An Appraisal Of Effective Negotiation As A Tool For The Achievement Of Purchasing Objectives

An Appraisal Of Effective Negotiation As A Tool For The Achievement Of Purchasing Objectives
Abstract
The allocation of a contract for public construction projects would usually require a good negotiation. To strike deals that will benefit an organistation, there is need for a good negotiation skill by the procurement officers. This study intends to assess the effectiveness of negotiation as a tool for the achievement of purchasing objectives. This has to do with the size, the use of public means and the complexity of this type of projects. Questionnaires are designed to fit the objectives of this study and administered on procurement and project execution departments of 3 oil companies. Data obtained was analysed using percentages and frequencies. Two hypotheses were formulated and tested using the chi-square at a 0.5% level of significance. It is concluded that effective negotiation is a great tool for achieving purchasing objectives.
Chapter One
1.0 Introduction
1.1 Background of the Study
The basic goal of any organization or industrial activities is the development and manufacture of products that can be marketed and maximizes profit and make profit. This goal is accomplished by the appropriate blending of what many management authorities calls the for (5) m’s which are machine, man. Material, money and management, material organization. No industrial organization can operate without them; they must be available at the right time in the right quantity at the right price and at the right place.
Whether in period of inflation, or price stability or recessim, obtaining material at the right price can literally mean the difference between a firms, success and failure. Hence the right price is of importance to every organization, profit or non profit.
Therefore to obtain the right price, there are (3) three basic method which can be used by a buyer,
These are;
- Published price list
- Competitive bidding
- Negotiations
When the buyer is not satisfied with the price after using published price lists and competitive bidding, he resorts to negotiation. According to the chambers 20th Century Dictionary “NEGOTIATION” means to confer for purpose of mutual agreement the Webster dictionary defines it as conferring, discussing or bargaining to reach agreement in business transaction.
According to Oyeoku, (1993), negotiation is just but a process whereby representatives of the buying organization and selling organization attempt to reach precise agreement on all terms and conditions which make a contract come into being. It involves a thorough analysis of all aspects of purchasing in each aspect and the ritual as a common understanding of what is best in interest of both parties. In successful negotiation both sides win, the wining are, seldom equally divided. Invariably one side wins more than the other. This is as it should be in business.
The importance at negotiation to purchasing is that it is a method used especially where the time of purchasing of materials is too short, the money value involved is too low, the number of bidders is inadequate, they are not willing to complete specification are not clear but vague, the supplier is a monopolist where all these situation exist or pretrial, the buyer has no alternative than to negotiation. Hence, negotiation is a practical technique arriving at a price to pay for goods and services.
1.2 Statement of the Problem
On the other hand, material management is a total concept involving an organization structure, unifying into a single responsibilities of systematic flow and control of material from identification, the material functions of planning, scheduling, buying, storing, moving and distribution of material are met.
The objective is to contribute to increase profitability by coordinate achievement of least total material cost through common responsibility of this knowledge of materials and their uses. The co-ordination of these functions into a simple materials management department will no doubt result in the reduction of operating costs.
Mobil producing Nigeria unlimited (MPN) is the second largest oil producer in Nigeria. It started operation in the country in 1955 as Mobil exploration Nigeria incorporated. (MEIN) in December 1961 after unsuccessful exploration efforts in the former western and northern regimes, MEIN was granted two offshore oil prospecting license (opis) in the eastern region. In early 1964 MENI made its first discovering. The prospecting license where converted to four oil mining license in 1968 and by the end of that year a total of 50 exploratory wells and 15 appraises wells had been drilled.
On June 16, 1969, mobil producing Nigeria incorporated to take over and continue the business of MENI early in 1991. in compliance with the requirements of the new company’s and allied matters decree No. 19 of 1990 company’s name became Mobil producing Nigeria unlimited. (MPN) MPN began producing of crude oil on February 15 1970 in the offshore area of the eastern region.
In February, 2005 after 15 years of production, MPN hit ONE BILLION BARREL MAKE made the two billion barrel mark. In April 1990, MPN structure another land mark when along with its joint venture partner, the NNPC it signed was agreement for about 900 million us dollars with international lenders to develop and produce its OSO field condense reserves, estimated at about 500 million barrels.
