XAT 2026 Decision-Making Sample Questions: Sharpen Your Problem-Solving Skills

Understanding the XAT Exam Decision-Making Section

Decision-Making is a unique section that is only designed for the XAT exam. This section tests some of the important skills required for managerial and leadership positions, like real-world problem-solving skills, ethical & Analytical judgment, etc. In this article, we will discuss some XAT Decision-Making Section Tips and answer some of the common questions asked by students, like:

• Which are the best XAT Decision-Making Test Strategies?

• What does a proper Decision-Making Section XAT Exam Guide look like?

• Give us examples of XAT 2026 Decision-Making Sample Questions.

Importance of Decision-Making in XAT 2026

The XAT Exam Decision-Making section is a very complicated but high-scoring section if students approach it strategically. This section tests students' practical and ethical decision-making abilities in real-world scenarios. 25-30% of the overall weightage depends on this section. Many students find this section ambiguous and complex, making it a very important section to boost overall performance and make candidates stand out.

Structure of the Decision-Making Section

This section will have 21-22 questions. All the questions will be MCQ types, and no calculations will be needed. Each question will have 5 options, and candidates need to select the most appropriate option.

The common types of questions will be:

• Ethical Dilemmas

• Business decisions

• Human resource and interpersonal scenarios

• Stakeholder management

Negative marking applies to this section.

Common Themes in Decision-Making Questions of XAT 2026

Candidates can expect Decision-Making questions in XAT 2026 to revolve around familiar themes seen in past exams. These often include ethical dilemmas, workplace conflicts, resource allocation, leadership challenges, social responsibility, and stakeholder management, testing judgment, fairness, and practical decision-making rather than theoretical knowledge. Read on to know more, along with the correct approach to solving those.

Also Read, XAT 2026 Quant Strategy to Maximise Score

XAT 2026 Decision-Making Sample Questions

These are some of the XAT 2026 Decision Making practice questions that will help students understand the question types.

Types of Sample Questions You Might Encounter

Q1. Directions: Study the following information carefully and answer the related question.

The Indian government may hold top executives responsible if state-run power companies fail to meet performance targets and punish them with fines and transfers. The strict performance parameters are aimed at ensuring that at least the reduced target for 62,000 MW of generation capacity addition is achieved before the end of the 11th Plan, said a power ministry official. Performance of the chairman and managing directors of the power Public Sector Units (PSUs) in project implementation will be assessed as per the terms and conditions stipulated in the company’s memorandum of understanding (MoU) with the power ministry, he said, requesting anonymity. Performance parameters of executives had come under strict scrutiny due to a lack of progress in the capacity addition program. While the target for the 11th five-year plan has already been scaled down by the government from 78,500 MW, the first three years of the plan yielded only 22,302 MW of fresh capacity.

Question: If you were the chairman of one of these power PSUs, which of the following statements (all of which are assumed to be true) could best be used to strengthen your case against the government holding top executives responsible?

i. The labour unions, owing allegiance to the ruling party at the Centre, are not allowing work to progress with their demands for wage hikes that are untenable.

ii. The actions of the mid-level management are not in line with the objectives laid down by the top management.

iii. The delays have been due to difficulties in obtaining funds at reasonable interest rates on account of the recessionary conditions.

iv. We are not to blame. The government is not doing enough to ensure the availability of sufficient fuel to power the existing plants, let alone the new plants.

v. The government had ignored the infrastructure availability like roads etc., and environmental clearances required for such projects and therefore set an unrealistic target to begin with, and the revised target is also unrealistic as well and the revised target is also unrealistic as well.Ii and ii

