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CIPS L4M5 Exam (page: 5)
CIPS Commercial Negotiation
Updated on: 25-Dec-2025

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L4M5 PDF 275 Questions

Fast & Easy Limited, a global fast food retailer, is in a negotiation with its major meat supplier. The supplier is asking for a 2% price increase, which Fast & Easy is strongly resisting. The supplier justifies this increase by stating that currency fluctuations, an unstable economic climate, and rising transport costs have necessitated this increase.
Which influencing tactic is the supplier using?

  1. Rational persuasion
  2. Inspirational appeal
  3. Coalition
  4. Personal appeal

Answer(s): A

Explanation:

The supplier is using Rational persuasion by providing logical reasons, such as economic conditions and increased costs, to justify the price increase. This approach uses factual information to influence the buyer's decision, aiming to present the price hike as a reasonable adjustment, which aligns with CIPS strategies on influencing tactics in negotiations.



A procurement manager has been asked to procure 1, 000 pens. He suggests to his manager that to obtain the best value for money, they should undertake a competitive bidding process. Would this be the best course of action?

  1. Yes, as all procurement processes should go through competitive bidding to achieve the best value for money
  2. Yes, the process will be opened up to many suppliers and therefore will result in a cheaper price for the pens
  3. No, competitive bidding should only be used when the value justifies the time spent on the process
  4. No, competitive bidding should only be used in public sector organisations

Answer(s): C

Explanation:

Competitive bidding is generally recommended for high-value or complex purchases where the cost and time required for the bidding process are justified. For low-value, routine items like pens, the time and resources required for competitive bidding may outweigh the potential cost savings, as noted in CIPS best practices. Hence, Option C is the best answer.



When is an adversarial style of negotiation appropriate?

  1. When one party has high bargaining power
  2. When a buyer feels the relationship is important
  3. When both parties want a win/win outcome
  4. When a sustainable partnership is key

Answer(s): A

Explanation:

An adversarial negotiation style is appropriate when one party has high bargaining power and is focused on maximizing its benefit rather than maintaining a long-term relationship. This approach often involves competitive tactics that leverage power disparities, aligning with CIPS guidance on when adversarial tactics may be strategically used in negotiations.



The National Schools Purchasing Forum (NSPF) is a procurement organisation that purchases goods and services on behalf of schools on a national scale. NSPF is close to concluding negotiations in a meeting with Hygienics For All (HFA) for the supply of consumables to school washrooms. Both parties have reached an agreeable position, and NSPF feels it is important that they conclude the negotiation at this point.
What type of questions should NSPF ask HFA to achieve this?

  1. Hypothetical questions
  2. Open questions
  3. Closed questions
  4. Probing questions

Answer(s): C

Explanation:

Closed questions are effective for concluding negotiations, as they often elicit straightforward yes-or- no responses, helping to finalize terms and confirm agreement on specific points. This approach facilitates a clear and concise close to discussions, ensuring that both parties confirm their commitment to the agreed terms, as recommended by CIPS negotiation strategies.



Which of the following are microeconomic factors? Select THREE that apply.

  1. Rates of taxation
  2. Availability of investors
  3. Unemployment levels
  4. Distribution channels
  5. Rates of inflation
  6. Levels of competition

Answer(s): B,D,F

Explanation:

Microeconomic factors refer to elements that affect individual businesses or sectors rather than the economy as a whole. In this case:

Availability of investors (B): Access to investors impacts capital availability for businesses.

Distribution channels (D): Distribution methods directly influence a business's ability to get products to market.
Levels of competition (F): Competition affects pricing and strategic decisions within specific industries.
Taxation rates, unemployment levels, and inflation rates are considered macroeconomic factors, affecting the economy on a broader scale, as per CIPS's definitions of microeconomic vs.
macroeconomic influences.



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Katiso Lehasa 9/15/2025 11:21:52 PM

Thanks for the practice questions they helped me a lot.
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