The company’s overall contribution towards the country’s economic and social development has followed closely in the male of its production growth. It was in recognition that it won together with its parent and sister companies. Mobil Oil Corporation and Mobil Nigeria Plc. The 2005 Honor award of the Nigeria American Chamber of commerce, the honour award of the society of occupation health physicians of Nigeria (SOPHON).
1.3 Objective of the Study
- To evaluate the effect of negotiations on achieving purchasing objectives
- To find out the techniques necessary for effective negotiations in the work place
- To assess the influence of negotiation on purchasing
1.4 Research Hypotheses
Hypotheses One
- Ho: Negotiation has no influence on purchasing objectives
- Hi: Negotiation has an influence on purchasing objectives
Hypotheses Two
- Ho: There is no relationship between negotiation and satisfactory purchase
- Hi: There is a relationship between negotiation and satisfactory purchase
1.5 Significance of the Study
Findings from this work will be useful to procurement officers in both public and private firms in making serious purchase decisions in order to actualise the organisation’s objectives. It will equally be useful to individuals who will be embarking on very crucial projects that will require purchasing of an item or two to reach a desired goal. Also, the work will be useful to other researchers who intent to embark on similar projects.
1.6 Scope and Limitation of the Study
This study is primary concerned with an appraisal of effective negotiation as a tool for the achievement of purchasing objectives. This study was carried out inExon mobile. The researcher encountered some constraints, which limited the scope of the study. These constraints include but are not limited to the following
a) Availability of Research Material:
The research material available to the researcher is insufficient, thereby limiting the study
b) Time:
The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.
c) Access to Company Staff:
The research had some challenges accessing the staff to be interviewed as there was restricted access and heavy security within the premises.
1.7 Definition of Terms
Negotiation:
Is a dialogue between two or more people or parties intended to reach a beneficial outcome over one or more issues where a conflict exists with respect to at least one of these issues. Thus, negotiation is a process of combining divergent positions into a joint agreement under a decision rule of unanimity.
Achievement:
Something very good and difficult that you have succeeded in doing. It is the actualization of a set goal.
Purchasing Objective:
Ensuring that what you buy has high value for the company is a key purchasing function, buy what constitutes value depends on your strategic business goals. If you want to grow your business by offering low-cost goods, a matching purchasing management objective is to negotiate low supplier prices.
1.8 Organization of the Study
This research work is organized in five chapters, for easy understanding, as follows
- Chapter one is concerned with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study.
- Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature.
- Chapter three deals on the research design and methodology adopted in the study.
- Chapter four concentrate on the data collection and analysis and presentation of finding.
- Chapter five gives summary, conclusion, and recommendations made of the study
Chapter Five
Summary, Conclusion and Recommendation
5.1 Introduction
It is important to ascertain that the objective of this study was to ascertain a critical analysis of effective negotiation as a tool for the achievement of purchasing objectives.
In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations are made, which in the opinion of the researcher will be of benefit in addressing the challenges of non-achievement of purchasing objectives by organisations, due to poor negotiation.
5.2 Summary
This study aimed at having a critical analysis of effective negotiation as a tool for the achievement of purchasing objectives. Three objectives were raised. These objectives include: To evaluate the effect of negotiations on achieving purchasing objectives, to find out the techniques necessary for effective negotiations in the work place and to assess the influence of negotiation on purchasing
5.3 Conclusion
Based on the above findings pertaining to the objectives of the study the following conclusions are drawn.
Uniqueness of the buying firms’ specifications and supplier competition, in addition to effective negotiation has a great effect on determining whether a purchase is fulfilling, as in meeting the specified need of the firm or not.
Procurement staff must be highly skilled in negotiations to be able to meet the purchase needs of every organisation, since both the buyer and seller are out for value addition; the better negotiator gets the more value.
5.3 Recommendation
To achieve organisation’s purchasing objectives
- Procurement staff of every organisation should be trained in negotiations. Seminars should be organised to properly equip them for better negotiations and ultimately a better purchase.
- The procurement department must draft out the specific goals intended to be achieved by every purchase made by the organistaion. This will enhance matching the actualised result with the expected result.


