EFFECT OF NEGOTIATION ON ORGANIZATIONAL PROFITABILITY (A STUDY OF YINKA OBA FOAM NIGERIA LTD ILESA, OSUN STATE)

CHAPTER TWO LITERATURE REVIEW 2.1 Definitions Maiese (2020) defines negotiation as a discussion between two or more disputants who are trying to work out a solution to their problem. In the recent definition of negotiation the researcher have emphasized that negotiation process of interaction. Nevertheless, Weingart and Olekalns (2022) point out that the negotiation process has not been prioritized in the negotiation research. It is notable that researchers’ individual perspectives in contexts of negotiation research shape their definitions accordingly. Therefore, for example, there are differences in dispute resolution scholars’ definition compared to communication scholars’ definitions, which emphasize different aspect and take slightly different perspectives. The success of business relationships depends on effective business negotiations. Negotiators need to be well prepared. Understanding how to achieve business negotiation outcomes and the factors relevant to the process will allow negotiators to be more successful. Negotiation is regarded by some as the most important feature in the buyer’s toolbox. It is often through negotiation that buyers achieve their objectives in the areas of quality, price and delivery. The more effective buyers are in negotiation, the better their performances will be in obtaining the best possible buy. Negotiation is defined in the Oxford English Dictionary as “discussion with another view to compromise”. This suggests obtaining a mutually acceptable outcome and is therefore different from “horse trading” or “haggling as it involves a more orderly and a logically developed pattern of discussion. Negotiation is any activity that influences another person. The aim of contract negotiation is firstly to achieve certainty, to record what is being supplied, when, in what quantities and to what standard, and what the consequences of delay or failure to meet the agreed requirements are. Many a dispute is caused by the failure of the parties to define at the beginning of their relationship exactly what is going to happen; one example in my experience was the failure of a major IT agreement because the parties both thought that their man was project managing the project, in fact the issue had never been agreed. This is especially important in the case of complex projects, where project plans and methodologies will normally be prepared as part of the contractual documentation (Palmer, 2021). Klinger and Burnett (2019) also outline one objective of negotiation as “The goal of every negotiation must be to achieve a result which, even if it falls short of the original objective, can be considered a satisfactory advancement towards it. Compromise is an essential feature of most successful negotiations: each party needs to walk away afterwards feeling that he or she has gained." To this end, negotiation generally formulates precise objectives to promote its competitive advantage. Some of these precise objectives are as follows; • To obtain fair and reasonable price and lowest cost of ownership. • To get the supplier to perform the contract on time (delivery). • To exercise some amount of control over the manner in which the contract is performed. • To persuade the supplier to give maximum co-operation to the buying firm. • To develop a sound and continual relationship with competent suppliers (partnership or co-makership). Knowing the overall objectives of the negotiation is essential because this will help you decide the most appropriate strategy or approach to be used for the negotiation. Without broad goals or clarity of desired outcome of the purchase, it is very difficult to control the negotiation. Once a strategy is clearly defined, it is possible to decide on consistent objective for the negotiation and to develop a negotiation plan. Negotiations have been likened to a game of ‘Blind Man’s Buff’ where both parties are trying to achieve objectives with little information on the practices, mindsets or objectives of the other party. This means that negotiations are very complex and can be chaotic and require a range of different approaches. We often learn about negotiation from models, many of which are overly simple, and so are unhelpful to practitioners. At this point, we will consider the cycle of negotiation we can see the range of activities requiring considerable attention and competence from the buyer/negotiator. According to Trybus, (2022) Negotiation is defined as any form of verbal communication in which the participants seek to exploit the relative strengths of their bargaining position to achieve explicit or implicit objectives within the overall purpose of seeking to resolve the identified areas of disagreement. Continuous to highlight the fact that, negotiation has proved to be one of the most effective means of avoiding unnecessary cost in business transaction to the following objectives; • To develop a sound and continuing relationship with competent suppliers. • It aims at obtaining a friar on reasonable price for quality specification. • To persuade a supplier to give maximum co-operation to the buyers company • To create a long- term partnership with a highly qualified supplier. • To get the suppliers to perform the contract on time. According to Loffler, (2020) define negotiation as an application where there is disagreement or potential disagreement between supplier and buyer. A good buyer will be sensitive to potential areas of conflict and will seek to resolve these before they arise by ensuring that terms and conditions applicable to the purchase provide for such contingencies. Baily, (2022) defines negotiation as a process whereby agreement is sought, they also highlight the phases of negotiation are yet to be treated. According to Dobler (2020). Negotiation is defined as conferring, discussion or bargaining to reach an agreement in a business transaction. In this contest negotiation could be seen as a process of planning, receiving and analysis used by a buyer and a supplier to reach acceptable agreements or compromises. In the above definitions therefore, we realized the word agreement cut across because in every negotiation or an effective negotiation, there must be an agreement. A buyer of an organization who negotiate well stands the chance of improving his