearly in the 9th para.9. Mentioned clearly in the 10th para.

10. Clearly mentioned in the opening line of 11th

para.

11. Undoubtedly this is a major objective.

12. It is clearly mentioned in 8th para that, John

Franco, wonders if Congress would approve

of an appropriation. Hence it is a major factor.

13. No where in the passage has this point been

mentioned. Hence it is an unimportant issue.

14. It is clearly given in the last line of para 4 that,

....... slight alteration in design, will make an

excellent commercial plane...... .. Hence it is a

major factor.

15. It is again a major factor because it has been

clearly mentioned in para 3 that, ...... sales

revenue is dependent on federal budget .

16. Here attention is to be paid as to why it is aminor factor and not a major factor. In

10th para it has been mentioned explicitly

that, ..... this money will not solveWingfleets

poor cash position. Hence it cannot be a

deciding factor.

17. It is a major factor. It is to be understood that

though down payment is not a critical factor

but Wingfleet getting order of 201 civilian

planes is a major factor as it shows the

correctness of their decision.

18. Obviously this is a major objective.

19. Mentioned in 3rd para last line. It ought to be

a major factor.

20. It is only a minor factor.

21. Data is insufficient as it is not mentioned

whether Ps name was entered in the

prescribed register or not. Ans.(4)

22. It can clearly be inferred that both, section

62(1-A) and 66 have been violated. Ans.(4)

23. It is clearly mentioned in section 66 that women

shall be allowed to work only between 6 am

and 7 pm. Ans.(3)

24. The women are enrolled as workers. Ans.(1)

25. The obvious and most logical choice. Ans.(1)

26. Choice (1) is absurd, choice (4) is out of

context.Out of (2) and (3), (2) is more logical.

An s .( 2)

27. Premium refers to the difference between

actual value and par value. Ans.(3)

28. (2) is the obvious choice. Ans.(2)

29. Option (1) seems to be the most logical. Ans.(1)

30. Option (3) is the most logical pick. Ans.(3)

31. incomprehensible maze, simplify andmanageable set of standards are the key

words which point to answer (2). Ans.(2)

32. Opening line gives us the clue. Ans.(4)

33. It is directly mentioned that highest

percentage of engineers and technical

workers are from Asia. Singapore is the only

Asian country out of the given four. Ans.(3)


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35. Nanotechnology basically deals with very

small sized components. Hence (2).

A ns .( 2)

36. It is clearly an unimportant issue as the main

aim of Johnsons opposition is concerning his

promotion only. Ans .( 5)

37. It is clearly the objective of Johnsons

opposition. A ns .( 1)

38. It is a major factor because it is this desire on

Johnsons part that led him to oppose the

regulations. Ans . (2 )

39. It is at the most a minor factor as Johnson feels

confident that his chances of becoming thePresident are very bright and that wont be

affected much by the presence of other

candidates. An s .( 3)

40. It is an assumption as Johnson simply had a

notion that the present President can retire

any day. An s .(4)

41. 1st and 3rd are clearly traits of Johnson. As

far as option (2) is concerned Johnsons

barging into Presidents Chamber shows that

he did not respect his seniors. Hence option

(4). A ns .( 4)

42. It is clearly mentioned in the last sentence of

2nd para that Johnson was shifted to

Chicagos most modern hydraulic shop.

A ns .( 2)

43. (1) and (2) can be ruled out. (3) is partly

correct as it is mentioned in the 4th line of last

para that Johnson had already received all

the promotions due to experience and hence

that advantage was over. Hence, option (4).

A ns .( 4)

44. Clearly mentioned in 3rd line of 3rd para.

A ns .( 1)

45. It can be easily deduced from the passage.

A ns .( 3)

46. It has not been mentioned that silver lining

refers to what. Ans.(4)

47. We are talking of a long term solution and (2)

is the only suitable choice. An s .( 2)

48. Though both (2) and (3) are right, the essence

of the passage is in (2). Ans.(2)

49. (3) is the only feasible choice. Ans.(3)

50. The passage talks about bottle recycling and

its ill-effects. An s .(2)


52. It is directly mentioned in the passage. Ans.(3)

53. It has been mentioned that the new web site

was user friendly and it became successful. It

only indicates that earlier website was not

user friendly. Ans.(1)

54. Discouraging the reuse of bottles can be the

only solution. Ans .( 4)

55. It can be directly inferred. Ans.(3)

56. Given in Para 2. It was the introduction of this

chain that spurred management to action.