The Complete Material Will Be Sent to You in Just 2 Steps
Quick & Simple…
![]()
Make Payment (Through Transfer) of ₦5,000 to the Account Below
![]() | Acc No: 0811003731 |
| Samphina Academy | |
| Current Account |
Or CLICK HERE To Pay With Debit Card
| FOR STUDENTS OUTSIDE NIGERIA | |
| CLICK HERE To Pay With Card ($15) | |
| FOR GHANA STUDENTS (GHS 100) | |
![]() | MTN MoMo |
| 0553978005 | |
| Douglas Osabutey | |
![]()
Send the Following Details on WhatsApp ( 07062590260 ) After Payment
- Payment Details
- TOPIC: An Appraisal Of Effective Negotiation As A Tool For The Achievement Of Purchasing Objectives
The Complete Material Will Be Sent To You On WhatsApp After Receiving Your Details
T & C Apply
Students Review
List of Related Works
Impact Of Effective Materials Handling In The Stores Function Of An Organization
The Role Of Store Function In The Public Sector (A Case Study Of Ministry Of Finance Owerri)
Need For Effective Health And Safety Practice In Stores Operations
Stocktaking And Stock Control As An Avenue To Organizational Growth
International Procurement And Its Justification (A Case Study Of Globa Soap And Detergent, Ilorin)
The Impact Of Material Sourcing In Enhancing The Organizational Profitability
Personnel Safety In Stores Operation In An Organization
Analysis Of Purchasing Contributions To Profitability
The Importance Of Quality Control And Inspection In A Manufacturing Industry
Application Of Purchasing Concept And It’s Implications On Organizational Objective Service Industry
Purchasing Of Banking And Financial Service
The Impact Of Effective Control In A Manufacturing Company (A Case Study Of Spring Bank Plc Owerri)
Role Of Purchasing Function And It’s Contribution To Profitability
Purchasing Function In The Procurement Of Capital Equipment
The Importance Of Accurate Stock Control In An Organization (A Case Study Of Nigeria Stock Exchange)
Appraisal Of Purchasing Research In A Manufacturing Company
The Impact Of Computer In Material Management (A Study Of Camela Vegetable Oil Company Owerri)
Impact Of Standardization In Material Management In A Manufacturing Industry
Evaluation Of The Application Of Negotiation Technique In The Public Sector Organization
The Importance Of Product Planning And Development (A Case Study Of PZ Industry Aba)
Appraisal Of The Role Of Purchasing Function In New Product Development
Need For Effective Inventory Control In A Service Organization
Purchasing Procedure In A Manufacturing Company (A Case Study Of Rokana Industry Nekede, Owerri)
Cost Control And Material Management
Impact Of Effective Warehouse Management On Physical Distribution In A Manufacturing Organization
Effect Of Motivation On The Productivity Of Worker
Assessment Of The Strategies Used In Bottling / Manufacturing Industry
Impact Of Total Quality Management On Customers’ Satisfaction And Bank Profitability
The Effect Of Lease As A Means Of Procurement In Manufacturing Organization
Use Of Raw Material Inspection And Its Impact On Quality Of Production
Impact Of Stores Function In Profitability Of An Organization
Role Of Stores Security In The Profitability Of An Organization
Assessment Of Physical Distribution Function The Brewery Industry
Important Of Stocktaking And Verification In Government Stores
The Impact Of Sourcing As A Supply Chain Function On The Profitability Of A Company
The Role Of Purchasing Research In A Manufacturing Company (A Case Study Of Rokana Industry Nekede)
Evaluation Of The Need For Quality Control And Inspection In An Organization
Make Or Buy Decision An Important Purchasing Tool And A Cost Control Technique In An Organization
The Relevance Of Stock Control In An Organization
Need For Efficient Physical Distribution In Marketing Of A Product
Procedures And Problems Of International Purchasing In Nigeria Economy
Inventory Policy As A Tool In The Attainment Of Organizational Goals
Impact Of Purchasing Research On The Profitability Of An Organization
Appraisal Of The Problems And Prospects Of Purchasing In Small Scale Business In Nigeria
Impact Of Containerization In International Purchasing


