MNP3703/201/2/2020

Tutorial letter 201/2/2020

Supplier Relationship Management

MNP3703

Guidelines for answering assignments

and the examination format

Semester 2

Department of Applied Management

IMPORTANT INFORMATION:
This tutorial letter contains important information about your module.

Note: This is an online module, and therefore your module is available on myUnisa. However, in
order to support you in your learning process, you will also receive some study materials in
printed format.
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CONTENTS

Table of Contents

1 INTRODUCTION ............................................................................................................................... 3
2 GUIDELINES FOR ANSWERING ASSIGNMENT 01 ...................................................................... 3
3 GUIDELINES FOR ANSWERING ASSIGNMENT 02 ...................................................................... 8
4 GUIDELINES FOR ANSWERING EXAMINATION QUESTIONS ................................................. 12
4.1 Structure and headings ................................................................................................................... 12
4.2 Relevance ........................................................................................................................................ 12
4.3 Answer the entire question .............................................................................................................. 12
4.4 Time management ........................................................................................................................... 12
5 FORMAT OF THE EXAMINATION PAPER (ALTERNATIVE ASSESSMENT) ........................... 13
6 CONCLUDING REMARKS ............................................................................................................. 13

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1 INTRODUCTION
Dear Student

This tutorial letter contains the answers to Assignment 01 and Assignment 02 and the format of
the examination paper. It also includes advise on how to answer a question on a case study.

2 GUIDELINES FOR ANSWERING ASSIGNMENT 01

With a case study it is very important to remember to apply the theory in the study guide to the
facts given in the case study to answer the question in full. Therefore, merely stating a point
discussed in the literature of the study guide will not be marked as a correct answer. That
said, if there is theory stated in your study guide that may relate to the question, but there is no
information in the case study to support your answer, you may make your own relevant
assumptions to apply the theory to the case study.

Here are the answers to Assignment 01.

Please note:
Where quotes have been provided in an answer, it is merely to show which information from the
case study the answer was based on. You may also quote information from the case study, but it
is important to also explain your answer in your own words.

Question 1

When you consider the supplier perception model, what type of relationship does Principle Game
currently have with Lula Lapeng Lodge? (1)

ANSWER:

Principle Game currently has and views it to be a core relationship with Lula Lapeng Lodge.
(Study unit 1, section 1.2.2)

Question 2

When you consider the supplier perception model, what type of relationship is Principle Game
moving towards with Lula Lapeng Lodge? (5)

In your answer you should address the following:

• Indicate the relationship type. (1)
• Briefly discuss the two axes of the model. (2)
• Provide proof from the case study to support each axis to substantiate your answer. (2)

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ANSWER:

Principle Game is moving towards an exploit relationship with Lula Lapeng Lodge

The axis of the model

The supplier perception model identifies how suppliers see a buying organisation by focussing on
two aspects:
(1) the value of the business offered by the buying organisation in terms of the supplier turnover
levels, and
(2) the level of attractiveness that the buying organisation’s business has for the supplier.

Proof from the case study

The value of the business from Lula Lapeng Lodge remains high – "Lula Lapeng Lodge and
Principle Game value their business with each other"
The level of attractiveness that Lula Lapeng Lodge's business has for Principle Game has lowered
– "It has now gone as far as focussing more attention on developing its relationship with other
suppliers in the area."
(Study unit 1, section 1.2.2)

Question 3

Discuss Ms Sims' management style with reference to an aggressive, passive or assertive

management style. (15)

In your answer you should address the following:

• Identify the management style. (1)
• Discuss seven characteristics of that type of management style. (7)
• Provide information from the case study to substantiate each of the characteristics. (7)

ANSWER:

Ms Sims is a procrastinator and passive manager. (1)

Abdicates from taking decisions:

• Under pressure to keep Mr Davidson and the staff satisfied, she offers that a supplier
relationship management team may be created. She did not proactively decide to form the
team, but felt pressurised to do so.
• The ultimate decision would thus be made by the team, which would abdicate Ms Sims from
responsibility.

Avoids conflict:
• In order for her to maintain please the staff and Mr Davidson, she offered to formulate a
supplier relationship team that will ensure that good relations are formed and maintained.
• “She feels uneasy about staff’s discontent and avoids any conflict.”
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However, she believes that she is democratic:

• After receiving very detailed instructions from Mr Davidson, she engages an unhappy and
fearful workforce about the proposed changes and helps them in constructing an operational
plan for execution.
• She enquires about the staff’s perceptions and fears as she tries to make sure that everyone
is happy.
• Ms Sims first enquires from all staff what they think and then only takes action to form a
team.

