Reference no: EM133171296

SITXMGT002 Establish and conduct business relationships

Assessment task 1: Knowledge Test

1. What is one point to remember when establishing and maintaining business relationships with people from different cultural backgrounds?
(a) You must treat every person the same.
(b) People from Asian cultures must be treated differently from those from Western cultures as they have completely different beliefs and traditions.
(c) In business, a person's cultural background is not important; getting the job done is all that matters.
(d) Avoid stereotyping those you are dealing with as everyone is an individual and should be treated as such.

2. What communication techniques can you use to help build trust and respect?
(a) Be professional, know your product, listen carefully and ask questions to show you are interested and want to understand.
(b) Speak loudly and emphatically if the other party does not understand you.
(c) Always use written forms of communication so that there is evidence of any problems encountered and decisions made.
(d) Use industry jargon and specialist terms when negotiating to give you an edge over your opponents.

3. You run a large restaurant and contact your linen supplier on a regular basis. Identify the next best initiative you could take to build the relationship further in this situation.
(a) Visit their workplace regularly.
(b) Send a newsletter once a month.
(c) Invite them to your restaurant for a familiarisation and a meal.
(d) Conduct a meeting once a month to discuss your business's needs.

4. How should you conduct negotiations?
(a) In a professional manner.
(b) With awareness of the cultural background of the other party and their needs.
(c) With knowledge of the organisational culture and how to adjust your style to suit their needs.
(d) All of these are good ways to conduct negotiations.

5. What should you be clear on before entering into negotiations and keep in mind during negotiations?
(a) The amount of profit you want to make from the deal.
(b) Your objectives, needs and limitations.
(c) The clothing you're going to wear and where exactly you'll sit at the negotiating table.
(d) The number of staff you need to employ if the negotiations are successful.

6. You're negotiating with a supplier to replace all the food and beverage service equipment in your bistro. What type of feedback or input from colleagues could help you in the negotiation process?
(a) Numbers of each item required to service current and forecasted customer bookings.
(b) Amount of current stock that's damaged or unusable.
(c) Details of patterns and designs that the food and beverage staff prefer.
(d) None of this feedback will help you in the negotiation process.

7. You have just completed negotiating the contract for the food and beverage service equipment. Who will you initially need to communicate the results of the negotiations to?
(a) Your customers.
(b) The food and beverage service staff.
(c) The food and beverage suppliers.
(d) The general manager, food and beverage manager and possibly the chef.

8. Which is the preferable way to confirm formal business agreements?
(a) In writing according to organisational requirements, using formal contracts where appropriate.
(b) By verbally agreeing and shaking the hand of the representative from the other party.
(c) In an email which requires the other party to click ‘I agree to the terms and conditions'.
(d) Write them down in formal minutes which outline who was present at the negotiations, what points were discussed and what actions need to be taken.

9. Who might you need approval from before the contract for the new food and beverage service equipment can be signed?
(a) The supplier.
(b) The service staff.
(c) The bottle shop manager.
(d) The accountant.

10. Who might provide specialist advice when developing a contract for the purchase of new service equipment?
(a) The business's lawyer.
(b) The supplier's representative you negotiated the agreement with.
(c) The manufacturer of the products you are purchasing.
(d) The general manager of your business.

11. What information should you proactively seek, review and act upon to maintain sound business relationships?
(a) Sales figures, accounts and future booking statistics.
(b) Commissions paid or received.
(c) Ordering and delivery systems.
(d) All of this information helps maintain sound business relationships.

12. How can you ensure you conduct business ethically?
(a) Stay in regular contact with your customers.
(b) Keep track of the other party's key performance indicators.
(c) Honour agreements within the scope of your responsibility and comply with agreed terms of contracts.
(d) All of these are ways to ensure you conduct business ethically.

13. What two types of KPIs should you take account of to foster and maintain business relationships?
(a) Internal KPIs and external KPIs.
(b) Internal KPIs and contractual KPIs.
(c) Delivery KPIs and account payment KPIs.
(d) You don't need to take account of KPIs to foster and maintain business relationships if you've done a good job of establishing the relationship in the first place.

14. One of your suppliers regularly delivers late, so isn't complying with the terms and conditions of your agreement. Their products are of high quality, so you'd like to continue doing business with them. What can you do to maintain the relationship while obtaining the products you need?
(a) Discuss the possible causes of the problems with the supplier, negotiate a solution and adjust the contract if necessary.
(b) Find another supplier of equal quality, negotiate a new contract with them and cancel the existing contract.
(c) Change your arrangements with the supplier, even though it means it will cause problems and you won't meet your targets.
(d) Communicate your unhappiness with the supplier and demand that they comply with the agreement or face legal action.