company’s profit in that, he or she will get the goods at an affordable price and as well from the right first class and will make the public sector organizations gain good negotiation,(Van Weele, 2019). Nonetheless, procurement staffs are representatives of their organization’s in its dealings with suppliers, and as such there is the need to portray a good image first of themselves and that of their organizations. They are the eye’, “windows’’, or “package ’’of the organization. However, it is important to emphasize the point that the, general objective of procurement is to achieve right quality, from the right place, at the right quantity, at the right time, and at the right price. This can only be realizing through a good negotiation. Good negotiation conduct in dealing with suppliers is essential to the creation of price (i.e. how much an organization must pay for any bought out item).This is the most essential element in the cost reduction process. Nonetheless, the interface communication between the negotiation teams, reduce the levels of contract disputes to workable limit. Since, the responsibilities of both parties will be spelt out during the negotiation process. Hence, cost of legal battle will be save as a means of value adding. Negotiation also helps organizations to deal with vague technical specifications and ambiguities in specifications and deliverables expected of the contract as anything agreed upon by the parties will be stated in the memorandum of understanding during the negotiation. It goes a long way to help corporate organization’s to avoid misunderstanding and confusing in contract agreements. This is the surest way of saving cost. Lenders (2021) went an extra mile and said that; negotiations are expensive and time consuming and thus not all procurements are negotiated. Negotiations are only used in special instances, such as; when buying materials from monopoly supplier, buying highly technical and complex materials, buying material critical to organization operations, buying high value requirements, or even when contemplating to engage a new supplier on long-term supply contracts. Negotiation is conceptually a three-phase process where the first of the three phases is the preparatory stage, where information analysis is done, the objectives set and strategies developed. The meeting phase is concerned with the process of discussion, further information collecting and analysis, and with the reaching of agreement between the parties. The final stage involves the implementation of the agreement within and between the organizations represented in the previous phase. The process of negotiation may involve one or several meetings. The preparation stage may require consideration of phased objectives, for instance it may be that the first meeting between the parties will be concerned solely with exploratory discussions: both sides may need to clarify the issues of negotiation and there will always be need to obtain more information. A subsequent meeting (or meetings) might be concerned with discussions leading towards the desired agreement. In some cases, agreement may be reached in one meeting; in others, the situation might necessitate further meetings to conclude the agreement. (David 2019). Rogerfisher and William Ury (2019) described four principles for effective negotiation. They also described three common less to negotiation and discussed ways to overcome those obstacles. They explained that a good agreement is one which is wise and efficient, and which improves the parties’ relationship. Wise agreements satisfy the parties’ interests and are fair and lasting. Negotiations often take the form of position bargaining where each party opens with their position on their issue. The parties then bargain from their separate open positions to agree on one position. Negotiations can take different styles like aggressive, assertive or submissive, or may be dominated by a manipulative as opposed to an assertive phased approach. During negotiation, body language has to be studied. One can’t say definitely which is the best way to negotiate or which is the best style, much will depends on existing relationship and objectives. It however, argued by experienced negotiator that a purely short-term manipulative approach to negotiations based on I win you lose leads to long term problems. These days, particularly with the view of long-term negotiation objectives, one finds a move towards more of a win-din approach based on trading wants and using a phase approach to reach a settlement more satisfactory. In Nigeria in accordance to the Public Procurement and Disposal Act (2019), Public Procurement and Disposal Regulations (2021), which regulate the public sector procurement; a procuring entity only enters into negotiation pursuant to section 84 of the Act once the tender committee has approved the successful project. Negotiations are conducted by at least two members of staff of the procuring entity appointed by Accounting officer or the head of the procuring entity on the recommendation of the procurement unit. The members of staff conducting the negotiations prepare a report of the negotiations and submit it to the tender committee for decision-making. The report prepared forms part of the procurement records. Public Procurement and Disposal Act (2019), Public Procurement and Disposal Regulations (2019), which regulate the public sector procurement; a procuring entity only enters into negotiation pursuant to section 84 of the Act once the tender committee has approved the successful project. Negotiations are conducted by at least two members of staff of the procuring entity appointed by Accounting officer or the head of the procuring entity on the recommendation of the procurement unit. The members of staff conducting the negotiations prepare a report of the negotiations and submit it to the tender committee for decision-making. The report prepared forms part of the procurement records. The process of negotiation and the approaches used is a decision made by the organization and it is dependent on the nature of the purchases. Not all procurements are negotiable, what and when to negotiate is a dire area of concern. The place to stage or hold procurement negotiations is a decision imperative due to its implications to the results of the negotiation. The person to choose the venue is also a million dollar question