1. I and III

2. i, iii, and iv

3. ii, iv, and v

4. i, ii, iii, iv and v

Solution:
The statements in option C collectively make a case that the delays and challenges in achieving the power generation targets are influenced by external factors and government actions, and thus, top executives should not be held solely responsible. Here's an explanation for each of the selected statements:
i. The mention of labour unions allied with the ruling party obstructing progress due to unrealistic wage hike demands indicates that external political factors are affecting the execution of projects. This highlights that the top executives are facing hurdles beyond their control.
iii. The statement about difficulties in obtaining funds at reasonable interest rates due to recessionary conditions emphasizes that economic circumstances play a significant role in project delays. This suggests that external economic factors have an impact.
iv. Pointing out that the government is not ensuring the availability of sufficient fuel for existing and new plants highlights that government policies and actions are contributing to the challenges. This statement indicates that top executives can't be held solely responsible for issues beyond their control.
Collectively, these statements make a compelling case that external factors, including political, economic, and government-related issues, have played a significant role in the delays and challenges in meeting power generation targets. This argument supports the idea that top executives should not be held solely responsible for these issues.

Hence, the third option is correct.

Q2. Directions: Read the following information and choose the best alternative:

The one industry that has seen the worst possible impact of rising oil costs is the airline industry. In the last few years, the cost of aviation fuel has increased by more than 40%, and considering that aviation fuel makes up for 40% of the total operating costs of an airline, the impact of this increase has been immense. During the same period, the airline companies have increased ticket prices by 10% but this has met with a bad response from flyers. The occupancy drop for airlines has been around 15% and those using airlines prefer to use other cheaper modes of transportation.

Wet Airways is one company stuck in the middle of this issue. Wet Airways has always provided exceptional service to its clients. In terms of comforts, anyone who has flown with Wet can vouch for the fact that their cabin crew is the best, and the bouquet of services they provide is immense. In the general market scenario, whereas general carriers have an occupancy rate of about 70%, Wet always had its flights fully occupied. But such service comes at some cost. Wet Airways, with its extremely customer-friendly model, has constantly bled money and can no longer sustain the same levels of service, keeping in mind the enhanced cost of aviation fuel. Keeping the current market scenario in mind, Wet has decided to slowly and steadily reduce the number of services it offers to its passengers, and thereby reduce its operational costs. By using these measures, Wet plans to reduce its costs by 20%.

Question: Which, out of the following measures, can be used by Wet Airways in the current market scenario to make sure that it retains its flyers when it changes the services it offers?

1. Giving the return ticket from a destination is free.

2. Better facilities in airport lounges.

3. Hire models and pretty faces to attract more men.

4. An enhanced frequent flyer program rewards its regular customers.

5. Personal greeting cards ask their clients to continue to use their services.

Solution:

Correct Answer:- D

Explanation:- You need to pick a choice that helps the company generate greater air traffic, yet is not a burden on the company, as the existing scenario is pretty bleak. In such a case, the best approach is illustrated by option D, as it offers rewards to those who use the service frequently (thereby rewarding loyalty), and yet does not place substantial costs on the company. Also, in case the flyer frequently uses the service, then only he becomes eligible for these benefits, thus implying a sure-shot increase in revenue for the company.

Q3. Directions: Read the following information and choose the best alternative:

In the last five years, the face of the mobile phone industry has transformed. From an industry that was finding its feet in the global set-up, it has gone on to grow into a mainstay of the global financial world. In the world of mobile phones, Nokia was the leading phone manufacturer, generating the highest revenues for more than a decade, and in the last two years, it has lost that position to Samsung. Bokia, which entered the field of mobile phones in 2002, grew handsomely during a decade in which its sales touched figures of 10 million handsets annually in the year 2010. To go with these sales, it had an operating margin of 20% and generated revenue of 4.1 billion dollars. A lot of people, including major financial institutions, saw Bokia as an amazing investment opportunity and decided to invest in the company. The shares of Bokia soared in all these years, and the company generated a lot of positive attention.

But somewhere along the line, this fairy tale has not quite gone down the expected road. Though Bokia has managed to increase its sales to 13 million handsets in the last two years, and its revenues have gone up to 4.6 billion dollars, its operating margins have reduced to 4%, and in terms of profitability, it has been beaten hands-down by Samsung. To add to that, Samsung seems to be dominating the high-profit market of touch phones, and Nokia still seems to be selling mobile phones of the previous generation. The stock markets have not taken kindly to these events, and the Bokia stock price has tumbled by more than 20% in the last two years, and the shareholders are not happy with the current scenario.