A ns .( 2)

57. Read the 4th line of Para 7, The information

was based not on government plans but on

possible legislation. Hence, it is an

assumption. Ans .( 3)

58. It is undoubtedly a major factor. An s .(2)

59. It is the major objective. Ans.(1)

60. Read 3rd line of para 7 which tells that, while

the present use of standards was voluntary,

such use might become mandatory,. Hence itis an assumption. Ans .( 3)

61. It is a major factor as can be inferred from para

2. Ans .( 2)

62. It is clearly an irrelevant factor. An s .( 4)

63. It was the introduction of new food labels that

made Mr. Sinha think. Hence, it is the major

factor. Ans .( 2)

64. It is but an irrelevant factor. Ans .( 4)

65. Obviously it is one of the major objectives.

A ns .( 1)


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BJ Test No. 01

For all questions, mark the answers in the SCORE SHEET that is provided AT THE END. Please fill all ovals

properly with an HB pencil / pen.

Scratch work has to be done on test paper itself. You may use a pen or a pencil.


Case No. 1

Prakash Chemicals Ltd. is one of the largest manufacturers of special inorganicchemicals. It started as a small local level organisation and gradually grew into anationally recognised and reputed corporation. The company was able to achieve sucha rapid rate of growth primarily because of its quality consciousness and employeesatisfaction with the company.

However, the liberalisation process set in motion by the current government led to theimport duties on some of the items of the range produced by Prakash Chemicals gettingreduced drasticall y. This created a stiff competit ion in the market and ultimately thecompany decided to close down some of its manufacturing operations. This meant thatthe company would have to close down its branch office at Lucknow. The company hadbeen steadily following a policy of excellent remunerations and job security but it was

now forced to retrench some of its workforce. Another relevant policy the companyhad been following was that in case of an employee losing a job due to reasonsexternal to the company ( like the present ones), he/she would be given preferencefor a similar job over external candidates in the event that any of the company officeswould have a vacancy.

Within a month of the retrenchment taking place, the company had the vacancy of anoffice secretary at its Ahmedabad branch. The Branch manager Mr. Satpal Sharmaadvertised in the newspapers regarding the vacancy. At the same time, he requestedMr. Pratap Khanna, the former secretary at the Lucknow branch to come for aninterview. After a tough selection procedure for the external candidates, Ms. SeemaGupta was short listed for the post.

Now Mr. Sharma was in a fix. Though the company policy dictated that Khanna shouldget the job, Ms. Gupta was definitely a better candidate. She had more work experienceand better educational qualifications. Besides, she also had good offers from otherfirms. After a grueling week, Mr. Sharma decided to appoint Ms. Gupta fervently

hoping that she would stick to the job. When Khanna came to know about it, heimmediately lodged a complaint with the General Manager at the Mumbai headquartersof the company.

The General Manager called Mr. Sharma for an explanation.

Outcome: The General Manager called Mr. Sharma for an explanation.

Time allowed : 20 mins Total questions : 20


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DI RECTI ONS for Q.1 6: The case presents a typical business situation and anoutcome. Considering Mr. Sharmas decision to appoint Ms. Gupta, categorise thefollowing as




(4) a major assumption made while making the decision.


1. The company policy of excellent remunerations and job satisfaction.

2. Better educational qualifications of Ms. Gupta.

3. Selection of the best possible candidate.

4. Governments liberalisation process.

5. Ms. Gupta taking up the job offered by Mr. Sharma and sticking to the company.

6. Overall merit of Ms. Gupta.

DIRECTI ONS for Q.7 16: For each of the items, select option number.

(1) if the item contradicts or is not consistent with the factualsituation or with the outcome.

(2) if the item very strongly explains the outcome.

(3) if the item can be deduced from the actual situation.

(4) if the item cannot be deduced.

7. Mr. Sharma overlooked companys guidelines in the matter of appointing Ms. Gupta.

8. Governments liberalisation process was the main reason for the problems ofPrakash Chemicals Ltd..

9. It was Mr. Sharmas grudge towards Mr. Khanna that led. Mr. Sharma to chooseMs. Gupta.

10. Monopoly of Prakash Chemicals in the market was the main reason for its rapidgrowth.


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11. The management holds the opinion that the interests of the company have higherpriority than personal interests.