Inability to solve problems

• Ms Sims only suggested the route of establishing a supplier relationship team.
• She chose the easier route of establishing a team that will address decision-making instead
of her.

She makes offers and yields to pressure:

• She accepted Mr Davidson’s vision that was imposed on her without raising any concerns
despite the staff members' displeasure.
• Mr Davidson put pressure on her in order to get the services operational.
• In response to pressure from her boss, she approaches the staff offers that a team is formed.
• She would rather make offers with the view to calm the situation instead of addressing
conflict.

‘what do you all want to do, whenever’

• She asked staff what they think and about what they fear. She listened to the staff and
because of their reactions, she agreed to form a team.

Uses group viewpoints

• “Under pressure to keep Mr Davidson and the staff satisfied “and “fears and agrees to form
a team to implement changes”.

Another characteristic that may be considered if it is applied to the case study:

• changes positions easily and avoids any contest

(Study unit 2, section 2.2, activity 2.2)

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Question 4

Make recommendations to Mr Davison and Ms Sims on necessary changes or improvements to

ensure an effectively managed organisational culture. (5)

ANSWER:

As with any other aspect within an organisation, it is of the utmost importance to effectively
manage the organisational culture. This quick test will show the management tasks that may be
needed to improve work, for example: (Students may provide a relevant example for each of the
following suggested improvement.)
• Communicating regularly; for example, what do people think about their work and what do
they want to do?
o Ms Sims have been communicating with staff about their jobs and they admitted their
discontent to her about the changes and the fears they had that they might have to work
longer hours or that their responsibilities would increase. Mr Davisdon should also speak to
employees about their jobs.

• Creating a shared vision; for example, so that everyone knows where they are going.
o Have weekly meetings on a Friday to discuss the weeks challenges and plan for the
following week so all employees are on the same page and know what to expect.

• Improving the physical environment;

o Ensure optimal lighting and air ventilation in workspaces.

• Using ideas from the team to make improvements to the work.

o Employees suggested that a supplier relationship team should be created.

• Using people playing to their strengths.

o For example, considering a cleaner’s skills of creating order and her aspirations of more
responsibility and then allocating filing work to her.
(Study unit 2, section 2.4.3)

Question 5

What is the most probable behaviour staff will show in the current stage of its team-building
process? (4)

ANSWER:

Stage I: Forming the team (1)

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Probable behaviour: (any 3) (Students should provide a specific example relevant to the
following).
1. Excitement, anticipation and optimism
• Be excited about the new team and working with other employees on a different basis.

2. Pride in being selected for the project

o Not all employees will be on the team, so employees may feel proud to have been selected
for the new team.

3. Initial, tentative attachment to the team.

o Employees may feel that the team is now their safe space and that the team all have the
same priorities. The team members may therefore feel that they “belong” with the employees
of the team.

4. Suspicion, fear and or anxiety about the job ahead.

o Since it is a new team and a first for Lula Lapeng Lodge, the team may feel unsure and
anxious about what their job will entail in the team. They do not have previous experiences
or other teams’ examples to compare their work and decisions to.
(Study unit 2, section 2.3.3)

Total marks: 30

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3 GUIDELINES FOR ANSWERING ASSIGNMENT 02

Assignment 2 was formulated as multiple-choice questions. On a third-year level, though, it remains

important to show that you understand the subject, that you can evaluate all sides of a problem and
that you can motivate your decisions with confidence to a larger audience.

As communicated in Tutorial Letter 102, you were expected to answer the multiple-choice questions
in the following way:

a) Write down (or type) the question number.

b) Choose and write down the correct option (Option 1, 2, 3 or 4).

c) Motivate why you believe the option is correct first.

d) Then explain why the other options are incorrect.

Please note:
In the assignment you received half a mark when you identified the answer correctly, but you did
not explain the reason for it being the correct answer well. If you identified the reason correctly
and explained the reason well, you received a full mark.

The answers to Assignment 2 follows:

Question 1 (4)

Which of the following will be acceptable to consider in finalising a strategy towards corrective
measure in a supplier's performance?

[1] Advertise a request for proposal to all other suppliers in the market to get the attention of
the non-performing supplier.
[2] Threaten the supplier to involve the buying organisation’s legal team for legal action against
the supplier's lack of performance.
[3] Write a letter notifying the supplier of the buying organisation’s intentions to terminate their
contract, but then rather reduce the warning to negotiations.
[4] Use the "You will comply with the strategy that requires your performance – or else!"
approach to alert the supplier.

