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Latest CIPS L4M5 Certification Practice Test Questions
The CIPS L4M5 exam consists of multiple-choice questions and is divided into three sections: negotiation planning, negotiation execution, and post-negotiation activities. Candidates are expected to demonstrate their understanding of the negotiation process, negotiation strategies, and tactics, as well as their ability to analyze and evaluate supplier proposals. L4M5 exam also tests candidates' ability to identify risks and opportunities in negotiations and their ability to manage supplier relationships.
NEW QUESTION # 49
An organisation is developing the specification for a capital purchase project. An important stakeholder has doubt on the draft specification. The buyer invites him to the product function meetings. In these meeting the attendees can raise their concerns, the specification development team takes in all the concerns and adjusts the specification accordingly. What kind of technique is the specification development team using?
- A. Coalition
- B. Directive
- C. Visionary
- D. Persuasive reasoning
Answer: A
Explanation:
:
In the scenario, anyone who has concerns can join a meeting to raise their thoughts. The project team takes the stakeholders' ideas into account. This is known as coalition: A group of people or organisations come together and work collaboratively to achieve some goals. Specifically in this scenario, the goal is creating a high-quality and unified specification for an important project.
NEW QUESTION # 50
The sourcing manager has decided to adopt an adversarial style of negotiation to take advantage of the buyer's greater bargaining power over the suppliers. In what other circumstances should an adversarial relationship be used?
- A. In a monopoly market as the supplier will respond by conceding quantity discounts
- B. When the issues concerned are non-negotiable, for example, health and safety commitments
- C. When the supplier is likely to respond with further concessions to maintain a long-term relationship
- D. In all forms of negotiation as each party is always trying to gain advantage over the other
Answer: B
Explanation:
This question is a duplicate of Question 17. The answer remains the same: When the issues concerned are non- negotiable, such as health and safety commitments (D). Non-negotiable issues require an assertive approach to ensure adherence to essential standards, as highlighted in CIPS's framework for negotiation styles.
NEW QUESTION # 51
A good negotiator invests time in understanding the needs of the individuals in a negotiation. Is this statement true?
- A. No, becausenegotiator should attempt to satisfy the needs of the other organisation only
- B. Yes, because individual needs largely influence the outcomes of the negotiation
- C. No, because satisfying individual needs will lead to conflict of interest and unethical practices
- D. Yes, because individuals' needs always unify with their own organisation's needs and wants
Answer: B
Explanation:
Skilled negotiators seek to understand the needs of the other parties, as well as their own. In doing so, it allows them to determine a strategy that their own needs are met. Failing to understand the other party's needs is one of the most common reason for an unsuccessful negotiation. In the commercial negotiation, procurement team does not negotiate with organisation, they negotiate with individuals. It is therefore important to recognise that there are two levels of needs:
The organisation - What the organisation wants to achieve. This is generally well stated and understood The individual - what is in it for the individual? This is generally not stated, rarely discussed, but very motivational. It is vitally important therefore that time is invested in understanding the needs of the individual Skilled negotiators are aware of the needs that occur at both levels, and develop creative options and strategies that attempt to satisfy these needs.
NEW QUESTION # 52
Champion Toys (CT) is negotiating a large order with Top Teds. CT has identified lead times, order quantities, and delivery locations as tradeables. At which negotiation stage should CT introduce these tradeables?
- A. Proposing
- B. Closure
- C. Bargaining
- D. Opening
Answer: C
Explanation:
Tradeables-variables such as price, delivery, quality, and payment terms-are introduced in the bargaining stage of negotiations. This is the phase where both parties test positions, make concessions, and trade issues to create acceptable packages. Proposing and opening are earlier stages focused on setting out agendas and clarifying needs, while closure comes after tradeables are resolved. Introducing tradeables too early can weaken leverage, and leaving them too late risks deadlock. Bargaining ensures the structured exchange of concessions while protecting the overall bargaining mix.
Reference: CIPS L4M5 (2nd ed.), LO 1.1 - Negotiation stages, bargaining as the point for tradeables.
