Exam Code: L4M5
Exam Name: Commercial Negotiation
Certification Provider: CIPS
Corresponding Certification: CIPS Level 4 Diploma in Procurement and Supply

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CIPS L4M5 Exam Syllabus Topics:

Topic	Details
Topic 1	Team management and the influence of stakeholdebest alternative to a negotiated agreement (BATNA)rs in negotiations Definitions of commercial negotiation
Topic 2	Costing methods such as absorption, marginal or variable and activity-based costing Know how to prepare for negotiations with external organisations
Topic 3	Macroeconomics and its influence on commercial negotiations Contrast the economic factors that impact on commercial negotiations
Topic 4	Differentiate between the types of approaches that can be pursued in commercial negotiations Distributive win-lose, distributive approaches to negotiation
Topic 5	Understand key approaches in the negotiation of commercial agreements with external organisations Sources of conflict that can arise in the work of procurement and supply
Topic 6	How behaviours should change during the different stages of a negotiation Compare the key communication skills that help achieve desired outcomes
Topic 7	Organisational power: comparing the relative power of purchasers and suppliers Explain how the balance of power in commercial negotiations can affect outcomes
Topic 8	Building relationships based on reputation, and trust Repairing a relationship The relationship spectrum
Topic 9	How purchasers can improve leverage with suppliers The importance of power in commercial negotiations
Topic 10	Identify the different types of relationships that impact on commercial negotiations Pragmatic and principled styles of negotiation
Topic 11	Setting objectives and defining the variables for a commercial negotiation Use of telephone, teleconferencing or web-based meetings
Topic 12	Analyse the application of commercial negotiations in the work of procurement and supply Negotiation in relation to the stages of the sourcing process
Topic 13	Analyse how to assess the process and outcomes of negotiations to inform future practice Protecting relationships after the negotiation

Reference: https://www.cips.org/learn/qualifications/diploma-in-procurement-and-supply/commercial-negotiation-l4m5/

CIPS Commercial Negotiation Sample Questions:

Question #1

Which of the following are effective approaches when procurement professionals negotiate with monopoly suppliers?
1. Delaying payment with monopoly suppliers as long as possible to increase bargaining power
2. Setting up stronger BATNA
3. Engaging in the negotiation with a distributive approach
4. Eliminating requirements in the specification that prioritises monopoly suppliers

A. 2 and 3 only
B. 3 and 4 only
C. 1 and 4 only
D. 2 and 4 only

Reveal Solution Discussion 0

Correct Answer: D 🗳️