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CIPS L4M5 Exam Syllabus Topics:

Section	Objectives
Topic 1: Power, ethics and communication in negotiation	- Influencing factors 1. Communication and interpersonal skills 2. Ethical considerations in negotiation 3. Sources of negotiation power
Topic 2: Negotiation fundamentals	- Principles of commercial negotiation 1. Definition and purpose of negotiation 2. Types of negotiation (distributive vs integrative)
Topic 3: Negotiation planning and preparation	- Preparation techniques 1. Setting objectives and targets 2. BATNA and reservation points 3. Information gathering and analysis
Topic 4: Negotiation strategies and tactics	- Approaches to negotiation 1. Tactical behaviours and influence techniques 2. Collaborative and competitive strategies 3. Concession strategies

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CIPS Commercial Negotiation Sample Questions (Q256-Q261):

NEW QUESTION # 256
A buyer requests a £2,000 reduction in price at the end of negotiations. The supplier nods and smiles, shakes hands, and leaves. Should the buyer believe the reduced price is agreed?

A. No, a non-verbal cue isn't sufficient to assume agreement
B. Yes, as that was the last counter-offer so it will stand
C. Yes, the nod and smile indicate agreement
D. No, at least four verbal cues are required to confirm agreement

Answer: A

Explanation:
CIPS stresses that clear verbal confirmation is required for agreements. Non-verbal signals (smiles, nods, handshakes) can indicate politeness or ambiguity but do not constitute binding agreement. Assuming agreement risks later disputes or misunderstandings. Skilled negotiators ensure closure by explicitly summarising agreed terms and documenting them. Non-verbal communication is supportive, not decisive, in contract negotiation contexts.
Reference: CIPS L4M5 (2nd ed.), LO 3.2 - Communication and persuasion; importance of verbal confirmation.

NEW QUESTION # 257
Which of the following are examples of variable costs?

A. 3 and 4 (Raw materials expenditure and Delivery costs for materials)
B. 1 and 4 (Building and site rent and Delivery costs for materials)
C. 1 and 3 (Building and site rent and Raw materials expenditure)
D. 2 and 3 (Annual insurance premium and Raw materials expenditure)

Answer: A

Explanation:
Reference: CIPS L4M5 Study Guide, Section 2.2 - Cost and Price Analysis

NEW QUESTION # 258
At which stage in a negotiation would questions be asked to obtain missing information?

A. The opening stage
B. The testing stage
C. The bargaining stage
D. The proposing stage

Answer: B

Explanation:
:
There are 5 key phases of negotiation:
The opening phase: confirm understanding and get the issue on the table The testing phase: check assumption and confirm understanding The proposing phase: asking 'if' The bargaining phase: using tradeables The agreement and closing phase The testing could take the form of questions following a presentation by either side or questions on a tender or proposal document received by the buyer from the potential supplier. The testing phase is necessary to confirm that your approach and objectives are appropriate for the negotiation situation you now find yourself in. Careful listening, observation and interpretation of TOP's responses may give indication of the following:
Areas where TOP is willing and unwilling to make concessions
What factors or issues TOP places a high value on
If there are any non-commercial or emotional factors that may be pertinent TOP's underlying interests - why they are taking the position they are.

NEW QUESTION # 259
Upper Woodborough Council is a government organisation that is seeking to reduce regular expenditure on facilities management services. Which of the following charges is an example of a fixed cost, that the council could renegotiate with the facilities management contractor to achieve savings?

A. Charges for monthly cleaning services
B. Annual price inflation indexation
C. Fuel for refuse collection services
D. Charges for reactive maintenance activity

Answer: A

Explanation:
Fixed costs are regular, predictable charges that do not vary directly with usage or demand. Monthly cleaning services are typically charged at a fixed, recurring rate, making them a clear example of a fixed cost that can be renegotiated to achieve savings. Fuel costs and reactive maintenance vary with activity levels, while inflation indexation is a pricing mechanism rather than a cost itself. CIPS advises buyers to focus on fixed-cost elements when seeking sustainable cost reductions, as changes deliver predictable and ongoing savings.
Reference: CIPS L4M5 Commercial Negotiation (CORE), 2nd edition - LO 2.2: Fixed and variable costs in negotiation and cost reduction.

NEW QUESTION # 260
In a commercial negotiation, a procurement professional believe that the larger the order quantity from buyer, the lower the supplier's average costs. Is this assumption true?

A. No, because the supplier may need to invest in new facility to meet buyer's demand
B. No, because supplier's average costs will rise as the buyer's demand increases
C. Yes, because larger order quantity will bring a considerable profit to supplier
D. Yes, because larger order quantity will always enable the supplier to reach its economy of scale

Answer: A

Explanation:
In some markets, suppliers experience peaks and troughs in demand and so buyers can increase their leverage through developing an understanding of how busy their vendor are at particular time during the year or business cycle and targetting at quieter period. Similarly, if a buyer can develop an understanding of supplier capacity and to what extent have they covered their fixed cost, they may be able to target suppliers when their average costs are likely to be lowest. Vendor's average costs will be higher at low and high capacity utilisation.
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NEW QUESTION # 261
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