NEW QUESTION # 53
Which of the following are common forms of collaborating approach in Thomas-Kilmann conflict resolution model? Select THREE that apply.
- A. Trying to win at any cost
- B. Seeking a quick middle-ground position
- C. Exploring a disagreement to learn from each other's insights
- D. Resolving some conditions that would otherwise have them competing for resources
- E. Trying to find a creative solution to current problem
- F. Yielding to another's point of view
Answer: C,D,E
Explanation:
Collaborating is both assertive and cooperative. When collaborating, an individual attempts to work with the other person to find a solution that fully satisfies the concerns of both. It involves digging into an issue to identify theunderlying concerns of the two individuals and to find an alternative that meets both sets of concerns. Collaborating between two persons might take the form of exploring a disagreement to learn from each other's insights, resolving some condition that would otherwise have them competing for resources, or confronting and trying to find a creative solution to an interpersonal problem.
NEW QUESTION # 54
Stalemate is more likely to happen if both parties trade more variables in a commercial negotiation. Is this assumption true?
- A. No, because more variables will facilitate more possible negotiated outcomes
- B. No, because the party who offers more variables will have lower bargaining power
- C. Yes, because more variables will cause more conflicts of interest
- D. Yes, because the negotiation will last endlessly if there are too many variables
Answer: A
Explanation:
Negotiation variables such as price or contract length, etc are that can be traded with TOP in a negotiation.
The more variables you can identify, the better. The more variables you can identify and articulate, the lower the chances of the negotiation reaching deadlock as more possibilities are facilitated regarding more creative solutions.
Below are examples of negotiation tradeables in buying professional services:
LO 2, AC 2.3
NEW QUESTION # 55
Economic growth can be measured by...?
- A. The PPI
- B. SBLI
- C. The CPI
- D. GDP
Answer: D
Explanation:
Gross Domestic Product (GDP) is the monetary value of the goods and services manufactured or supplied in a financial period. In general terms, when the GDP rate falls or slows down, there will be a fall in demand forgoods and services demanded in the economy, with a fall in firms' revenue and profit margins. When GDP is rising, there will be an increase in demand.
Consumer Price Index (CPI) is weighted measurement that evaluates the average cost of a basket of goods bought by a consumer.
Producer Price Index (PPI) is average changes in prices that a producer receives in return for its goods or services.
Small Business Lending Index (SBLI) is an indicator of small business lending trends.
NEW QUESTION # 56
To buying organisation, savings can be achieved from different saving levers or tactics. Which of the following are means that deliver savings through optimising specifications?
- A. Part substitution
- B. Volume pooling
- C. Budget linkages
- D. Value engineering
- E. Compare total cost of ownership
Answer: A,D
Explanation:
If driving greater value and efficiency from your supply base is your end, you should remember that there are many ways to do this without seeking to negotiate lower prices. Below are 7 types of saving levers:
NEW QUESTION # 57
A skilled negotiator will use a range of questioning techniques in a negotiation. If they wished to explore options with the other party without making any formal commitment, which type of question style would they use?
- A. Multiple
- B. Hypothetical
- C. Reflective
- D. Leading
Answer: B
Explanation:
Reference: CIPS L4M5 Study Guide, Section 3.2 - The Negotiation Process
NEW QUESTION # 58
When planning a negotiation for sourcing internationally, which of the following divergent positions, and therefore potential conflict areas, should be prepared for? Select TWO that apply:
- A. Team makeup
- B. Team size
- C. How the negotiation will be closed out
- D. Timing and location
- E. Cultural differences
Answer: B,D,E
NEW QUESTION # 59
A negotiation meeting commences with the supplier asking the buyer 'How do you feel about the service you receive from us currently?' The supplier then asks 'What do you think about our latest products?' followed by
'How do we compare with other suppliers you use?' The supplier is using which type of questions?
- A. Open questions
- B. Probing questions
- C. Closed questions
- D. Hypothetical questions
Answer: A
Explanation:
Reference: CIPS L4M5 Study Guide, Section 3.2 - The Negotiation Process
NEW QUESTION # 60
As a buyer for a large stationery company you have been notified of an upcoming price increase from your provider for paper. When you check the contract you realise that it expired 30 days ago so you are no longer in contract. You realise the supplier can now charge what they like.
