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Hi sir! I am kind of confused here about the external failure and the internal failure. And this is my points of these two:
internal failure: the reason of this failure is caused by business it self and company need to deal with it.
external failure: the reason of this failure is not DIRECTLY from company itself (i.e, in this question, the cost incurred to clean contaminated soil is because of the unclean soil which is from the external environment, so it is an external failure! EVEN THOUGH the reason that the soil got contaminated is the company ITSELF (using the pesticide))
Are these points right? Please let me know!
And could you explain the external failure and the internal failure in a more formal way for me please? Those are only my understanding above and I haven’t get the defination of them completely. Thank you so much!!
External failures are ones that affect the outside world – such as delivering faulty goods to customers or here causing pollution.
Internal failures are ones that do not affect the outside world, but still have a cost for the company, such as having to rework products because they were produced wrongly or having to spend money recycling because they have too much waste.
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