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Free CIPS L4M5 Exam Questions (page: 12)

Page 12 of 70
PDF with 275 Questions

Different types of relationships impact commercial negotiations. At a negotiation, which one of the following sources would help to support leverage for the buyer?

  1. Legitimate power
  2. Personality power
  3. Powerful colleagues
  4. Friends power

Answer(s): A

Explanation:

Legitimate power derives from formal authority or position, giving the buyer leverage in negotiations. This power type is more effective in establishing credibility and enforcing terms, as highlighted in CIPS's framework for negotiation power sources, unlike informal sources like personality or friendship.



Which of the following are internal factors when a supplier is making its pricing decision?

Price elasticity of demand
Environmental legislation
Risk management
The stage in the product life cycle

  1. 1 and 2 only
  2. 1 and 4 only
  3. 2 and 3 only
  4. 3 and 4 only

Answer(s): D

Explanation:

Risk management (3) and the stage in the product life cycle (4) are internal factors within the supplier's control and directly influence pricing decisions. These internal factors guide strategic pricing policies. In contrast, price elasticity of demand and environmental legislation are external factors, as per CIPS's guidelines on pricing influences.



Which of the following is active listening?

  1. Encouraging the other party to do all the talking
  2. Agreeing with what the other party has to say
  3. Summarising what has been said
  4. Ignoring what the other party has to say

Answer(s): C

Explanation:

Summarising what has been said is a key component of active listening, as it demonstrates understanding and engagement in the conversation. Active listening involves confirming and clarifying information, which helps build rapport and ensures accurate communication, as outlined in CIPS's guidelines for effective negotiation communication.



An adversarial style of negotiation is appropriate where the buyer has greater bargaining power over the supplier. In what other situations may the buyer adopt this style of negotiation?

  1. When the supplier is a monopolist and some advantages need to be gained from the agreement
  2. In a market that is full of alternative sources and substitute products
  3. Where there is a single sourcing strategy to eliminate the competing suppliers and retain only one
  4. In a market where the buyers are competing for fewer supply sources

Answer(s): B

Explanation:

An adversarial negotiation style is more suitable in a market with many alternative sources and substitutes (B).
When there are multiple suppliers, buyers have the upper hand and can adopt a competitive stance without risking supply continuity. This aligns with CIPS guidance on the use of adversarial styles in competitive markets with numerous alternatives.



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