Which of the following are the most typical characteristics of integrative approach to negotiation? Select TWO that apply.

• A.Positional-based
• B.Claiming value
• C.Interest-based
• D.Short-term wins
• E.Creating more value

Correct Answer: C,E

Integrative approach to negotiation used when the interested parties are attempting to create more of something of value to share, also known as collaborative approach or win-win. Integrative, interest-based negotiation can facilitate constructive, positive relationship and establishes contracts between parties on a foundation of goodwill. In integrative bargaining, both parties seek to 'expand the pie' by creating more value for both the buyer and the seller. Integrative negotiation 'shares thepie' and is interest rather than positional based.
In distributive bargaining, the focus is on claiming value and getting as much of the pie as parties can.
Table Description automatically generated

LO 1, AC 1.2

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Which of the following will help to indicate personality preferences in four dimensions?

• A.Thomas-Kilmann Conflict Resolution model
• B.Intelligence quotient
• C.Mill's RESPECT mnemonic
• D.Myers-Briggs Type Indicator

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Whenimplementing value analysis or value engineering, which of the following acronyms reminds both buyer and supplier of ideas on removal, substitution and design-out of cost elements?

• A.SMART
• B.STOPS WASTE
• C.OWN-IT
• D.SAMOA

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Sumitomo Rubber Industries (SRI) is a Japan-based tyre manufacturer. In order to increase production, SRI is sourcing rubber from Southeast Asian firms. Which of the following micro factors are most likely to shift the balance of power to supplier? Select TWO that apply

• A.SRI's purchase amount makes significant proportion of supplier revenue
• B.Costs of changing suppliers are high
• C.Rubber from different suppliers is virtually similar
• D.SRI sets up its own rubber plantation
• E.There are no close substitutes for rubber

Correct Answer: B,E

There are many factors that can influence the balance of power in a negotiation. These factors are classified into 3 levels:
Macro level: STEEPLE framework: social, technological, economic, environment, political, legal and ethical Micro level: Porter's five forces:

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One-to-one buyer-supplier dynamics.
The question asks about the micro factors that increases supplier's bargaining power. Among 5 answers, only 2 are likely to increase buyer's power:
There are no close substitutes for rubber: the buyer has to buy rubber, not any other material.
Costs of changing suppliers are high: buyer entails a large barrier if they want to switch supplier.
Other answers cannot be correct because:
SRI sets up its own rubber plantation: Buyer secures its own supply
SRI's purchase amount makes significant proportion of supplier revenue: Suppliers are reliant on buyer. If the buyer stops buying from them, they can face serious cash flow problems Rubber from different suppliers is virtually similar: undifferentiated product would shift the power balance towards buyer.

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Personal power is only used in distributive approach. Is this statement true?

• A.Yes, because only distributive approach to negotiation requires strong personal power
• B.No, because personal power can be veryhelpful in integrative approach
• C.No, because only organisational power will optimise the negotiation outcomes
• D.Yes, because one party will abuse coercive power to maximise the gain

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