Under pressure from media and suppliers, Ava constituted a c

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Answer questions 36-38 on the basis of information given in the following situation.

Ava is the CEO of Ratan Brothers, a bicycle manufacturing company. The organization is doing well financially, with a steadily increasing share price. Recently, Ava promoted Bhushan, her nephew, to the position of head of procurement after he completed five years in the organization. After the promotion, he was automatically inducted into the quality council headed by Ava.

Dev and Sons is a supplier to Ratan Brothers. It supplies “ball bearings”, an important part of any bicycle. After Bhushan took over, he switched to a new supplier citing quality deficiencies in Dev and Sons’ product. Dev and Sons responded by publicly declaring that quality was not compromised. Further, it alleged that its competitor bribed Bhushan to get the contract.

Under pressure from media and suppliers, Ava constituted a cross-functional committee of senior executives to investigate Dev and Sons' allegation against Bhushan. The committee exonerated Bhushan. However, rumors within the organization began to spread that the decision was influenced by nepotism.

Which of the following should be the best response from Ava?

[MBA XAT 2018]

A Do nothing, as the committee has exonerated Bhushan.

B Force Bhushan to resign temporarily. Make an independent enquiry, if found innocent, reinstate Bhushan

C Communicate to all shareholders that these kinds of practices are very common in organizations

D Sack all those employees who questioned the authority of Ava

E Explain in a town hall meeting, open to all the employees, how the decision to exonerate Bhushan was taken.