Answer: Option 1.
Option 1 is correct, because the buying organisation should be willing to bluff to get the attention
of the supplier. Any action that will send a clear message to their supplier is worth the risk.
Option 2 is incorrect, because empty threats are the surest way to lose any leverage that the
buying organisation might have had over the supplier. They should not merely threaten the
supplier with legal action, if they are not willing to see it through.

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Option 3 is incorrect, because the buying organisation’s actions/reactions set out in the strategy
should escalate. Every step taken should intensify the influence exerted over the supplier to
coerce them to improve their supplier performance, therefore not be reduced.
Option 4 is incorrect, because this approach can lead to disagreements and conflict with the
supplier, resulting in economic sabotage.
(Study unit 7, section 7.7.4)

Question 2 (3)

Extra Elbows has expanded their business internationally and has, therefore, become
increasingly aware of the environment and the impact it has on nature and the future of Earth.
Which type of supplier certificate will be most important to Extra Elbows in their decision to award
a contract?

[1] balanced scorecard

[2] internal certification
[3] ISO9000
[4] ISO14000

Answer: Option 4.
Option 4 is correct, because ISO14000 is an international environmental management system
based on standards that include reduced energy and other resource consumption, decreased
environmental liability and risk, reduced waste and pollution, and improved community goodwill.
Options 1 and 2 are also supplier evaluation systems, but only certify the suppliers within the
buying organisation.
Option 3 only verifies that the supplier has an established quality management system in place.
(Study unit 7, section 7.3.4)

Question 3 (4)

According to Lysons and Farrington (2006), which of the following options will be an example of
effective negotiation?

[1] After months of negotiating back and forth, our team has finally received the discounted
prices we set out to get.
[2] Our chief executive officer and their marketing director have formed an agreeable
relationship.
[3] We have removed the differences that existed in order to void the necessity of negotiations.
[4] We have started to formulate a plan and the processes that will be necessary to execute our
goals.

Answer: Option 2,
Option 2 is correct, because effective negotiations will preserve or enhance harmonious working
relationships and fosters, rather than inhibits, good interpersonal relationships.
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Option 1 is incorrect, because efficient negotiations do not use more time or money than
necessary.
Option 3 is incorrect, because, while that type of problem-solving is an alternative to negotiation,
it cannot be regarded as effective negotiation, since no negotiation too place.
Option 4 is incorrect, because negotiations first need to be concluded before a plan or process
can be formulated.
(Study unit 8, section 8.4)

Question 4 (4)

Which of the following is true for a strategic alliance?

[1] Contracts are based more on penalties.

[2] Problems are dealt with by negotiation.
[3] Collaboration is always purely based on trust.
[4] There is a focus on prices, rather than on costs.

Answer: Option 2,
Option 2 is correct, because problems that may arise will be dealt with by negotiation rather than
reference to the contract.
Option 1 is incorrect, because contracts for partnerships are based more on incentives than on
penalties.
Option 3 is incorrect, because partnerships or strategic alliances are not always only based on
trust – most of the time the parties in a partnership or strategic alliance will draw up a contract or
have some form of legal agreement.
Option 4 is incorrect, because there is a focus on costs - to determine and understand both the
buying organisation’s and the supplier’s costs, with a mutual agreement to eliminate or reduce.
(Study unit 4, section 4.2.5)

Question 5 (4)

It is extremely important for organisations to communicate any changes and that they are also
informed of any changes. Which option correctly shows what should be involved in the
communication regarding change?

[1] Always use written communication.

[2] Share information at selected stages.
[3] Think of a reply while a question is asked.
[4] Admit any mistakes and learn from them.

Answer: Option 4,
Option 4 is correct, because when a mistake is openly admitted and communicated, recuperation
from the situation may be possible.
Option 1 is incorrect, because written communications should only be used where appropriate;
concentrate mainly, on face-to-face methods.
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Option 2 is incorrect, because information should be shared at all stages.

Option 3 is incorrect, because answers should be listened to very carefully and attentively.
(Study unit 5, section 5.4)

Question 6 (2)

Building Bricks supplies building material to Happy Houses. The two organisations have a five
year contract between them for the continuous supply of these materials. Lately, Building Bricks
have responded slower to the orders. It now also announces that it will be increasing its prices of
the building material that it delivers to Happy Houses. What type supplier contract management
risk does Happy Houses encounter?

[1] Supplier volume uncertainty

[2] Supplier opportunism
[3] Selecting the wrong supplier
[4] Supplier abandons other business

Answer: Option 2,
Option 2 is correct, because this is a typical example of a supplier becoming complacent and
losing motivation to maintain or even improve performance as the contract progresses.
Options 1, 3 and 4 are also risks that an organisation may encounter in managing a supplier
contract, but it is not relevant for the case.
(Study unit 6, section 6.8)

Question 7 (4)

After the Pareto analysis has been conducted, a buying organisation's products and services can
be classified as Class A, B or C products or services. What will determine in which one of these
categories a product or service is classified?