15. Why is it important to modify your style of communication to suit the person you're communicating with or the situation you're in?
(a) Communication is only effective if it can be understood by the other person, so some situations might require an interpreter.
(b) The situation dictates the style of communication as you may not have access to electronic or other methods of communication.

(c) Different people respond better to different styles of communication, and this can also vary depending on the formality of the situation.
(d) All of these are important reasons to modify your style of communication to suit various people and situations.

Assessment task 2:

Task 2A: Build Business Relationships

Q1: You're a senior sales representative of a tour operation. You're about to visit China to meet a travel agent to promote your holiday package. You don't know anything about China. Explain how you would go about establishing an ongoing professional relationship.

Q2: Business relationships happen in a commercial context and vary depending on industry structure and interrelationships. List two external customers you would form relationships with in each category.
Essential service suppliers

Hospitality suppliers

Communication suppliers

Distribution

Marketing

Q3: List six interpersonal and communication styles you can use to build trust and respect to nurture ongoing business relationships.

Q4: You need to plan activities and organise initiatives that support your professional relationships. Identify six ways you could maintain regular contact with suppliers and customers to communicate better and foster stronger business relationships.

Task 2B: Conduct Negotiations

Q5: List the four stages of negotiation.

Q6: You're the general manager of a five-star hotel in the inner city. You normally wear a suit and tie and conduct business quite formally. The chef and food and beverage manager have asked you to accompany them to a rural farm to negotiate with a produce supplier who can deliver fresher vegetables directly to the kitchen.

Do you need to change your approach in this situation? If not, explain why not. If so, explain why and describe how you might change.

Q7: Before entering into negotiations with the produce supplier in question 6, what are five things that your team should be clear on? Of these, which is the most important?

Q8: Your team has decided the roles each person will play in the negotiation with the supplier in question 6. Briefly describe what each person will do.
Chef (good guy)

Food and beverage manager (bad guy)

You (leader and sweeper)

Q9: You're the manager of a travel agency about to enter into negotiations with a resort which could be of significant commercial value to you both. You believe a long-term relationship would be in your best interests.
Which of these three negotiating styles is the best one to use? Describe the communication skills that go along with it.
Integrative approach
Distributive approach
Mixed approach

Q10: When negotiating, your aim is usually to maximise the benefits for all parties involved and establish long-term relationships. List six negotiating techniques you can apply in order to obtain a successful result for your travel agency and the resort in question 9.

Q11: You're an operator of a small restaurant that you currently lease. You'd like to make minor renovations to the premises. You're about to negotiate with the real estate agent who's infamous for being difficult to deal with. State five ploys the agent might use against you.

Q12: The real estate agent in question 11 keeps you waiting for nearly an hour and then keeps taking phone calls during your negotiations. Describe how you would respond.

Q13: Identify three signs that show the other party is ready to close negotiations.

Q14: List three types of input you can get from colleagues prior to and during negotiations to incorporate into talks.

Q15: List six appropriate colleagues and stakeholders you might need to communicate results of negotiations to.

Q16: It's important to evaluate commercial data and cost structures prior to negotiation. List four common financial matters to consider before undertaking a negotiation.

Task 2C: Make formal business agreements

Q17: Why are contracts entered into?

Q18: What exactly is a contract and how do you enter into one?

Q19: What happens if one party doesn't meet their contractual obligations?

Q20: Explain when you might need to draw up a contract.

Q21: List five external customers you might enter into contracts with.

Q22: Identify three types of contracts you might enter into.

Q23: Look at the definitions of the key elements you should include in any contract you develop. Label each one.

Both parties understand they're creating legal relations, and are going to abide by the contract which is legally enforceable.

One party makes an offer and the other accepts it.

One party gives something (usually money) in exchange for something from the other party (usually a product or service).

Both parties are mentally capable of understanding a contract.

Both parties agree to the contract of their own free will.

All parts of the contract are legal.

Q24: Prior to developing or participating in the development of a formal commercial agreement, you should consult legislation. What two documents contain legal requirements that impact negotiations and agreements, including contracts and consumer protection?

Q25: You need to understand the key components of contract law at a basic level to develop a legally binding contract. Define the following terms. Terms and conditions

Exclusion clause

Dispute resolution clause

Q26: List and describe three ways contracts can be terminated.

