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CIPS L4M5 Exam (page: 7)
CIPS Commercial Negotiation
Updated on: 25-Dec-2025

Viewing Page 7 of 56
L4M5 PDF 275 Questions

Mike is a junior buyer who has been working for a manufacturing organisation for two years, specializing in purchasing research. Over this time, he has built good relationships within his team and with other departments.
Which of the following sources of power is Mike most likely to possess?

  1. Referent
  2. Reward
  3. Position
  4. Coercive

Answer(s): A

Explanation:

Referent power is based on personal relationships and the respect or admiration one earns within an organization. Given Mike's positive relationships and his rapport with team members and other departments, he is most likely to have referent power. This power type is influential in negotiation as people are more willing to work with someone they respect, as outlined in CIPS power dynamics in negotiation.



A procurement manager is considering negotiating variable pricing for a contract duration of 12 months. Would this be the right thing to do?

  1. No, because this will not enhance the buyer-supplier relationship
  2. No, because it will prove difficult to budget for the duration of the contract and provide financial uncertainty
  3. Yes, because this method of pricing will always provide value for money
  4. Yes, because it will build relationships with the supplier and provide a stronger platform for the next contract renewal

Answer(s): B

Explanation:

Variable pricing can lead to budgeting challenges and financial uncertainty over a 12-month period.
While variable pricing may allow flexibility, it complicates financial planning and forecasting. For predictable budgeting and reduced financial risk, fixed pricing is typically preferred in such contract durations, aligning with CIPS recommendations on pricing models in contract management.



Where there are high levels of commitment to relationships between both the buyer and supplier, this is seen as collaborative and beneficial to negotiations. Is this statement correct?

  1. Yes, characteristics include risk management and strategic planning
  2. No, this can be classified as adversarial
  3. Yes, characteristics include arm's length transactions and minimal communication
  4. No, collaboration does not require commitments from either side

Answer(s): A

Explanation:

A collaborative relationship is characterized by mutual commitment, which enhances risk management and strategic planning between buyer and supplier. High levels of trust and commitment enable both parties to work closely to achieve shared objectives, creating a beneficial negotiation environment. This approach aligns with CIPS's principles of collaborative procurement relationships.



The activity of listening in a negotiation includes which of the following processes?

Hearing
Interpreting
Rapport
Influencing

  1. 1 and 2 only
  2. 2 and 3 only
  3. 1 and 3 only
  4. 2 and 4 only

Answer(s): A

Explanation:

Listening involves both hearing (1) and interpreting (2) the information shared by the other party. Effective listening is an active process that goes beyond simply hearing words; it involves interpreting meaning, understanding the speaker's intent, and responding accordingly. CIPS emphasizes these steps as part of effective communication in negotiations.



Champion Toys (CT) is negotiating a large order of luxury toys with its supplier, Top Teds. CT has identified that lead times, order quantities, and delivery locations are tradeables that could be used in this negotiation. At which negotiation stage should CT introduce these tradeables?

  1. Bargaining
  2. Closure
  3. Proposing
  4. Opening

Answer(s): A

Explanation:

Bargaining is the negotiation stage where tradeables are typically introduced and discussed. During this phase, both parties exchange offers and concessions, using tradeables such as lead times and order quantities to find a mutually acceptable agreement. This aligns with CIPS's guidance on the stages of negotiation.



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

Thanks for the practice questions they helped me a lot.
Anonymous