12. Within a month, the business prospects of the company started brightening up.

13. In times of pressure, even the best companies are forced to change or modifytheir policies.

14. Inspite of starting at the local level, Prakash Chemicals Ltd. had a meteoric rise ina very short span of time.

15. The companys head quarters in Mumbai gave it an added advantage of greaterexposure.

16. There were only two candidates for the post of office secretary.

DI RECTI ONS for Q.17 20: In the following questions, there is a short situation/passage followed by a question. Choose the alternative which most logically followsthe idea or information given in the situation/passage.

17. Picture this. Its the middle of the day and your factory workers are workingagainst the clock to meet export orders. Theres a knock on the door and a motleybunch of people from an NGO walk in and demand a closed-door session withsome of your workers. Dont close the door on them. It just might be the end ofyour export orders.

What can be the most probable reason for NGO visit ?

(1) Propagation of spirit of workmanship.

(2) A checkup of working conditions in the firm.

(3) They may be terrorists in disguise.

(4) Meeting their relatives.

18. Call it backward integration These days, Pune-based Daniel Fertiliser doesnt justsell fertiliser to farmers. Instead, it offers soil management advice, high qualityseeds and, of course, its own brand of fertiliser. The trigger ? Apparently, the soilin India is generally deficient in sulphur. DFIL has been importing and sellingsulphur-based fertiliser (called Benzosulf) to improve soil nutrition. Soil rebuildingcosts money, but it is possible to reclaim more such arid land, and, thus, increase

the area under crop in India. Yellow could well be the colour of the next greenrevolution.

Ye llow revolution can most probably refer to

(1) Yellow colour of the soil.

(2) Yellow being soothing to eyes.

(3) Sulphur which is yellow in colour and would revolutionise agriculture.

(4) Yellow being trendy in fashion.


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19. Having discovered the larger marketing potential of mega events and celebrityshows, marketers today want events to be an integral part of all customer-relationship management. The challenge before any serious event manager is notjust the activi ty, but to effectively communicate with the consumers and managethe post-event relationship. If the industry estimates are anything to go by,events will garner increasingly more of the marketers promotion funds.

Mega event can serve as brand advertisers .

(1) Agree.

(2) Disagree.

(3) Cant say as information is insufficient.

(4) Irrelevant.

20. It is very difficult to estimate the size of the market, even though lots of peopleare still jumping in. In that sense, an online education market doesnt exist inIndia today. Remember, online educat ion can never substitute the teacher. It cansupplement whats taught is schools and colleges. Thats the crux here: learningcan be enhanced. So, both online and offline education models will co-exist.

On line education will

(1) outweigh the classroom training.

(2) will supplement classroom learning.

(3) create a hollow society based on coded knowledge.

(4) is the need of the hour.

tututu

Please make sure that you mark the answers in this score-sheet with an HB pencil.The marking of answers must be done in the stipulated time for the test. Do not

take extra time over and above the time limit.

SCORE SHEET

1 1 2 3 4 5

2 1 2 3 4 5

3 1 2 3 4 5

4 1 2 3 4 5

5 1 2 3 4 5

6 1 2 3 4 5

7 1 2 3 4 5

8 1 2 3 4 5

9 1 2 3 4 5

10 1 2 3 4 5

11 1 2 3 4 5

12 1 2 3 4 5

13 1 2 3 4 5

14 1 2 3 4 5

15 1 2 3 4 5

16 1 2 3 4 5

17 1 2 3 4 5

18 1 2 3 4 5

19 1 2 3 4 5

20 1 2 3 4 5


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DI RECTI ONS: Read the given cases carefully and answer the questions following them.

Case No. 1

Indiana Foods have introduced a new product, Nutrifit, to combat the problem ofhidden hunger in develop ing countries. Conceptual ised in associat ion with leadinghealth authorities, the introduction of Nutrifit demonstrates both a technologicalproduct innovation and an institutional innovation from the groups involved.

The development and clinical evaluation of Nutrifit was part of a collaborative effortbetween scientists at the Indiana Foods Nutrition Science Institute and leading healthexperts at UNICEF, the Micronutrient Initiative and Cornell University.

