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CIPS L4M5 Exam Questions
- Topic 1: Analyse the application of commercial negotiations in the work of procurement and supply/ Negotiation in relation to the stages of the sourcing process
- Topic 2: 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 3: Team management and the influence of stakeholdebest alternative to a negotiated agreement (BATNA)rs in negotiations/ Definitions of commercial negotiation
- Topic 4: Setting targets and creating a / Collaborative win-win integrative approaches to negotiations
- Topic 5: Differentiate between the types of approaches that can be pursued in commercial negotiations/ Distributive win-lose, distributive approaches to negotiation
- Topic 6: Organisational power: comparing the relative power of purchasers and suppliers/ Explain how the balance of power in commercial negotiations can affect outcomes
- Topic 7: How purchasers can improve leverage with suppliers/ The importance of power in commercial negotiations
- Topic 8: Building relationships based on reputation, and trust/ Repairing a relationship/ The relationship spectrum
- Topic 9: Identify the different types of relationships that impact on commercial negotiations/ Pragmatic and principled styles of negotiation
- Topic 10: Costing methods such as absorption, marginal or variable and activity-based costing/ Know how to prepare for negotiations with external organisations
- Topic 11: Macroeconomics and its influence on commercial negotiations/ Contrast the economic factors that impact on commercial negotiations
- Topic 12: Setting objectives and defining the variables for a commercial negotiation/ Use of telephone, teleconferencing or web-based meetings
- Topic 13: How behaviours should change during the different stages of a negotiation/ Compare the key communication skills that help achieve desired outcomes
- Topic 14: Analyse how to assess the process and outcomes of negotiations to inform future practice/ Protecting relationships after the negotiation
Free CIPS L4M5 Exam Actual Questions
Note: Premium Questions for L4M5 were last updated On Apr. 09, 2026 (see below)
Which of the following are tactics of distributive bargaining?
Withholding information that may open up common ground
Coercing the other party to accept your position
Finding common ground between parties
Being open about all your common needs
Distributive bargainingfocuses onmaximizing one's own gainat the expense of the other party. Common tactics includewithholding informationandcoercion. It is typically used in zero-sum negotiations where parties compete over a fixed value.
''Tactics in distributive bargaining include withholding key information, making extreme opening offers, and using pressure to achieve concessions. These are aimed at maximizing individual outcomes.''
(L4M5 Commercial Negotiation, 2nd edition, Section 3.5 - Tactics of Distributive Bargaining)
Which best describes features of the recovery phase in a business cycle? Select TWO.
In the recovery phase, economies move out of recession: consumer spending rises, demand grows, and prices begin to stabilise or increase. Confidence improves, investment starts picking up, and spare capacity is gradually absorbed. Low confidence and falling investment are features of recession, while full capacity is linked to boom phases. For negotiators, recovery phases may mean suppliers regain confidence to raise prices, requiring careful market analysis.
During a negotiation, Jose Gomez, the salesperson for a strategic supplier, states that his sales director will not approve discounts against initial purchases. However, Jose offers a 5% discount on the aftercare package, which will provide the same monetary saving. Sally Pampas requires both the product and the aftercare package and has an objective to achieve a 5% discount off the purchase price. To achieve a win-win (integrative) negotiation, Sally should...
To achieve a win-win (integrative) negotiation, Sally should accept the 5% discount on the aftercare package (B), as it meets her objective for a total discount while respecting the supplier'slimitations. This approach demonstrates flexibility and is in line with CIPS principles on integrative negotiations, where both parties achieve value in different forms.
In a detailed cost breakdown, a company has a salary cost of 9%, raw materials cost 51% and overheads cost 24%. Which of the following represents the mark-up of that company?
Mark-up is the amount added to the cost of an item to get to its selling price and is expressed as a percentage.
Mark-up (%) = (Price - Cost) / Cost x 100
= (100 - 9 - 51 - 24) / (9 +51 +24) x 100 = 16 / 84 x 100 = 19.04%
LO 2, AC 2.1
A building firm has been awarded a contract to build a new office block, and the
building firm needs to separate its direct and indirect costs.
Which one of the following is a direct cost to the building of the new office block?
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