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CIPS L4M5 Exam Syllabus Topics:

SectionObjectives
Understand the stages of commercial negotiations in procurement and supply- Understand the stages of a commercial negotiation
  • 1. Closure and agreement implementation
  • 2. Clarification and justification
  • 3. Preparation and planning
  • 4. Defining the ground rules
  • 5. Bargaining and problem solving
- Analyze the types of approaches that can be pursued in commercial negotiations
  • 1. Integrative (win-win) approaches
  • 2. The influence of power and trust in negotiations
  • 3. Pragmatic and principled approaches
  • 4. Distributive (win-lose) approaches
Understand how to prepare for negotiations in procurement and supply- Analyze the factors that impact on the approach to commercial negotiations
  • 1. The position of buyers and sellers
  • 2. The impact of time limits and deadlines
  • 3. Ownership and stakeholder perspectives
  • 4. Policies, procedures and protocols
- Understand how to prepare for a negotiation
  • 1. Defining objectives and variables
  • 2. Zones of potential agreement (ZOPA)
  • 3. The best alternatives to a negotiated agreement (BATNA)
  • 4. The use of bargaining mixes and trade-offs
Understand the interpersonal skills required for effective negotiation- Analyze the interpersonal skills required for effective negotiation
  • 1. Questioning and listening skills
  • 2. Assertiveness
  • 3. Body language and non-verbal communication
  • 4. Influencing and persuasion skills
- Understand the behavioral aspects of negotiation
  • 1. Ethical and unethical practices
  • 2. Perception and bias
  • 3. Concessions and trade-offs
  • 4. Conflict handling styles

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CIPS Commercial Negotiation Sample Questions (Q373-Q378):

NEW QUESTION # 373
Procurement team is required to improve leverage with their suppliers through spend consolidation. To check whether there is any opportunity to consolidate spend, which of the following should be priority of procurement team?

Answer: C

Explanation:
Explanation
In order to identify opportunities where you can increase your leverage with supplier, you need to understand your spend. Undertaking spend analysis of your accounts payable (AP) data is an essential first step here.


NEW QUESTION # 374
Which of the following is the internal factor that is taken into price of a product?

Answer: A

Explanation:
In order to answer this question, you should better consider each option:
'Exchange rate' is the value of one nation's currency versus the currency of another nation or economic zone.
This is a macroeconomic factor.
'Elasticity' refers to the degree to which individuals, consumers or producers change their demand or the amount supplied in response to price or income changes. This is a microeconomic factor Consumer tastes refer to the products and services that consumers consciously choose over others. Consumer tastes are so powerful that they can change how businesses conduct their activity. Like elasticity, this is also a microeconomic factor.
Among 4 options, only risk management is the internal factor. Risk pricing is a strategy applied by many companies in the world. To learn how to price the risk, you can read an article from McKinsey: https://www.
mckinsey.com/business-functions/marketing-and-sales/our-insights/how-to-price-risk-to-win-and-profit This is a question that a student met in her actual exam. The knowledge section is unknown.
LO: Unknown, AC: Unknown


NEW QUESTION # 375
If the price of a good is above the equilibrium price, which of the following will happen?

Answer: A

Explanation:
In microeconomics, equilibrium price is determined when the quantity demanded is equal to the quantity supplied at equilibrium price in a market, there will be no shortages and no surpluses. If we combine our supply and demand curves on one graph, the point at which they converge determines the equilibrium price. If the price is set above this price and you read across the graph you will see the supply excess demand and there will be a surplus. In order to reduce this surplus, the price will need to fall. The scenario is illustrated in the graph below:
Chart, line chart Description automatically generated


NEW QUESTION # 376
Jayden works as a procurement manager for a large IT organisation. They are currently in their third round of negotiations with an increasingly frustrated software solutions provider. Ben is representing the supplier.
Jayden has made eye contact in the latest meeting to confirm his understanding of each of Ben's points. What communication technique is Jayden demonstrating?

Answer: A

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


NEW QUESTION # 377
The only procurement risk inherent in a distributive negotiation approach is the potential loss in the outcome.
Is this statement TRUE?

Answer: B

Explanation:
Distributive negotiation carries several risks beyond justlosing out on value. These includedamaging supplier relationships,eroding trust, andreaching an impasse, where neither party can agree. This could result in delayed projects, increased costs, or supplier withdrawal.
"Distributive negotiation can lead to a breakdown in communication, impasses, and long-term relationship damage. The win-lose mindset can prevent collaborative problem-solving." (L4M5 Commercial Negotiation, 2nd edition, Section 3.5 - Risks of Distributive Approaches)


NEW QUESTION # 378
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