You call the supplier and attempt to negotiate over the phone but are unsuccessful. What would be the best thing to do?
- A. Try to bargain with the supplier offering a further contract
- B. Accept the price increase as it appears reasonable
- C. Cancel the contract immediately without attempting any negotiations
- D. Threaten the supplier that you will cancel all contracts unless they retract the price increase
Answer: A
Explanation:
Once the contract has expired, the buyer no longer has contractual protection on pricing, which significantly weakens their position. However, this situation also creates an opportunity to re-establish leverage by offering future value. By proposing a new or extended contract, the buyer introduces certainty, continuity of business, and potential volume commitment for the supplier, which can be traded in return for moderated pricing. Accepting the increase without challenge offers no commercial control, while threats or immediate cancellation risk damaging the relationship and supply continuity. CIPS guidance emphasises using future commitment as a bargaining lever, especially when informal negotiations fail and contractual leverage no longer exists.
Reference: CIPS L4M5 Commercial Negotiation (CORE), 2nd edition - LO 1.2: Applying negotiation techniques in real commercial situations.
NEW QUESTION # 61
Which of the following are sources of personal power?
* Legitimate power
* Strategic power
* Expert power
* Leverage power
- A. 2 and 4 only
- B. 2 and 3 only
- C. 1 and 2 only
- D. 1 and 3 only
Answer: D
Explanation:
Personal poweris derived from an individual's unique qualities or expertise. It differs from positional power, which is based on job title or authority.Legitimate powerstems from an official position of authority, whileexpert poweris based on skills, knowledge, and credibility. These are both commonly used by procurement professionals to influence outcomes in negotiations.
"Expert power arises from experience, qualifications, or specialist knowledge that is recognised and respected by others. Legitimate power stems from a formal position or role within an organisation." (L4M5 Commercial Negotiation, 2nd edition, Section 3.1 - Sources of Power in Negotiation) Note: Strategic and leverage power are more aligned with organisational positioning and external factors, not personal influence.
NEW QUESTION # 62
Which of the following is potentially a major source of conflict?
- A. Information gathering
- B. Teamwork
- C. Shared goals and values
- D. Power imbalance
Answer: D
NEW QUESTION # 63
Which of the following is the most appropriate approach to investors or shareholders who have high level of influence but low interest in the running of business?
- A. Keep these people inform through general communication media
- B. Manage them closely
- C. Engage and consult with them regularly
- D. Engage and keep them satisfied
Answer: D
Explanation:
Investors or shareholders who have high level of influence but low interest belong to 'Keep satisfied' quadrant of Mendelow's Stakeholder Matrix.
You may read 2 versions from L4M1 and L4M5 here:
Table Description automatically generated
LO 1, AC 1.1
NEW QUESTION # 64
Which of the following should be adopted to minimise the conflict between parties in commercial negotiation?
- A. Ground rules
- B. Ground zero
- C. The rule of law
- D. Ground beam
Answer: A
Explanation:
:
Ground rules are the basic rules for doing something (Cambridge Dictionary). A negotiation goes more smoothly if ground rules are adopted. Then if something goes awry at a later time, you can point out the ground rule that has been violated. Procurement professional should seek to minimise conflict over process through agreeing 'ground rules' and approach as far as possible with the other party in advance of any negotiation meetings.
There should be two sets of ground rules: 1) ground rules for the negotiations between the two parties and 2) ground rules for the negotiating team itself. This article is about the negotiating team ground rules.
The rule of law is the condition in which all members of society, including its political leaders, accept the authority of the law.
Ground zero describes the point on the Earth's surface closest to a nuclear detonation. In the case of an explosion above the ground, ground zero refers to the point on the ground directly below the nuclear detonation.
The Ground Beam is the beam which is provided usually at the foundation level to support building walls, joists, etc.
NEW QUESTION # 65
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