You represent Holdman Machs, the main investor for Bokia, and hold a 16% stake in the company. You have called a shareholder meeting where you have asked the current CEO to explain his position.

The following is a list of measures that the CEO has proposed at the shareholder meeting.

I. Introduce a new touchscreen mobile phone range, much better than the ones being sold by Samsung.
II. Reducing the prices of our mobiles further to increase sales.
III. Increasing the prices of our existing mobiles to increase profits.
IV. Reducing employee salaries to improve operating margin.
V. Identifying a strategic investor to help us create new products and fund the battle with Samsung.

Which, out of the above measures, would reap benefits at the earliest?

1. I and IV

2. II and IV

3. III and IV

4. II and V

5. I and V

Solution:
Correct Answer:- E
Explanation:- In the given question, we need to pick two measures that would reap benefits for Bokia. Well, the two measures should be the ones that have the potential to have an impact on the market and create a positive sentiment about the Bokia product. The only two options that talk about introducing a better product are highlighted by I and V.

Real-Life Scenarios in XAT DM Questions

Some of the examples of real-life scenarios in XAT DM Sample Questions are:

• A senior manager discovers that an employee in a critical role has been fudging performance reports to meet quarterly targets. While the employee’s work is otherwise exceptional, this action has implications for team morale and company ethics.

• A company has to decide between launching two products. Product A has high-profit potential but a narrower target market, while Product B has lower profit margins but broad appeal. Resources allow only one product to be launched within the fiscal year.

• Two high-performing team members have a disagreement over their approach to a project, which is affecting team productivity. Both employees are crucial to the project’s success, and each has legitimate concerns.

• A manufacturing company faces a choice between using high-quality raw materials, which will increase product costs or a more affordable option that compromises slightly on quality. Customer loyalty is important, but profit margins are tight.

• A consumer product has been found to have minor defects after it’s already hit the market. While the defect is not safety-related, the company faces negative press and customer complaints.

• An NGO has limited funds to allocate between two projects: one provides clean drinking water to remote villages, and the other offers scholarships for underprivileged students. Both projects have strong social benefits, but limited resources force a choice.

• A retail company is considering expanding into a new region where it has little market presence. Initial research shows potential, but with considerable risk due to a lack of brand recognition and high initial costs.

XAT Decision-Making Practice: Best Resources

There are very few study materials available for the XAT decision-making section. These are some of the best resources for the decision-making section.

Recommended Books for XAT DM Preparation

These are the top books for XAT DM preparation.

1. "Jabbing The XAT (with solved papers)" by R.K. Jha

2. "XAT Decision Making & Analytical Reasoning" by Anil S. Kumar

3. "Target XAT" by Disha Experts

Online Resources for XAT DM Preparation 2026

XAT 2026 sample papers and e-books are essential resources for aspirants aiming to score well in the exam. These materials help candidates understand the latest exam pattern, question types, and difficulty level, especially for the Decision Making section. Regular practice with sample papers improves time management, accuracy, and confidence.

Read Here, XAT Verbal Ability Strategy to Ace Preparation

XAT Decision-Making Strategy 2026 for Maximum Score

The Decision-Making section in XAT tests how well candidates can analyze real-life situations and choose balanced, ethical XAT Decision-Making Questions with Solutions
. Scoring well does not depend on prior business knowledge but on clarity of thought, fairness, and logical judgment. With the right approach and consistent practice, candidates can significantly improve accuracy and confidence in this unique section.

Understand the Situation Before Judging

Carefully read the entire case to grasp the core problem, background, and stakeholders involved. Avoid jumping to conclusions based on assumptions. A clear understanding helps in choosing options that address the root issue instead of surface-level symptoms.

Identify Stakeholders and Their Interests

Most Decision-Making sets involve multiple stakeholders such as employees, management, customers, or society. Identifying who is affected and how allows you to select responses that are fair, practical, and socially responsible.

