, PLEASE USE THIS DOCUMENT AS A GUIDE ONLY
Question 1
1.1. By globalising, organisations considerably change their physical environment, the task
environment and the social environment. Explain the social environment of a globalising
organisation.
By going abroad, a firm significantly changes the societal environment in which it operates. This
may result in a number of challenges, ranging from becoming familiar with a foreign culture to
determining how to get the raw materials needed (Page 8).
1.2. Describe the difference between prevention, appraisal and failure (PAF) costs.
Prevention costs are those costs associated with preventing defects and imperfections from
occurring (Page 10).
Appraisal costs are associated with the direct costs of measuring quality (Page 10).
Failure costs are roughly categorised into internal failure costs (associated with online failure)
and external failure costs (product failure after the production process) (Page 10).
1.3. Leadership is the process by which a leader influences a group to move towards the
attainment of superordinate goals. For followers to have power, leadership must share its power.
Briefly explain the various forms of this power.
Power of expertise: When a leader has special knowledge (or is perceived to have special
knowledge) (Page 9).
Reward power: When a leader has rewards that can be bestowed on subordinates in return for
some desirable position (Page 9).
Coercive power: When the leader has power to punish the follower for not following rules or
guidelines (Page 9).
Referent power: When a leader is charismatic or charming and is followed because he or she is
liked (Page 9).
Legitimate power: Power that comes with the position (Page 9).
1.4. A guarantee takes into account customer rights and promotes the confidence about the
purchase of the product. Discuss the conditions that a guarantee should adhere to.
A guarantee should be:
Unconditional
Meaningful
Understandable
Communicable
Painless to invoke (Page 12).
Question 1
1.1. By globalising, organisations considerably change their physical environment, the task
environment and the social environment. Explain the social environment of a globalising
organisation.
By going abroad, a firm significantly changes the societal environment in which it operates. This
may result in a number of challenges, ranging from becoming familiar with a foreign culture to
determining how to get the raw materials needed (Page 8).
1.2. Describe the difference between prevention, appraisal and failure (PAF) costs.
Prevention costs are those costs associated with preventing defects and imperfections from
occurring (Page 10).
Appraisal costs are associated with the direct costs of measuring quality (Page 10).
Failure costs are roughly categorised into internal failure costs (associated with online failure)
and external failure costs (product failure after the production process) (Page 10).
1.3. Leadership is the process by which a leader influences a group to move towards the
attainment of superordinate goals. For followers to have power, leadership must share its power.
Briefly explain the various forms of this power.
Power of expertise: When a leader has special knowledge (or is perceived to have special
knowledge) (Page 9).
Reward power: When a leader has rewards that can be bestowed on subordinates in return for
some desirable position (Page 9).
Coercive power: When the leader has power to punish the follower for not following rules or
guidelines (Page 9).
Referent power: When a leader is charismatic or charming and is followed because he or she is
liked (Page 9).
Legitimate power: Power that comes with the position (Page 9).
1.4. A guarantee takes into account customer rights and promotes the confidence about the
purchase of the product. Discuss the conditions that a guarantee should adhere to.
A guarantee should be:
Unconditional
Meaningful
Understandable
Communicable
Painless to invoke (Page 12).
