Negotiation A Vital Tool In Achieving Organization Objective

Project and Seminar Material for Purchasing and Supply PS

Negotiation A Vital Tool In Achieving Organization Objective


This research project work is designed to make an in-depth survey in the negotiation, a vital tool in achieving organizational objective. The important of negotiation as a key function in organizational objective can be emphasized by considering the reasonable price for specific quality o goods adopted through techniques.
This project work is divided into five chapters and each chapter generate the mechanism use to achieve the goal and objective of the project work.

Chapter One

1.0 Introduction

1.1 General Overview

For the survival of any organization, whether it is large or small the efficient management is human resource and materials resources which is the most vital factor it therefore, means the co-ordination of maximum contributions from each basic function of the organization.

Everyday of our lives, we enter into negotiation with another person or group of person since negotiation is a crucial element as well as the most interesting duty in the organizational chain management.

Also, in purchasing function, negotiation can not be avoided, this is because it is the decision making process of planning, reviewing and analyzing used by the buyer and seller to each acceptable agreement on all aspect of the business content. It is also the most delicates, it is delicate because it involves dealing with a seller whose intention is to make profit maximization.

Therefore, experience with buyer’s show that at least 20% of their time is take up by preparations for and the actual negotiations with suppliers. Knowledge of the negotiating skills are necessary for the buyer suppliers. Knowledge of the negotiating skills are necessary for the buyer to be able to offer resistance to the frequently well trained sales man in the procurement of materials, some level of trust exists between cost, the buyer and the seller especially when negotiating also bargains.

However, in negotiation, certain basic action should first be agreed, the buyer would decide the specification, sample and define the terms and conditions for the seller to consider. It would help also to agree at this stage, the extent of price justification provided, if the seller did not agree on the specification to meet the programme, then difference should be settled before form of price negotiation, otherwise there would be no basic for agreement. Price justification is usually an important part, the buyer use in the other hand has the opposite objectives, to hold seller’s profit through prices, to acceptable conditions or levels. In order words, if the purchase is capable of estimating accurately what the price ought to be, then the task is mainly to obtain the seller’s price in a form and supporting information, which facilitate comparison with buyer’s estimate and identification of difference which can be negotiated.

This is joint idea to problems may bring benefit by improving the terms of payment and promptly execute of contract.

1.2 Statement Of Problem

There are several problem that arises in the negotiation activities in the organization. This study will find out how the organizational objective through consolidated breweries Awamama in Imo State, Owerri can be made effective and made to contribute more meaningful to the main goals of the company.

Some of the general problems encountered by the consolidated breweries Awamama owerri can be stated as follows:

  1. When the organization employ unqualified buyer as purchasing officer, this will result to inefficiency in the negotiation process.
  2. When the purchasing officer did not get fair and reasonable price, the organization can not attain their objective, it will affect them in the cost of material.
  3. When the buyer of the organization did not negotiate properly to the supplier to get them on time of delivery and schedule. Inability to meet delivery schedules is the single greatest supplier failure encountered in purchasing operations.
  4. When the organization is lacking to get maximum co-operation from supplier this provide problem to the organization because working relationship and co-operation is not existing properly, to obtained additional future orders form the supplier can not be easy
  5. When the organization did not have control over suppliers performance. Deficiencies in supplier performance can seriously affect and some cases completely, disrupt the operations of the buyer company.

1.3 Objective Of The Study

This study is centered on negotiation a vital tool in achieving organisaitonal objectives in relevant to the above stated problems the purpose of this research work in consolidated Breweries Awamama Owerri will include:

  1. To show that adequate and well trained purchasing officer is employed which can be enable to carry negotiation activities effectively.
  2. To obtained or to get fair and reasonable price on period of negotiation
  3. To get the supplier deliver on schedule.
  4. To make sure that effective and efficient negotiation is carried out which enable them to obtain the best buyer which is the ultimate goal of the organizational objective.
  5. To develop a sound and continuing supplier relationship
  6. To keep adequate or maximum co-operation from supplier

1.4 Significance Of The Study

This research study will benefit the following groups:

A. Companies:

It will help the company to buy competitively in the market and as such it lead to more productivity profitability and high turn over.