Choose Ethical and Balanced Options

XAT rarely rewards extreme decisions. The best answers usually balance ethics, practicality, and long-term impact. Avoid options that favour personal gain, ignore rules, or harm one group excessively.

Eliminate Clearly Flawed Options

Before selecting the best answer, remove options that are illegal, biased, unrealistic, or emotionally driven. This narrowing-down process improves accuracy and saves valuable exam time.

Base Decisions on Facts, Not Emotions

XAT Decision-Making questions are designed to test rational thinking. Base your choice strictly on the information provided in the case. Emotional reactions or personal opinions often lead to incorrect answers.

Practice Previous Year Questions Regularly

Solving past XAT Decision-Making questions helps you understand common themes and expected reasoning patterns. Regular practice builds familiarity and trains you to approach each case calmly during the exam.

Common Mistakes to Avoid in the XAT DM Preparation 2026

Candidates can avoid common mistakes in the XAT Decision-Making section by being mindful of recurring problem areas. These include making emotional choices, ignoring key facts, selecting extreme or unethical options, and overlooking stakeholder interests, all of which can reduce accuracy and scores.

Misinterpretation: Students often do not read the statements carefully and misinterpret the whole situation. Time management is key in this section, but take your time with the questions.

Choosing extreme solutions: Sometimes, students pick the extreme solution as the right answer. But they are the wrong choices.

Not checking all the options: Students often do not check the other options if they find one option relatively better. But in these types of exams, most of the options are almost the same and tricky. Read all the options first before choosing the answer.

Emotional or biased: In ethical dilemmas, students often pick a solution that is driven by emotion or sympathy. Stay objective and pick a solution that is logically backed by the facts.

Selecting impractical solutions: Students often select a solution that is impractical to implement. Select a solution that can be applied in real life.

Relying on their facts, Students often speculate on other facts that could happen beyond the situation. Pick a solution based on the given facts.

Download Here, XAT Previous Year Papers

Expert Tips to Solve XAT 2026 Decision-Making Question

These are some of the most effective tips that will be useful for the XAT 2026 Decision-Making section. From understanding ethical dilemmas to choosing the most balanced solutions, these expert-backed strategies will help you approach this unique section with confidence. Use these XAT Decision-Making tips to enhance your judgment, speed, and accuracy in the upcoming exam.

Understand the common topics: Analyze the previous year's papers and identify the common DM themes like ethical dilemmas, business decisions, crisis management, and interpersonal conflicts.

Develop a framework: Analyze each question using a consistent framework, such as S-E-C (Stakeholders, Ethics, Consequences), which helps you stay organized and avoid impulsive choices.

Real-life case studies: Make a habit of reading business case studies from journals, newspapers, publications, and websites. Understand the context for decision-making scenarios and improve your decision-making skills.

Accuracy over Quantity: Practice solving decision-making questions more accurately, rather than attempting a lot of them.

Mock tests: Take topic-wise and full-length mock tests to test your learning. Consistent performance on mock tests will also boost your confidence.

Improving your weaker areas: Review mock test results, and identify the weaker areas in which you need to pay more attention. Strengthen those areas before attempting another mock test.

Group studies: Join online communities or forums to discuss these sections with fellow peers. New perspectives will surface, and you will learn alternative approaches.

How to Utilize Study Material for XAT Decision-Making Preparation

Using the right study material effectively is crucial for scoring well in the XAT Decision-Making section. Instead of collecting too many resources, candidates should focus on understanding how to apply logic, ethics, and practicality to real-life scenarios. A structured approach to using study material helps build clarity, consistency, and confidence.

Start with Concept-Based DM Material

Begin with study material that explains the fundamentals of decision-making, such as stakeholder analysis, ethical reasoning, and conflict resolution. This helps you understand how decisions should be approached before solving questions.

Prioritize Previous Year XAT DM Questions

Past XAT papers are the most reliable study resource. Analyze not only correct answers but also why other options are rejected. This builds an understanding of XAT’s preferred thinking pattern.

