QUESTION: 45

Which of the following are examples of connected stakeholders in a private organisation? Select TWO that apply.

Customers
Local community
Media
Government
Shareholders

Answer(s): A,E

Explanation:

Connected stakeholders are those who, by contractual or commercial relationships, have a significant stake in organisation activity. As a general rule, connected stakeholder (with the exception of suppliers) have a low level of influence on procurement negotiations.

Examples of connected stakeholders are: suppliers, customers, bank where the organisation opens its account, shareholders.

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QUESTION: 46

Are tactical ploys only used in distributive approach?

No, because tactical ploys strengthen the other party's position
No, because tactical ploys will be more effective with integrative approach
Yes, because tactical ploys will help to gain insights into the other party's interests
Yes, because they will be irritants to long-term relationship

Answer(s): D

Explanation:

There are many tactics and ploys that can be used to persuade others, particularly those not trained in negotiation. But in general these tactics should be used with care, as they can backfire; and in situations where a long-term relationship is desired, they can be, if detected, become an irritant to TOP.
Tactics are particularly effective if and when you are dealing with untrained negotiators, in consumer's buying situation and in once-off encounter.

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QUESTION: 47

What is the most likely outcome when two organisations with adversarial relationship negotiate with each other?

Deadlocked
Lose lose
Win lose
Win win

Answer(s): C

Explanation:

An adversarial relationship in purchasing and supply arises when identical or equivalent good or services are available from competing suppliers and buyers/sellers are trying to gain an advantage over each other. Low levels of trust are characteristic of adversarial relationships. The outcome when two organisations with adversarial negotiate is most likely to be win-lose.

Reference:

Adversarial purchasing - Wikipedia
CIPS study guide page 32-35

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QUESTION: 48

IHL has been supplying to XYZ Ltd for months. XYZ Ltd procurement manager Diana realises that the IHL's input prices are dropping and this is a good time to re-negotiate the price of the contract. She invites IHL representative to XYZ headquarter to make a bargain on the current price. At the opening stage of the negotiation, Diana requests a 10% reduction in price with an increase in volume purchased.
Is Diana's action appropriate in the opening phase?

Yes, because the negotiation should be done as quick as possible
Yes, because Diana's proposal is a fair trade for both parties
No, because Diana should state exactly the increasing quantity
No, because Diana has put the markers down too soon

Answer(s): D

Explanation:

The opening stage of the negotiation covers the very first few minutes when the parties meet and greet each other and are seated in the negotiation room in preparation for the main event. Typical behaviours at the opening stage: 'dos' and 'don'ts' Do's
Be punctual and well presented (welcome their arrival) Break the ice with small talks
Start the conditioning process
Check authority
Check agenda
Consider using visual aid to set out key objectives or make key points Don'ts
Use strong, pushy, cold or tough style at the opening
Put down marker at this stage
Criticise other organisations/TOP's previous contacts/third parties. In this scenario, Diana has made her proposal right at the opening stage. This is an example of 'don'ts'. Good negotiators are very careful about 'red lines'. If she puts such barrier up too early, the supplier may not try to look for more creative solutions later in the negotiation.

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QUESTION: 45

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QUESTION: 46

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QUESTION: 47

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QUESTION: 48

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