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An Appraisal Of Effective Negotiation As A Tool For The Achievement Of Purchasing Objectives
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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.
One 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 these
knowledge of materials and their uses. The co-ordination of these
function 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, 1985 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 over all 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 1985 Honor award of the Nigeria American Chamber of commerce,
the honour award of the society of occupation health physicians of
Nigeria (SOPHON).
1.2STATEMENT OF PROBLEM
The detailed analysis of
contribution of negotiation to the profitability of an organization
with regards to its external and internal environment will include the
following problems.
i Lack of specialist in the field of purchasing
has reselected to the incompetence and inefficiency of the buying by the
buyer of designed item or material.
ii Multiple sourcing which acts as increased security sometimes becomes uneconomical.
iii
The imposition of high import duties on purchasing aboard and the need
to exploit alternative source of supply posed a lot of uncertainties to
the profession.
iv Another problem that is associated with this
study is buying out material which takes large percentage of the
organization revenue.
v Another problem is that purchasing as a
management function has been treated with neglect by management in an
organization companies and industries.
vi There is tendency of fever and often larger sources of supplier.
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