[1] A diagnostic of the total spend of the bottleneck, routine, leverage and critical products or
services purchased.
[2] An analysis of the performance of the suppliers of the buying organisation, who are not
performing, in order to obtain adequate performance levels of all strategic suppliers.
[3] An investigation into aspects of price, demand for different inventory items, delivery times
and the particular problems relating to the purchasing of different items and services.
[4] A comparison between the rand value spent in relation to the percentage of products or
services bought, and the total amount of products and services purchased.

Answer: Option 4,
Option 4 is correct, because the Pareto analysis divides products and services into categories
based on the investment made in monetary value in relation to the percentage of items or services
compared to the total amount of products and services purchased.
Option 1 is incorrect, because it describes the manner in which the supply positioning model will
categorise products or services into those four categories.
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Option 2 is incorrect, because it is irrelevant. The performance of the supplier is not considered
in the Pareto analysis.
Option 3 is incorrect, because a Pareto analysis can only be done after such a thorough
investigation has been launched.
(Study unit 10, section 10.1.3)

Total marks: 25

4 GUIDELINES FOR ANSWERING EXAMINATION QUESTIONS

It is essential to follow a systematic approach and to use headings and paragraphs when
answering examination questions and essay-type assignments (such as the case study
Assignment, 01, in Tutorial Letter 101). For this reason, we provide some guidelines below on
how to answer this type of question.

4.1 Structure and headings

Use STRUCTURE AND HEADINGS when answering essay-type questions. Do not, under any
circumstances, write only ONE LONG PARAGRAPH. An essay that consists of one long
paragraph indicates that you do not know how to structure your answer. When you write long,
unstructured paragraphs you tend to start drifting away from the question that is being asked.

4.2 Relevance
Make sure your answer is relevant to the question being asked. Do not try to include irrelevant
information in your answer. You will not receive any marks for such information. Make sure you
identify exactly what is being asked and that you answer the question directly. Unfortunately,
some students provide a very thorough and detailed discussion on a question that was not asked!
These answers are then marked as incorrect.

4.3 Answer the entire question

Make sure you read the question and answer everything that is being asked. Some students
only answer part of the question and then expect full marks. If a student answers only 40% of the
question being asked, he or she cannot be given more than 40% of the marks for that question.
For example, a 25 mark-question requires an answer to be presented in five steps of equal length.
If you discuss only the first two steps, and write five pages about these two steps, you will not
receive more than ten marks for this question, simply because you only answered part of the
question.

4.4 Time management

Many students complain that they did not have enough time to complete the examination paper.
However, part of the examination process is to determine whether students can identify what is
being asked, and give concise, but complete answers. You have to be able to identify the

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important aspects of the question, which means that you should only provide information that is
strictly relevant.

5 FORMAT OF THE EXAMINATION PAPER (ALTERNATIVE

ASSESSMENT)

VERY IMPORTANT!! The FORMAT of the alternative assessment has CHANGED!

The format of the examination has changed to an online assessment. The duration of the online
alternative assessment will be three hours. The assessment will consist of four compulsory
sections with a variety of case studies and theory questions. The structure of the assessment is
as follows:

• Section A will be compulsory and will be based on a short case study with questions.

• Section B will be compulsory and will be based on another short case study with questions.

• Section C will be compulsory questions based on theory. This section will contain five
multiple-choice questions that you will have to answer in a similar manner as you did in
Assignment 2. You will have to identify the correct answer, explain why the answer is correct
and why each of the other options are incorrect.

• Section D will be compulsory and will be based on another short case study with questions.

The total marks for the paper will be 70 marks.

Please note:
It is very important to note the mark allocation for each of the questions to guide how much you
should write and how much time you spend on the question. It is also important to note that the
mark allocation for assignment 2 differed for each question, BUT in the exam each multiple-choice
question will count 5 marks:
• 1 mark for the correct identification,
• 1 mark for the explanation of the reason for it being the correct answer, and
• 1 mark for each explanation of the reason for it being the incorrect answer, adding up to 3
marks.

6 CONCLUDING REMARKS
I trust that the above guidelines will help you to evaluate your answers to Assignments 01 and 02
and that this tutorial letter has given you some idea of the type of questions to expect in the
examination.

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Good luck with your studies!

Mrs L Marcantuono
Module co-ordinator
DEPARTMENT OF APPLIED MANAGEMENT
Unisa

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