B. Government:

Proper negotiation will help the government to bid properly and they will reduce the expenditure in other to have enough funds to take care of the sector of economy.

C. Education:

The scholars and students will through this study on negotiation, acquire knowledge on how to buy wisely and as such producing competent purchaser to the society.

D. Researcher:

As an individual through negotiation, one will be able to manager the affairs of life such as home management, since home management is all about negotiation properly in the market, in all aspect of buying.

1.5 Research Questions

These research questions are formulated to give prices direction to the research so that the desire objective of the research will be achieved.

  1. How does the company source for suppliers?
  2. How does the company attain the organizational objective?
  3. To what extent does the company apply negotiation?
  4. What kind of purchase does the company carry out?
  5. To what extent does management control the purchase of the company?

1.6 Research Of Hypothesis

Hypothesis One
  • Ho: Effective negotiation does not contributes to the attainment of organizational objectives.
  • Hi: Effective negotiation contribute to the attainment of organizational objectives
Hypothesis Two
  • Ho: The organization will not achieve their objective without proper negotiation
  • Hi: The organization will achieve their objective without proper negotiation

1.7 Scope Of The Study

This project work is undertaken to cover negotiation activities at consolidated breweries Awamama in Owerri, the area of emphasis include the adequate negotiation activities is carried out in the organization through getting the organizational objectives. It enable the organization to obtained the right quantity at the right time. And revealed their weak point on the negotiation activities. All these activities and the correction carried out relieve the organization to achieve profitability.

1.8 Limitation Of The Study

To every successful work, there is an encountering of difficulties which carry out this work, the researcher was controlled with a number of problems, which includes:

A. Time Constraint:

The time allocated to this work was too short and the researcher combines his lecture work with his study, the time showing therefore became very difficult.

B. Research Bases:

Most respondents knowing the aim of this research is to co-ordinate. The aim of this research is to co-ordinate, the researcher had to waste sometime persuading them to answer one question or the other answer where difficulty to get.

C. Difficulties:

In securing some of the vital documents containing some valid information relating to the subject matter of the research.

D. Financial Constraint:

This played a great deal in limiting the researcher’s strength. Due to the high cost of transportation, this prevents them not to gather enough sources of data.

1.9 Definition Of Terms

On the good speaking, it is important to state that words have different meaning and their meanings must be differ from each context or usage. It is for this reason that the researcher makes this attempt clearly define the meaning of some working terms used in this study.

These terms are as follow:

A. Expediting:

It is a follow up activity which ensures that the instructions which was giving to the supplier through purchasing manager in relation to delivery of goods and services have been carried out within the lead time.

B. Purchasing:

It is management process which is responsible for the identification anticipation and the provision of goods and services that are needed by the organization with the objective of increasing efficiency and productivity.

C. Forward Buying:

This kind of purchase is the practice of buying in excess or materials in a quantity exceeding current requirement.

D. Negotiation:

Is a process of discussing or bargaining to reach agreement in business transaction

E. Negotiator:

Is a skillful individual who has a broad business experience and possesses a good working knowledge of all primary function of business.

F. Vendor:

Refers to an outside supplier of raw materials, suppliers equipment or services needed in the operation of an organization

G. Hand To Mouth Purchase:

This is a system where the buyer purchases exactly what he needs for an immediate use example families

H. Store:

This is responsible for the physical control and maintenance of all inventory items. It ensures that appropriate physical safeguard is established to protest items from unnecessary obsolesced

I. Procurement:

Procurement includes duties performs by purchasing as well as an additional functions as materials. Supervisions and management, inspection and salvage operation and inventory control receiving.

Negotiation A Vital Tool In Achieving Organization Objective

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