Q27: Identify five people or groups who may need to approve all aspects of the formal agreement.

Q28: Which procedures should you follow when obtaining approval for formal agreements?

Q29: When developing a business contract, under what circumstances would you need to consult a specialist for advice?

Q30: You've just received a contract from your linen supplier but you're not sure it's legally binding. What would you do?

Task 2D: Foster and maintain business relationships
Q31: What professional networks can you use to foster and maintain business relationships?

Q32: What type of information is useful to help you maintain sound business relationships?

Q33: How can you act ethically and responsibly to foster and maintain business relationships?

Q34: Define key performance indicators (KPIs).

Q35: List four contractual KPIs you may be expected to meet to honour agreements and comply with agreed terms.

Q36: Explain why you might adjust an agreement.

Q37: Describe how to make adjustments to agreements.

Q38: Who do you consult and share information with when making adjustments?

Assessment task 3: Case Study 1

Required documents and equipment:
• Simulated Business Environment Hotel Complex and access to all the documents defined in Appendix 1 at the back of this tool (Assessor must ensure all the documents are available)
• Current commercial policies, procedures and template documents use support the negotiation process:
- preparatory facts and statistics
- key performance indicators
- market information

Case study
You are the purchasing manager for Angad Institutehotel complex. The hotel has a number of outlets.

An upmarket bistro seating 200 and open Tuesday to Sunday (Friday and Saturday nights average 300 covers, Sunday lunch and dinner usually average 150 to 200 covers).
A public sports bar for up to 250 patrons.
An informal lounge bar with seating for 60.
A two-lane drive-through bottle shop.
A gaming room with 70 poker machines.
A small coffee shop seating 20, attached to the gaming room.

All stock required for the outlets must be requisitioned through your department. You're responsible for dealing with suppliers, placing orders, receiving deliveries, storing and distributing stock, contacting maintenance and repair specialists as required, and managing the cleaning contractor.

You have the authority to negotiate contracts with suppliers to the value of $150,000 per annum on your own. Above this amount, the assistant manager must negotiate with the general manager to obtain final approval for all contracts.

The hotel's owners have received approval to extend a section of the bistro into an outdoor garden dining area which will seat an extra 100 guests. They're demolishing a wall and replacing it with large glass panels and doors. The outdoor area requires appropriate furniture, umbrellas, awnings, and additional cutlery, crockery, glassware and service equipment.

They're building a small bar in one corner of the garden area for use during busy periods or to service the area if it's booked for a private function. They're covering one-third of the area closest to the doorways leading from the internal bistro area with a permanent roof. For the cooler months, they're considering either attaching outdoor gas heaters to the roof area or purchasing freestanding heaters.
The renovations will take three months. An opening date has been set for the first Thursday in December. Promotion of the new area commences in one month. Customers can make bookings six weeks prior to opening. It has been forecasted that the new seating area will lead to a 40 per cent increase in business in the bistro over the summer months.

You've been given the job of sourcing all furniture, large and small equipment, and food and beverage service equipment required for the new dining area. You may decide to use current suppliers or locate new sources. Price and the ability to supply the products and services within required timeframes will be important considerations. Any contracts for equipment must include delivery and installation deadlines.

The bistro in its current format has been open for seven years. The food and beverage manager has indicated that the current service equipment (especially the crockery) is showing stains and signs of long-term use. Management will consider investing in new crockery and possibly cutlery for the whole bistro if the price is within budgeted range. Otherwise, amounts required to increase current supplies will be purchased. However, it must match or be similar to the current service equipment.

Choose two of the following areas, products or services to focus on for the purpose of your negotiations.

• Service equipment: glassware, cutlery, crockery, etc.
• Furniture: tables, chairs, service stations
• Large or small bar equipment for the external bar
• Décor: umbrellas, shade awnings, table centrepieces, decorative pots, water features or other decorative items
• Outdoor heating systems
• Linen
• Garden supplies and/or ongoing maintenance

Q1: What two areas have you chosen to use as the basis for your negotiations?

Q2: What information must you research before you make initial enquiries with potential suppliers?

Q3: Once you've contacted suppliers to negotiate with, research the people and the organisation. Describe the results of your research and the cultural factors you'll need to consider during negotiations with the two different suppliers.

Q4: List and prioritise your objectives, negotiable and non-negotiable requirements and BATNA (best alternative to a negotiated agreement).

Q5: What concessions (if any) are you prepared to make during negotiations to achieve your objectives?

Q6: Decide what roles team members will play during the negotiations.

Q7: List the internal and external issues that could affect this business negotiation as well as any challenges you foresee occurring during the negotiation process. Describe how you would deal with each one.

Q8: Who will you communicate the results of negotiations to?

Q9: In Assessment 3 you are required to role-play negotiations with the two suppliers you have researched. Write a meeting agenda for the negotiations in the space provided.
Agenda for Supplier 1 negotiations

Assessment task 4: Role play

Required documents and equipment:
• Simulated Business Environment Hotel Complex and access to all the documents defined in Appendix 1 at the back of this tool (Assessor must ensure all the documents are available)
• Appendix 2 and Appendix 3 (Detailed role play script)
• Learner's agenda from Assessment 2, Question 9 - Supplier 1.
• Roleplay instructions from your assessor

This assessment requires you to undertake a series of role-plays to demonstrate your ability to negotiate with suppliers from Assessment 3

You are required to do the following.

• Role-plays are to be conducted in an actual or simulated workplace environment.
• All participants must be briefed on their roles and the desired outcomes of the role-play prior to commencing the activity.
• Role-plays can be recorded for further analysis and discussion with the consent of all participants.
• Assessment 3 must be completed prior to undertaking this assessment task.
• Complete the two role-plays.

Role-play 1
The following resources are required to complete the role-play.
Learner's agenda from Assessment 3, Question 9 - Supplier 1.
Roleplay instructions from your assessor.

Learner instructions
During the role-play, you are required to demonstrate the following skills and knowledge.
- Establish relationships and open negotiations within organisational protocols using effective communication skills and techniques.
- Build trust and respect in business relationships through use of effective communication skills and techniques.
- Conduct negotiations in a professional manner to maximise benefits of both parties.
- Incorporate feedback and input from colleagues into negotiations where appropriate.
- Demonstrate the communication skills necessary to conduct and close negotiations that may be of significant commercial value.
- Incorporate knowledge of principles of negotiation.
- Demonstrate understanding of stages in the negotiation process.
- Conduct the role-play.

Role-play 2
The following resources are required to complete the role-play.
Learner's agenda from Assessment 3, Question 9 - Supplier 2.
Roleplay instructions from your assessor.

Learner instructions
- During the role-play, you are required to demonstrate the following skills and knowledge.
- Establish relationships and open negotiations within organisational protocols using effective communication skills and techniques.
- Build trust and respect in business relationships through use of effective communication skills and techniques.
- Conduct negotiations in a professional manner to maximise benefits of both parties.
- Incorporate feedback and input from colleagues into negotiations where appropriate.
- Demonstrate the communication skills necessary to conduct and close negotiations that may be of significant commercial value.
- Incorporate knowledge of principles of negotiation.
- Demonstrate understanding of stages in the negotiation process.
- Conduct the role-play.

Assessment task 5: Case Study 2

Required documents and equipment:
• Simulated Business Environment Hotel Complex and access to all the documents defined in Appendix 1&2 at the back of this tool (Assessor must ensure all the documents are available)
• Assessment references and work from Research and negotiation in Assessment task 2 and 3
• Appendix 4 (Agreement Contract template)
• Current commercial policies, procedures and template documents use support the negotiation process:
- preparatory facts and statistics
- key performance indicators
- market information

Task 5A
- Refer to the research you conducted in Assessment 2 and the negotiations you conducted in Assessment 3
- Prepare two written contracts - one for each supplier/contractor. (Appendix 4)
- Ensure the contract includes the key elements, components and inclusions to ensure it is legally binding.
- Ensure you follow legal requirements that impact agreements in your sector, including consumer protection where applicable.
- Decide whether you need any specialist advice to help you develop the contract. If you do, seek advice as required.
- Submit the two completed contracts to your assessor.

Task 5B
Respond to all questions.

Q1: According to organisational procedures provided in the case study in Assessment 3 who would you get to approve the contracts?

Q2: What information would you seek, review and act upon to maintain a sound business relationship with both suppliers.

Q3: Describe how you would comply with agreed terms in the contracts.

Q4: What KPIs would you take into account to check whether both parties are keeping up their ends of the bargain?

Q5: In what circumstances might you need to adjust an agreement?

Q6: If you had to adjust an agreement, who would you need to consult and share information with?

Q7: Describe how you plan to maintain regular contact with the suppliers.

Attachment:- Establish and conduct business relationships.rar