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CIPS L4M5 Commercial Negotiation exam covers a wide range of topics, including the negotiation process, negotiation planning, the use of different negotiation styles, and the development of negotiation skills. The candidate is expected to have a clear understanding of the different types of negotiations, such as distributive and integrative negotiations, and how to use them effectively in different situations. L4M5 Exam also covers the importance of building and maintaining relationships with suppliers, stakeholders, and clients.

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CIPS Commercial Negotiation Sample Questions (Q115-Q120):

NEW QUESTION # 115
During a negotiation, a procurement manager suggests that the two companies should split the difference which would benefit both the supplier and buyer. Which persuasion method is she using?

A. Compromise
B. Threat
C. Good cop/bad cop
D. Logic

Answer: A

Explanation:
In the scenario, the manager propose to 'split the difference', which means each party will accept some of their demands and concede some. This is known as 'Compromise'.
Reference: CIPS study guide page 163-165

NEW QUESTION # 116
Citywide Developments Ltd (CDL) is a construction programme management company that delivers the design and build of high-value property development schemes. CDL uses third-party consultant design services, using named consultants in the contract. CDL has recently observed increases in the consultancy day rate for these consultants. Which of the following tradeable concessions could CDL offer when negotiating with the suppliers of design services, in order to achieve lower rates of pay, but without lowering the quality of service?

A. Remove the requirement for the named personnel
B. Accept unqualified trainee consultants
C. Reduce the volume-based rate discounts
D. Offer a shorter consultant working day

Answer: A

Explanation:
Reference: CIPS L4M5 Study Guide, Section 3.2 - The Negotiation Process

NEW QUESTION # 117
Should a buyer use closed questions in a negotiation?

A. No, the buyer should maximise the use of open questions
B. No, supplier will consider closed questions as provocation
C. Yes, because they urge the supplier to provide more :
D. Yes, because closed questions help to reconfirm certain facts

Answer: D

Explanation:
Asking questions the right way is both an art and a science. Ask the question the wrong way, and the other negotiator might act like a turtle, becoming defensive and withdrawing into their shell. Ask the question the right way, and the other negotiator might "spill the beans.".
Closed Questions: How and when to use them?
Closed questions are those that require a short and focused answer, and are especially helpful in the beginning stages of the negotiation to encourage interaction. They can be used to clarify a point, or to reconfirm certain facts. For example, you can use a closed question to confirm the amount of units the company can produce in a week, or to clarify that what they are really saying is that they don't feel comfortable outsourcing their accounts to India. Most closed questions only require a simple "yes" or "no" response, so there really isn't much room for misinterpretation - great for finding out where both you and they stand.
Reference:
CIPS study guide page 169
What Questions Can We Ask In Negotiations?

NEW QUESTION # 118
Which of the following is considered a strength of a 'logical' style negotiator?

A. Methodical
B. Interrelate issues easily and make quick decisions
C. Friendly and accessible
D. Assertive

Answer: A

Explanation:
:
A useful and simple shorthand for preferred negotiation styles is summarised by four simple descriptor:
'warm', 'tough', 'logical' and 'dealer', which can be applied to describe individuals' dominant preferred style in most circumstances.
Warm - a people person
Tough - a hard-nosed negotiator
Logic - a numbers person
Dealer - a trader who loves bargaining
Strengths, weaknesses of logical style are described below:
Table Description automatically generated

NEW QUESTION # 119
The buyer's bargaining power tends to be relatively higher than supplier's bargaining power in which of the following circumstances?

A. The buyer demand is so urgent that it can't be postponed
B. The buyer does not have the option to move to an alternative supplier
C. The buyer's spend takes up a small proportion of supplier revenue
D. The buyer is large in size relative to its suppliers

Answer: D

Explanation:
Buyer power gives customers/consumers (buyers) the ability to squeeze industry margins by pressuring firms (the suppliers) to reduce prices or increase the quality of services or products offered.
There are four major factors to consider when determining the bargaining power of buyers:
1. Number of buyers relative to suppliers: If the number of buyers is small relative to that of suppliers, the buyer's power will be stronger.
2. Dependence of a buyer's purchase on a particular supplier: If a buyer is able to get similar products
/services from other suppliers, buyers depend less on a particular supplier. Therefore, the power of the buyer would be greater.
3. Switching costs: If there are not many alternative suppliers available, the cost of switching is high.
Therefore, buyer power would be low.
4. Backward Integration: If the buyer is able to integrate or merge suppliers, the buyer has greater bargaining power over the existing suppliers.
When is Bargaining Power of Buyers High/Strong?
There are fewer buyers relative to that of suppliers
The switching costs of the buyer are low
If the buyer is able to backward integrate
The buyer purchases product in bulk (high volume)
The buyer is able to get similar product/services from other suppliers
The buyer purchases the majority of the seller's products
Several substitutes are available on the market
Product is not differentiated
Reference:
CIPS study guide page 54-56
What is the Bargaining Power of Buyers?

NEW QUESTION # 120
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