Use Caselets, Not Just Theory

Decision-making is application-based. Focus more on caselets and situational questions rather than reading long theories. Practice interpreting problems and choosing balanced responses.

Maintain an Error Log

After practice, note down mistakes and the reason behind them. Revisiting this error log regularly helps avoid repeating the same judgment errors in the exam.

Practice with Timed Sets

Once comfortable, practise DM questions under time constraints. This improves decision speed and helps you stay calm while analysing cases during the actual exam.

Revise Regularly, Keep Resources Limited

Revise solved cases and key learnings instead of adding new material repeatedly. Limited but well-used study material leads to better retention and sharper decision-making skills.

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Case Studies of Effective Decision-Making

These are some of the common case studies in the XAT DM section and the approaches the toppers would have taken.

Case 1: Ethical Dilemma in Resource Allocation

A company with a limited budget must choose between investing in quality control improvements or launching a new marketing campaign.

Toppers always suggest that the main focus should be on maintaining product quality, as it aligns with long-term customer trust and brand reliability.

Case 2: Crisis Management and Brand Image

A company’s product recall is going viral on social media, damaging its reputation. The question involves deciding how to handle the crisis while balancing transparency with damage control.

In this situation, toppers always advise not to provide any immediate fix but rather provide a structured response,e like, first issuing a public apology, followed by clear information on corrective measures and committing to quality improvements.

Case 3: Conflict Resolution Between Employees

Two team members disagree on project direction, each advocating different approaches. Both approaches have potential benefits, but the dispute is affecting team morale.

Toppers always suggest that, rather than choosing one’s approach outright, a discussion on both perspectives is always essential. After that, choose a hybrid solution that will foster collaboration and mutual respect as well as maintain team harmony.

Case 4: Balancing Profit with Social Responsibility

A company can choose between a profitable partnership with a high-pollution factory or seeking an environmentally responsible, albeit less profitable, partner.

In this situation, toppers always welcome the environmentally responsible partner, recognizing the importance of sustainability. They highlighted the fact that in today's market, long-term social responsibilities are very important to win customers’ loyalty and also for long-term profits.

Smart Approach to Choose XAT Decision-Making Sample Questions

A smart approach to choosing XAT Decision Making sample questions helps candidates build clarity, logic, and exam temperament. Instead of solving random sets, aspirants should focus on samples that reflect real XAT scenarios, ethical dilemmas, and business-oriented judgments. The right practice material improves analytical thinking, reduces confusion, and prepares candidates to handle complex situations calmly during the actual exam.

Focus on Official and Past-Year Style Questions

Start by prioritizing sample questions that closely resemble actual XAT Decision Making sets. These questions usually involve realistic situations related to management, ethics, or social responsibility. Practising such questions helps you understand the tone, depth, and neutrality required in answers, rather than relying on vague or overly simplified practice sets.

Choose Questions That Test Ethics and Practical Judgement

Decision-making in XAT is not about textbook logic but about balanced judgment. Pick sample questions that force you to weigh ethical implications, organizational impact, and fairness. Questions that include multiple stakeholders help develop the habit of choosing XAT Decision-Making Questions with Solutions that are practical, unbiased, and sustainable in real-world contexts.

Prefer Case-Based Sets Over Standalone Questions

Case-based decision-making sets are more effective than isolated questions. They train you to retain information, connect details across questions, and evaluate options holistically. Selecting such samples improves concentration and mirrors the actual exam structure, where one situation can influence multiple decisions.

Analyze Explanations, Not Just Final Answers

While choosing sample questions, ensure they come with detailed explanations. The learning lies in understanding why an option is correct and others are not. Analyzing explanations sharpens reasoning skills and helps avoid emotional or extreme choices, which are often traps in XAT Decision Making.

Gradually Increase Difficulty and Ambiguity

Begin with moderate-level sample questions and slowly move to more ambiguous ones. XAT often includes options that appear equally correct at first glance. Practising higher-difficulty samples improves tolerance for uncertainty and trains you to make calm, balanced decisions under pressure.