Dr. Singer Wilson a Cornell Professor of Nutrition and world-leader in micronutrientdeficiency, was looking for a great-tasting beverage for children, fortified with iron,Vitamin A and iodine that could be tested to determine whether i t was effec tive inpreventing hidden hunger. He approached Indiana Foods because of its expertise infood formulation and its nutrient fortification technology (with these three ingredientsin particular). As a result, Indiana Foods developed Nutrifit, a product containing

Growth Plus, a patented source of iron, Vitamin A, and iodine.Test results from an independent clinical study have shown that the nutrients in Nutrifithelp children grow significantly better, and boost mental alertness and performance.Based on these results, Indiana Foods formed a strategic alliance with UNICEF andseveral local government institutions that have begun taking steps to address theproblem of hidden hunger, and test market Nutrifit in the Philippines.

The purpose of the alliance is to more effectively combat hidden hunger in the Philippinesby raising awareness of the problem and how to prevent it. Indiana Foods also consultedwith these health experts and public health officials to ensure Nutrifit was broadlyaffordable in the Philippines.

Nutrifit fits well with Indiana Foodss vision for its food and beverage business. That visionfocuses on developing foods that provide superior health and nutrition benefits, on a globalscale. Nutrifit is expected to be re-launched in other countries in the near future.

BJ Test No. 02






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DIRECTI ONS for Q.1 7: With reference to vision of Indiana foods choose.

(1) if the item contradicts or is not consistent with the factualsituation or with the vision.

(2) if the item very strongly explains the vision.



1. Launch of Nutrifit was a painstaking process.

2. Iron, vitamin A and iodine are vital for a childs development.

3. Philippines had very acute problem of hidden hunger.

4. Launch of Nutrifit by Indiana Foods.

5. Nutrifit incorporates both technological innovation and institutional innovation.

6. Philippines is a developing country.

7. Mr. Wilson working with Indiana foods.

DI RECTI ONS for Q.8 13: These questions are based on a section of the WorkmensCompensation Act 1993.

Employers liabil ity for compensation (Sec. 3)

An employer is liable to pay compensation to a workman for

(1) personal injury caused to him by accident

(2) occupational disease contracted by him.

Personal inj ury by accident, Section 3(1)

An employer is l iable to pay compensation to a workman if personal injuryis caused to him by accident arising out of and in the course of hisemployment.

Provision: An employer is not liable to pay compensation for personal injurycaused to a workman by accident arising out of and in the course ofemployment.

(1) if the injury does not result in the total or partial disablement of theworkman for more than 3 days;

(2) if the injury not resulting in death, is caused by an accident which isdirectly attributable to

(a) the workman having been at the time of the accident under theinfluence of drink or drugs; or

(b) the wilful disobedience of the workman to an order expressly given,or to a rule expressly framed, for the purpose of securing thesafety of workmen; or


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(c) the wilful removal or disregard by the workman of any safety guardor other device (which is an offence under the Factories Act. 1948)which he knew to have been provided for the purpose of securingthe safety of the workmen.

Occupational di seases, Section 3(2)

Workers employed in certain occupations are exposed to certaindiseases which are inherent in those occupations. As such, theemployer is liable to pay compensation if the disease can be directlyattributable to a specific injury by accident arising out of and in thecourse of employment.

Provision: No compensation shall be payable to a workman in respectof any disease unless the disease is directly attributable to a specific

injury by accident arising out and in the course of his employment.

I n each of the follow ing questions given below mark:

(1) if the employer is liable for compensation under the WorkmensCompensation Act.

(2) if the employer is not l iable for compensation under theWorkmens Compensation Act.

(3) insufficient information regarding situation at hand.

(4) insuff ic ient information g iven above with respect to theWorkmens Compensation Act.

8. A watchman whose duty was to guard the proper ty of the premises of a RestHouse had his quarter within the premises of the Rest House. His duty ended at11 p.m. At 2.30 am. (i.e., within 3 hours of the said 11 p.m.) the guest housewas found ransacked and the watchman found murdered near his quarters.

9. A workman was killed by an accident arising out of and in the course of employment.But the accident had been caused by his wilful disobedience to an order issued forthe purpose of securing the safety of workmen.

10. A boy employed in a shoe factory took home a pai r of boots for repai ring them inorder to improve his skill. This he did contrary to the orders of author ities. Whilerepairing the boots at home he injured an eye and it had to be removed.

11. Sukhiram finished his shift. And left for home, only to return an hour later, on

remembering that he had forgotten his lunch-box. As he headed towards the lockerroom, a heavy piece of machinery fell from an overhead gantry, and Sukhiram diedinstantly.


