QUESTION: 69

Professional buyer is planning for the next negotiation of a simple one-off contract. This negotiation is typified by which of the following? Select TWO that apply.

Continuous dialogue with supplier
Total cost of ownership is the most important criterion
Vendor ratings will be used
Arm's-length approach
Pricing is the most important criterion

Answer(s): D,E

Explanation:

Professional buyers, when planning or engaging in negotiation with suppliers, should always be aware of where the intended and actual relationship with this supplier is positioned on the 'spectrum' or 'continuum' of commercial relationships. The relationship spectrum describes the range of commercial relationships between a buyer and supplier based on richness of communication, longevity and mutual dependence.

In the question, the contract is simple one-off (or spot buy), which means the relationship will likely to be more transactional. In such relationship, price is the most important criteria and buyer may adopt arm's-length approach.

Reveal Solution Next Question

QUESTION: 70

According French and Raven's base model, which of the following are sources of personal power that can be used in commercial negotiation? Select THREE that apply.

Purchasing spend power
Expert power
Competitive power
Trademark power
Coercive power
Legitimate power

Answer(s): B,E,F

Explanation:

A useful model of personal power that has survived the test of time and provide a simple way to analyse negotiation in French and Raven's Power Base Model, which describes six bases of power:

Reveal Solution Next Question

QUESTION: 71

Which of the following are hardball tactics in negotiations? Select TWO that apply.

Expand the pie
Snow job
Good cop, bad cop
Sweetening the deal
Bridging

Answer(s): B,C

Explanation:

In difficult negotiations and disputes, hardball tactics like punishment and threats often seem like the only way to win concessions. Some negotiators seem to believe that hardball tactics are the key to success in any negotiation. They resort to extreme demands and even unethical behaviour to try to get the upper hand in a negotiation.
The following are 8 typical hardball tactics:
1. Good cop / Bad cop
2. Low ball / High ball
3. Bogey
4. The Nibble
5. Chicken
6. Intimidation
7. Aggressive Behaviour
8. Snow Job
You can read the details of each tactic here.
In the contrary to hardball tactics, negotiators can adopt integrative approach to the negotiation.
Some of integrative tactics are:
1. Expand the Pie
2. Bridging
3. Post Settlement Settlement
Et cetera

Reveal Solution Next Question

QUESTION: 72

Win-lose approach is most likely to be associated with which of the following type of relationship?

Adversarial
Partnership
Strategic alliance
Outsourcing

Answer(s): A

Explanation:

Distributive approach to negotiation used when the interested parties are attempting to divide something up or distribute something of value, also known as zero-sum approach or win-lose. Win- lose approach is useful when the relationship with the other party (TOP) is short-term and once-off.
The question mentions 4 types of relationship:
Adversarial: Both seek to maximize position at the expense of the other. Almost no trust, communication and cooperation. These suppliers will probably provide non-core products or services with the buyer purchasing them on a one-off basis.
Outsourcing relationship: Use competent suppliers to manage non-core businesses previously done in-house. Require high level of trust and collaboration Partnership: Both work closely on long term development by sharing information, technology and ideas.High level of trust with the aim to benefit both parties (win-win) Strategic alliance: Both parties identify areas where they could collaborate to create mutual benefits Among these 4 types of relationship, only adversarial is once-off. Then it is the correct answer.

Reveal Solution Next Question

Free L4M5 Exam Braindumps (page: 18)

QUESTION: 69

Explanation:

QUESTION: 70

Explanation:

QUESTION: 71

Explanation:

QUESTION: 72

Explanation: