Purchasing Supply Research and Negotiations

Vocabulary practice flashcards covering purchasing and supply market research (Chapter 11) and negotiation principles, phases, and tactics (Chapter 12).

Market Research in Purchasing and Supply Management

The systematic gathering, classification and analysis of data, taking into consideration all relevant factors that influence the purchasing and supply of goods and services.

Macroeconomic Research

Supply market research that focuses on the general economic and business environment and factors that influence the future balance between supply and demand, such as inflation, labour costs, and employment figures.

Meso-economic Research

Supply market research focused on specific sectors of industry, examining sector profitability, technological developments, direct versus indirect costs, and capacity utilisation.

Microeconomic Research

Supply market research directed at evaluating the strengths, weaknesses, capabilities, and long-term market positions of individual suppliers, products, materials, or the purchasing organisation.

Broad-Based Black Economic Empowerment (BBBEE)

A South African regulatory framework and charter system that requires purchasing organisations to prioritise research into compliant local suppliers and preferential purchasing.

Specialist Research Division

A dedicated organisational structure for purchasing research staffed by specialists skilled in research methodology, forecasting techniques, and statistical and economic analysis.

Cross-Functional Research Team

A research organisation method in which a multidisciplinary team composed of members from different supply chain divisions collaborates to carry out purchasing research projects.

Follow-Up on Recommendations

A vital control mechanism in research management where researchers assist implementation staff in overcoming unforeseen obstacles and securing ongoing cooperation.

Negotiation

A strategic discussion between two or more people or groups who want to reach an agreement by sharing ideas, making trade-offs, and resolving differences to find a mutually workable solution.

Constructive Negotiation

Also known as integrative, collaborative, cooperative, or win–win negotiation; an approach where parties openly discuss risks, costs, and responsibilities to achieve a settlement of mutual benefit.

Competitive Negotiation

Also known as win–lose negotiation; an adversarial approach aimed at securing maximum short-term advantage for one party while treating the counterpart as an opponent and minimising one's own liabilities.

Post-Tender Negotiations

Discussions conducted with competing suppliers after quotations or tenders have been received, utilised when none of the initial bids is fully acceptable on its own.

Information Collection Phase

Phase 1 of the negotiation process, dedicated to gathering detailed background intelligence regarding market prices, supplier costs, manufacturing facilities, previous agreements, and economic conditions.

Preparatory Phase

Phase 2 of the negotiation process, in which collected data is interpreted to diagnose the situation, assess strengths and weaknesses, establish the power base, and assemble the negotiating team.

Power Base

The established ability of a negotiator or purchasing team to influence the direction and ultimate outcome of the negotiation proceedings.

Negotiation Planning Phase

Phase 3 of the negotiation process, focused on establishing realistic, attainable, and quantifiable targets formulated across a hierarchy of realistic, optimistic, and pessimistic levels.

Meeting Phase

Phase 4 of the negotiation process, comprising direct face-to-face interaction structured through fact-finding, strategic recesses, and constructive, non-coercive discussions.

Implementation Phase

Phase 5 of the negotiation process, aimed at ensuring agreed terms become reality through ongoing maintenance and the control of commitment, performance, and supplier relationships.

Negotiation Maintenance

The ongoing process within the implementation phase of keeping an agreement on track from inception to completion, resolving post-agreement operational hurdles or underperformance.

Split-the-Difference Approach

A negotiation concession tactic involving a 50/50 compromise when a party ceases to make concessions, often aligned with partnering or strategic alliance philosophies.

Recess

A deliberate temporary pause during face-to-face negotiations that allows a team to caucus, revise positions, reconsider strategy, or recover focus during a stalemate.