During a negotiation, the supplier requests for payment term shortened to 45 days from 60 days. Seeing that this proposal lies within the concession plan, the procurement manager asks for 5% discount in return. Is that right thing to do?
A.
Yes, the procurement manager should keep that 5% for himself because that amount is a fair compensation for his effort
B.
No, it is unethical to exploit the weakness of the other party
C.
No, procurement should insist the payment term remains 60 days
D.
Yes, since procurement manager has his own cost savings target to achieve and he should make use of supplier's financial status
When preparing for a negotiation, negotiator should establish a list of tradeables and a concession plan. Good negotiators never give anything away that has not already been planned as part of the bargaining mix in the concession planning stage.
In the above scenario, the procurement manager has planned his own concession, so he can trade with supplier. The answer should be "Yes, since procurement manager has his own cost savings target to achieve and he should make use of supplier's financial status"
LO 2, AC 2.3
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