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Impact Of Negotiation In Attaining Purchasing Objectives
CHAPTER ONE -- [Total Page(s) 3]
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CHAPTER ONE
1.0 INTRODUCTION
The basic goals in any industrial
activity is the development and manufacture of products that can be
marketable at a profit. This goal is accomplished by the appropriate
blending of what many management authorities call the five mis-machines,
men, material, money and management. Materials today are the life blood
of industry, no industrial organization can operate without them. They
must be at the right time, in the right quantity at the right quality,
at the right price and at the right place. Whether in period of
inflation, or price stability or recession, obtaining materials at the
right place can literary mean the different between a firms success and
failure, hence the right price is prime importance to every
organization, profit or non-profit.
Professional buyers, interpret
the right price that is fair and reasonable to both the buyers and
sellers. Unfortunately no single set of pricing principles or criteria
exists for calculating precisely what constitute fair and reasonable.
Therefore to obtain the right prices, three basic methods can be used by
buyers, these are:
1. Published price list
2. Competitive buying
3. Negotiation
When a buyer is not satisfied with the price after using published price list and competitive bidding he resort to negotiation.
According
to Chambers 20th Century Dictionary, Negotiation means to counter the
purpose of mutual agreement. The Webster Dictionary defines it as
conferring discussion or bargaining to reach agreement in business
transaction. In industry negotiation is sometimes confused with
happening and rise selling. While in government it is frequently
visualized as a nefarious means of a competitive building of awarding
contract, surreptitious favour supplies.
According to Oyeoku (1993)
negotiation is just but a process whereby a representative of buying
organization and the selling organization attempt to reach precise
agreement on all terms and conditions which makes a contract come into
being. It involves a thorough analysis of all aspect of purchasing
rational discussion conferring and bargaining on each aspect and the
arrival at a common understanding of what is the best in the interest of
both side parties. In successful negation both sides win, the winning
are seldom equally divided. Invariably one side win more that the other,
this is how it should be in business “superior†business skill meant
superior reward. Negotiation is particularly useful though not always
fully successful in dealing with sellers who are sore source of supply
or with seller controlling multiple source that behave in a monopolistic
manner, in case where cost are not reliable determine in advance as in
most research contract and in any contract for items that had never been
made before, there is no source alternative in negotiation.
The
important of negotiation of purchasing is the it is a method used
especially were 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 compete, specification are not clear but vague,
the supplier is a monopolist, where all these situation exist or
prevail, the buyer has no alternative than to negotiate, hence
negotiation is practical technique arriving at a price to pay for goods
and services.
CHAPTER ONE -- [Total Page(s) 3]
Page 1 of 3
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ABSRACT - [ Total Page(s): 1 ]In this project, an attempt has been made to know the impact of negotiation in attaining purchasing practice. This research exposed the importance of negotiation in an organization and who and when a negotiation should be carried out. For an organization to function effectively and efficiently in this procurement, negotiation is very important to attain it. Without an effective negotiation an organization will not or cannot be able to carryout its buying activities effectively. In purchasing and ... Continue reading---
