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DM Caselet: Chemical Controversy in Crunchy Chips

XAT 2016 · Decision Making · Medium · Decision Making

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Passage / data set

Recently a private food testing agency reported the presence of a harmful chemical in Crunchy Chips, a product of a fast moving consumer goods giant. The report sparked a nationwide Outcry.

Question 1 of 3

Rajan Shekhawat, the CEO of the company, feared this incident might affect the company's image among consumers. Rajan had the following options:

  1. Apologizing publicly for this inconvenience and immediately withdrawing the products from all stores.
  2. Communicate 'the correct findings' to the public.
  3. Hire a reputed independent testing agency to verify the claims of the report.
  4. Establish internal mechanisms to prevent repetition of such incidences in future.
  5. Give higher incentives to distributors and retailers for selling the company brands.

Which of the following would be the MOST APPROPRIATE ORDER of options for Rajan, starting from the immediate?

  1. A.

    3, 1, 5

  2. B.

    3, 2, 4

  3. C.

    1, 3, 5

  4. D.

    1, 2, 5

  5. E.

    5, 3, 2

Answer

B

Explanation

Immediate action: verify facts independently (3). Next: communicate correct findings to the public (2). Long-term: establish internal quality mechanisms (4). Thus, 3, 2, 4.

Question 2 of 3

Mukesh Routray, a shopkeeper in a remote village was surprised to read in the newspaper, his only source of information, about harmful chemicals in Crunchy Chips. He had stocked a large quantity of Crunchy Chips for the forthcoming festive season. He also realized that people in his village are completely unaware of this controversy. He had the following options:

  1. Sell the entire stock at a discount before the news spreads.
  2. Destroy the entire stock and advise customers not to buy this product from other shops as well.
  3. Donate the entire stock of Crunchy Chips to a local orphanage.
  4. Inform customers about the controversy but understate its seriousness.
  5. Ignore the news and sell the stock at the forthcoming festive season as planned.
  6. Explore the veracity of the report and then take decision

If arranged from ethical to unethical which of the following is DEFINITELY the WRONG order?

  1. A.

    6, 5, 1

  2. B.

    6, 1, 4

  3. C.

    4, 5, 1

  4. D.

    2, 4, 3

  5. E.

    2, 4, 1

Answer

B

Explanation

Selling off harmful stock quietly (1) is more unethical than informing customers even if understated (4). Ordering 1 before 4 in '6, 1, 4' violates the ethical-to-unethical progression.

Question 3 of 3

An independent and trustworthy confidante of Rajan Shekhawat, the CEO of the company, informed him that one of their main competitors had bribed the food testing agency to manipulate the report.

Which of the following actions will BEST help Crunchy Chips to bounce back?

  1. A.

    Proclaim over the media that their product is completely safe.

  2. B.

    Secretly hire a food testing agency to ascertain the quality of the competitor's product.

  3. C.

    Hire another food testing agency to test and communicate the outcome to the consumers.

  4. D.

    File a defamation case against the competitor for their alleged involvement in the conspiracy

  5. E.

    File a defamation case against the food testing agency.

Answer

C

Explanation

Hiring a credible third-party agency to test and transparently report results directly rebuilds consumer trust and provides evidence to debunk allegations.

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