Commercial Negotiation L4M5 Exam Questions
When developing a negotiation approach, according to recognised theory (for example Mendelow), how should stakeholders with high interest but low power be managed?
Correct Answer: C
According toMendelow’s Matrix, stakeholders withhigh interest but low powershould be keptinformed. Their interest means they care about the negotiation ' s outcome, but their low power means they can ' t significantly influence it. Keeping them informed avoids alienation and ensures smoother implementation of negotiated agreements.
“Stakeholders with high interest but low power should be managed by keeping them informed. They may become powerful advocates or opponents in the future, so engaging them is a strategic approach.”
(L4M5 Commercial Negotiation, 2nd edition, Section 1.5 - Stakeholder Management in Commercial Negotiations)
Which of the following would cause a demand curve for a good to be price inelastic?
Correct Answer: D
Essential goods and services such as electricity, fuel, basic food stuffs, commuter transport and habitual products such as tobacco, alcohol and sugar-based drinks are often sited as facing a relatively inelastic demand curve. This means when the price goes up, the quantity demanded does not decrease very much and so they are often the target of government taxation.
LO2, AC 2.2
Which of the following would cause a demand curve for a good to be price inelastic?
Correct Answer: D
Essential goods and services such as electricity, fuel, basic food stuffs, commuter transport and habitual products such as tobacco, alcohol and sugar-based drinks are often sited as facing a relatively inelastic demand curve. This means when the price goes up, the quantity demanded does not decrease very much and so they are often the target of government taxation.
LO2, AC 2.2
A negotiation meeting between a buyer and supplier has taken several hours. Both parties believe the negotiation is starting to reach a close. Before the supplier makes their closing statements, they are most likely to be doing which of the following?
Correct Answer: B
As negotiations near closure, skilled negotiators carefully observe for buying signals—verbal cues (“That sounds reasonable…”) and non-verbal cues (nodding, smiling, leaning forward). These indicate readiness to agree and confirm whether it is the right time to close. At this stage, both sides usually stop gathering data or building rapport, as the focus is on confirming alignment and avoiding last-minute derailments. Closing too early may risk missing concessions, but delaying risks cooling momentum. Recognising buying signals ensures closure occurs at the optimal point, aligning with preparation and tactical awareness.
A garden furniture supplier who is currently in negotiations for a high-value contract has offered the procurement manager a visit to their site. The supplier suggests that during this visit, they can undertake the contract negotiation. What would be an appropriate response from the procurement manager?
Correct Answer: D
Negotiating at the supplier ' s site can give the supplier a psychological advantage due to their familiarity with the setting. To ensure a neutral and balanced negotiation environment, it’s preferable to conduct negotiations in a neutral location or through structured channels, as recommended in CIPS ' s guidance on negotiation settings.