QUESTION: 77

A good negotiator invests time in understanding the needs of the individuals in a negotiation. Is this statement true?

Yes, because individuals' needs always unify with their own organisation's needs and wants
No, because negotiator should attempt to satisfy the needs of the other organisation only
No, because satisfying individual needs will lead to conflict of interest and unethical practices
Yes, because individual needs largely influence the outcomes of the negotiation

Answer(s): D

Explanation:

Skilled negotiators seek to understand the needs of the other parties, as well as their own. In doing so, it allows them to determine a strategy that their own needs are met. Failing to understand the other party's needs is one of the most common reason for an unsuccessful negotiation. In the commercial negotiation, procurement team does not negotiate with organisation, they negotiate with individuals. It is therefore important to recognise that there are two levels of needs:
The organisation - What the organisation wants to achieve. This is generally well stated and understood
The individual - what is in it for the individual? This is generally not stated, rarely discussed, but very motivational. It is vitally important therefore that time is invested in understanding the needs of the individual
Skilled negotiators are aware of the needs that occur at both levels, and develop creative options and strategies that attempt to satisfy these needs.

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QUESTION: 78

Which of the following are signs indicating that TOP is using coercive power in commercial negotiation? Select TWO that apply.

Demonstrating fairness and respect
Withdrawal of benefits
Use of guilt
Technical expertise
Positive references

Answer(s): B,C

Explanation:

Coercive power comes from the belief that a person can punish other for non-compliance, and can be considered as the flip side of reward power. Coercive power rests in the individual's ability to change other people's behaviour through threat, intimidation, use of guilt, ability to embarrass or shame, or withdrawal of benefits,...

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QUESTION: 79

Which of the following is the true statement?

External stakeholders such as suppliers can largely influence an organisation's procurement negotiations
Internal stakeholder support will be important for both negotiation and contract performance
All connected stakeholders have a low level of impact on procurement negotiations
Commercial negotiation objectives should be driven by just the instincts of procurement

Answer(s): B

Explanation:

Internal stakeholder support will be important not just at the initial negotiation of the contract, but potentially throughout the life of the contract right through to exit. As a general rule, connected stakeholders (with the exception of suppliers) have a low level of influence on procurement negotiations.
Suppliers are connected stakeholders who have contractual relationships with the organisation. Commercial negotiation objective should be driven by the business needs of the organisation, and not just the instinct of procurement.

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QUESTION: 80

Which of the following is most likely a consequence of falling interest rate?

Increase aggregate demand
Decrease investment
Increase savings
Decrease consumption

Answer(s): A

Explanation:

If interest rate are too low and credit is too, cheap rates can fund a spending boom with consumers and businesses buying (investment) more than they can afford to pay back.

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QUESTION: 77

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QUESTION: 79

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