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12. Dukhiram was a particularly enthusiastic eager-beaver, who frequently worked afterhis normal shift-hours to improve his skills. The shift-manager had frequently made itvery clear that this was unnecessary, and Dukhiram would earn no over-time for hisextra efforts. On one such occasion, when Dukhiram was working beyond his normalshift, his hand was seriously injured.

13. A workman is going to at tend his work and is involved in an acc ident in the courseof journey.

DI RECTI ONS for Q.14 18: For the following questions, choose the alternative whichmost logically follows the idea or information given in the statements given below.

14. Living wage is a wage which we can offer to an employee as incentive to work andto produce enough in quantity.

(1) A literate and intelligent worker will use living wage for steady rise in hisstandard of living.

(2) It is a boon to workers in highly developed countries.

(3) Illiterate, backward and ignorant workers waste the remuneration given byliving wage on vices such as drink, gambling etc.

(4) The components of living wage are bare necessities, insurance cover againstill-health, allowance for expenditure on childrens education, recreation andprovision for saving.

15. Collective bargaining has been considered as a form of industrial democracy andindustrial government.

(1) In collective bargaining, the agreement is usually written in the form of acontract.

(2) Collective bargaining is an agreement under which the employees andemployers undertake to resolve their problems through negotiation eitherbetween them or with the assistance of a third party.

(3) It does not indicate voluntary conciliation and voluntary arbitration.

(4) It deals with the relations between trade unions and the managementrepresentatives.

16. Industrial licensing helps to regulate effectively all industrial activities in a mixedeconomy and is an instrument for achievement of growth, self-reliance, socialand destructive justice.

(1) A licence is an official written permission to start and run an industry.

(2) When an application for an industrial licence is made, a letter of intent isissued within a reasonable time.

(3) The licence provides all essential details such as location, articles to beproduced, the capacity of the industrial unit etc.

(4) Delay and higher cost in the processing of application lead to corruption.


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17. When a trade agreement or practice has the effect, actual or probable ofpreventing, restrict ing, lessening or suppressing competition, it is liable to beregarded as a restrictive agreement or practice.

(1) The MRTP Act 1969, provides machinery to prohibit a restrictive tradepractice when the same is found to be prejudicial to the public interest.

(2) The party has no obligation to prove that the restriction is necessary in theinterests of business.

(3) The difficulty can be overcome by tipping the authorities suitably.

(4) There are nearly nine public interest gateways to the business enterprise toavoid the enforcement of the Act.

18. Taylorism is the name given for scientific management since Taylor contributed a

lot in the field of higher or the top management.(1) Orthodox management was usually based on intuition, tradition, custom or

guess work.

(2) The policy was determined through trial and error without pre-planning.

(3) The decision making process is based on certain principles and laws derivedby the process of scientific investigation of the methods to be adopted.

(4) The managers develop a science for each element of mans work, replacingthe old rule of thumb method.

Case No. 2

A new product system from MP So lar, the multifunctiona l solar facade, comb ines adouble facade with a building-integrated photovoltaic system to produce both electricityand heat as well as a structural component.

MP Solar is a wholly owned subsidiary of MP that manufactures and supplies solarphotovoltaic power systems. For 27 years, they have supplied products to 160 countriesfrom their 20 factories and offices around the world.

As part of their product portfol io, MP Solar have designed integrated solar installations,a multifunctional solar facade system that serves as a building component, and at thesame time generates electricity used by the building.

This system can be used in new buildings as well as in existing structures, where theycan extend an older buildings life through replacement of existing panels. In bothinstances, the integrated faade system demonstrates that the value of solartechnology is not only via the renewable energy it generates, but also via its dualfunction as a replacement building material.

This ability to substitute conventional building materials also has a positive impact on

the final customer price. Costs per square meter of the solar setup vary betweenUS$200 to US$650 per square meter, without allowing any offset value. In comparisonhigh value building material like polished stone can be US$2000 per square meter,glass walls US$500, stainless steel US$200; hence this multi functionality offers newways to increase the take up of the technology.

Expected Result:A Popular choice amongst customers


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DIRECTI ONS for Q.19 25: The case presents a factual situation and an ExpectedResult. For each of the items, select option number.

(1) if the item contradicts or is not consistent with the factualsituation or with the Expected Result.

