Why is it more difficult for buyers in the public sector to build relationships with suppliers?
Answer(s): D
It can be difficult for buyers in the private sector to build relationships with suppliers because of rules that state competitive tenders must be undertaken every few years (within the EU this is usually every 4). This means that both parties aren't as invested in developing the relationship as it's possible the contact will end shortly. Competitive tendering is a requirement in the public sector to ensure value for money for taxpayers. See p.79 for further details. There are no rules stating Public Sector organisations can't have good relationships with suppliers, and in fact most will have good relationships with their current suppliers- the issue is that neither party can get too invested in the relationship as everyone knows it may end shortly. There are rules, however, against entering into Partnership relationships (which is discussed in chapter 3).
If a stakeholder has high power in a business but isn't interested in your procurement activity, what should be your management style for dealing with this stakeholder?
Answer(s): A
The correct answer is `keep satisfied' because the stakeholder is high power and low interest. This is the top left corner of Mendelow's Stakeholder Matrix see p.81
The CEO of a business has asked his procurement manager to source new machinery for the factory. This machinery will help create a new line of products which will give the company a competitive edge. The CEO is heavily invested in this procurement activity as profits have been lower than expected this year and this new line of products could help increase profitability. How should the procurement manager include the CEO in the procurement activity?
Answer(s): C
The correct answer is `The CEO is a key player- so it is important he is involved early in the process'. The CEO has high power and high interest which puts him in the top right-hand corner of Mendelow's Stakeholder Matrix (p.81). CIPS says Key Players should be involved early in the procurement process (p.82).
According to Mendelow, there are four ways stakeholders can be managed, depending on the amount of power they have, and how interested they are in your project. What are these four categories?
The four categories are; Minimal effort, manage closely, keep informed, keep satisfied. You can see the Matrix on p.81. An easy way to remember this is there are 2 Ms and 2 Keeps. And these sit on opposite sides of the matrix.
Richie has come up with a new idea for sourcing items for the business but feels that it will have mixed reviews within the team. He thinks that some people will be in favour of the idea, and some will be against it. He doesn't think the CEO will have a strong opinion either way. In order to decide whether to put a business case together and present his idea to the CEO- what should Richie do?
Richie should do a Force Field Analysis this is explained on p.86 and is an idea of Kurt Lewin it identifies the driving forces for a project and the restraining forces (basically who will be for it and who will be against it). The textbook doesn't go into much detail on this but there are questions on it in the exam- so have a quick google to familiarise yourself with Kurt Lewin's Force Field Analysis.
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