(2) if the item very strongly explains the Expected Result.



19. The recent product of MP-Solar is multifunctional.

20. Multifunctional solar facades can be used only in new buildings.

21. Affordab ili ty of multi functional sola r facade system.

22. MP is a highly diversified group.

23. The newest product of MP-Solar is versatile in use.

24. The solar setup is costly compared to other building materials.

25. Multifunctional solar facade is robust and gives rigidity to structure.

Please make sure that you mark the answers in this score-sheet with an HB pencil.The marking of answers must be done in the stipulated time for the test. Do not

take extra time over and above the time limit.

SCORE SHEET

1 1 2 3 4 5

2 1 2 3 4 5

3 1 2 3 4 5

4 1 2 3 4 5

5 1 2 3 4 5

6 1 2 3 4 5

7 1 2 3 4 5

8 1 2 3 4 5

9 1 2 3 4 5

10 1 2 3 4 5

11 1 2 3 4 5

12 1 2 3 4 5

13 1 2 3 4 5

14 1 2 3 4 5

15 1 2 3 4 5

16 1 2 3 4 5

17 1 2 3 4 5

18 1 2 3 4 5

19 1 2 3 4 5

20 1 2 3 4 5

21 1 2 3 4 5

22 1 2 3 4 5

23 1 2 3 4 5

24 1 2 3 4 5

25 1 2 3 4 5


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Case No. 1

Foodoo India, a significant player in the processed foods market in India is on theverge of launching a number of processed food products. Among the products lined upfor launching are:

Name Category Expected Market size (Rs. Cr.)

Vego Ready to Cook Vegetables 60

Cheeso Cheese Spread 100

Drinkoo Health Drink 50

Floura Wheat flour 500

The market for most of the processed food categories that ex ist in a lot of developedcountries does not exist in India at all, because of the Indian propensity to avoidprocessed foods. But some changes are being seen in the Indian attitudes now as theexposure to western influences increases.

The major competitors of Foodoo in the processed foods market are Swastik Limited,Alfa, Parina and Indian Foods. The market shares of the various part icipants are:

Swastik 40%

Al fa 8%

Parina 7%

Indian Foods 12%

Foodoo 10%

Unorganised sector Rest.

Swastik Ltd. is the market leader and it is difficult for any of other players to match it

in terms of financial strength, new brand launches, product line width etc. thoughFoodoo with its line-up is getting ready to do the unthinkable. But Foodoo marketingteam is not sure whether it should launch all these products simultaneously, in astaggered manner or at all.

BJ Test No. 03






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With reference to the decision to be made, categorise the following questionitems as:




(4) a major assumption made while taking the decision.


1 . Mckinsey & Co. the global consultants have come out with a report specifying thesize of Indian processed food sector to be Rs. 26,000 crores.

2. Indian Housewives do not allow infringement of their cooking duties.

3. Processed foods consumption is increasing as India becomes economically moreprosperous.

4. Ensuring the success of the new brand launches in face of the cut throatcompetition prevailing.

5. A widely circulated report from die tic ians saying that health drinks do not haveany nutritional benefit.

6. Indians preferring freshly ground flour to the processed flour .

7. A survey ind icating that inspite of their heal th ef fects, Indians pre fer butter as abread spread for their breakfasts.

8. Indian Foods displacing Swastik Limited as the producer with highest market sharein Ice-Cream market.

9. Alf a a US MNC introducing its Alfa brand f lour in the Indian market targetingthe premium segment constituting 10% of the total flour market.

10. Foodoo winning the race to be the retail partner of Indian Oil Corporation at itsretail outlets.

11. Government of India losing a ruling at the WTO Disputes Settlement Panel regardingthe non-quantitative restrictions it has imposed on import of consumer goods.

12. Indian psyche of seeking quality at comparatively lower prices.

13. Out of the Rs. 20,000 crore processed foods market the share of unorganisedsector is (Rs.)

(1) 4600 cr (2) 4.6 billion

(3) 4600 million (4) None of the above.


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14. The size of "Ready to Cook Vegetables" market is n times the size of WheatFlour market. Then the value of 'n' is

(1) 0.21 (2) 0.12

(3) 1.2 (4) 2.1

15. Al fa i s based is the state of

(1) Gujarat (2) Ahmedabad

(3) Maharashtra (4) None of the above.

DI RECTI ONS for Q.16 23: In the following questions, there is a short passagefollowed by a question. Choose the alternative which most logically follows the idea or

information given in the passage.

16. The government has now revived the Disinvestment Commission. The newcommission will advise the government on disinvestment related issues, and willtake into account things l ike employee interest when making its recommendations.But how will it tackle the core i ssue that is holding up d isinvestmentthe refusalof politicians and bureaucrats to give up control over public sector undertakings?Thats not the agenda at all.

From the passage it can be inferred that

(1) Disinvestment Commission will be very effective in speeding the disinvest-ment process.

(2) Disinvestment Commission will be ineffective.

(3) Disinvestment Commission does not address the core issue that impedes

disinvestment process.(4) Disinvestment Commission is a political gimmick.

17. Marketers say innovations arent just a nifty way of luring consumers, butalso a means of reaping long-term benefits.For instance, in an imitator market like that of durables, even a modest noveltyhelps differentiate the brand and the product. Then, theres the technologyimage that rubs on to the brand. The ultimate objective, however, is to makethe consumer preceive better value for money in the new product.

From the passage it can be inferred that

(1) Consumer preference is not the botheration of manufacturers.

(2) Product marketers are on their toes when it comes to innovation.

(3) Marketers are well versed in fooling the customers.

(4) None of the above


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18. Health isnt just a serious concern for a large section of the population, but it isan issue that cuts across age barriers.

The fact that health sells is being put to good use by consumer durables marketers.LG, for instance, hawks the preserve nutrition system in its refrigerators, and Samsungpromotes bio-fresh as the answer to keeping food in the refrigerator fresh.

The underlying theme of the above passage is that

(1) refrigerators have a large market.

(2) the modern generation is relatively less healthy.

(3) health is wealth.

(4) marketers do not leave any marketing area unexplored.

19. Id like you to imagine the worst known disaster that could overtake your com-pany. Visualise your office as a field of Antarctic icean endless white plain bro-ken up by dangerous crevasses. Imagine that you are stuck there, and the near-est human being is 1,200 miles away. Look at those blocks of ice in the fore-ground. Those are your employees. You have to thaw them out, otherwise all ofyou will die.

The passage underscores the fact that

(1) in business even ice can be sold.

(2) doing business is a very tough job.

(3) working with available resources is key to survival in business.

(4) Antarctica is not suitable for any business.

20. Even grocery sites keep going: webrishi.com in Mumbai, and bababazaar.com in

Delhi. Bababazaar has managed to survive for three years, with average dailyorders of Rs 2,000. Its CEOthe ultra-patriotic Indian Bharat Saxena has twovans to service clients and fulfill orders. Far from scaling back, Saxena is revamp-ing his site and plans a larger scale of operations. If you can sell trust andprovide value for money, you can sell anything on the net says Saxena.

It can be inferred that

(1) on net, business is very rarely loss-making.

(2) grocery sites are favourites on net.

(3) net is very effective.

(4) None of the above


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21. While earlier business drove technology, today, it is technology that is the drivingforce behind all kinds of business. Hence, it is mandatory for todays leaders tounderstand technology, and also have a clear vision as to how technology can be bestutilised in business. This is not all. A leader must also have the capacity to communi-cate this vision to all levels of the organisation.

Which of the following is most true?

(1) Technology is a boon rather than a bane.

(2) Technology powers todays business.

(3) Innovation is the mother of all technologies.

(4) Life is dull without technology.

22. With import licensing gone and tariffs reduced, dumping into India has also be-come an issue. And with anti-dumping investigations started within the Depart-ment of Commerce in 1992, and the subsequent establishment of the DirectorateGeneral of Anti-Dumping in 1998, we are getting pretty good at using the anti-dumping agreement as a protectionist device. There were only two cases in 1992-93. But in 2000-2001, there have been 26 cases. Out of 89 cases since 1992,final anti-dumping duties have been imposed in 64 cases. Provisional duties havebeen recommended in 19 cases and imposed in 16. Investigat ions are going on insix cases. Contrary to popular impression, 39 cases are for chemicals and petro-chemicals, and pharmaceuticals chips in with nine. There have only been threecases against consumer goods. And in line with popular impression, 41 cases areagainst China, the EU contributing 21.

It can be inferred conveniently that

(1) Dumping is illegal.

(2) Threat from China in it using INDIA as a dumping ground is not unreal.(3) Dumping is legal.

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