that needs indefatigable answers in particulars. This research explores the possibilities and strategies surrounding this crucial decision. It is apparent that there exists a gap as it regards the negotiation-holding venue in procurement. This research attempts to bridge this gap by investigating the preference to the place of negotiations. Objectives of Negotiation The aim of contract negotiation is firstly to achieve certainty, to record what is being supplied, when in the quantities and to what standard, and what the consequences of delay or failure to meet the agreed requirements are. Many a dispute is caused by the failure of the parties of define at the beginning of their relationship exactly what is going to happen; one example in may experience was the failure of a major IT agreement because the parties both thought that their main was project managing the project, in fact the issue had never been agreed. This is especially important in the case of complex projects, where project plans and methodologies will normally be prepared as part of the contractual documentation (Palmer, 2021). Achievement of an organization’s objectives Klinger and Burnett (2019) also outline one objective of negotiation as “The goal of every negotiation must be to achieve a result which, even if it falls short of the original objective, can be considered a satisfactory advancement towards it. Compromise is an essential feature of most successful negotiations: each party needs to walk away afterwards feeling that he or she has gained.” To this end, negotiation generally formulates precise objectives to promote its competitive advantage. Some of these precise objectives are as follows; • To obtain fair and reasonable price and lowest cost of ownership. • To get the supplier to perform the contract on time (delivery). • To exercise some amount of control over the manner in which the contract is performed. • To persuade the supplier to give maximum co-operation to the buying firm. • To develop a sound and continual relationship with competent suppliers (partnership or co-maker ship). Knowing the overall objectives of the negotiation is essential because this will help you decide the most appropriate strategy or approach to be used for the negotiation. Without broad goals or clarity of desired outcome of the purchase, it is very difficult to control the negotiation. Once a strategy is clearly defined, it is possible to decide on consistent objective for the negotiation and to develop a negotiation plan. Negotiation Processes Klinger and Burnett (2019) Effective negotiation process through the following scientific steps: Formulation Strategy:- The buyers must know the issue at stake, what is to be negotiated and state his goals in terms of all the objectives of purchasing (source, price, delivery time, quality, quantity or capital). The term must prepare an assessment of what it thinks are the negotiation goals, position and counter agreements of the other party. On the basis of the information gathered, the term then formulates strategies. As a part of strategy, the team formulates its own party and the other parties BATNA (Best Alternative to a Negotiation Agreement) the lowest value acceptable to any party. Any price the buyer receives that is higher than its terms BATNA is better than an impasse. If buyer is unable to meet suppliers BATNA, he must persuade supplier to change it, support it with evidence and adjust it based on agreed factors. Exchange Initial Proposal:- The buyer in conjunction with the supplier than define ground rulers and procedures over negotiation, the negotiation term, venue of negotiation, duration of negotiation (time constraint), issues to limit negotiation to, specific procedures to be followed if a stalemate is reached etc. Proposals on all these are agreed to, committed to writing, signed and exchanged. Negotiation Proper:- This is the actual stage of play where give and take occurs in agreements. The actual stage consists of preliminary opening, diagnosis and closing. Both parties make concessions based on initial proposals. This requires explanations, amplifications, clarifications, elucidations, appreciation and justification of one’s original demands. It is an opportunity for educating and convincing one another on the issues that constitute the center-price of negotiation. This is the stage where evidence or documents are providing to support once positions. It needs not be confrontational. It is important for the parties to begin with positive overtures, address problems and not personalities, pay little attention to initial offers, emphasize win-win solutions and create an open and trusting climate. Buyers must avoid biases that may hinder effective negotiations. This includes: • Irrational escalation of points beyond relational analysis which may leads to waste of time, energy and money. • Contemplating a mythical fixed pie, that is a zero-sum game (win-lose-situation). Win-win solution is better e.g. if the buyers must gain more in quality, then the supplier must gain more in money-income. • Avoid the tendency to anchor judgments on irrelevant information such as the initial offer, do not allow initial offer to weight you down. Negotiation initial prices downwards. • Do not be affected by the way information is presented to you consider the two sides of any information or offer. Do not be affected by sentiments, harassments, embarrassments and insults. • Buyers must avoid over confidence. This often leads to poor preparations, inaccurate information gathering, incorrect assessment of the other party’s strength etc. Closure and implementation:- Negotiation brought to an end by formalizing the agreement entered into by both parties. When signed by the buyer, it shows that the supplier has been selected to execute the order note that may be accepted by the vendor to effect execution and enforce legality. Follow up:- Lamar (2022) opined that the buyer’s organization must monitor the implementation of the contract of the capacity production to make sure that what is being produced conforms to what was agreed to originally or to amendment clauses or notes. Direct negotiation takes place between the teams from buyers or suppliers organization. However, when an organization lacks competent personnel to do this, they may hire outside consultants to negotiate on their behalf. Such outsiders have communication skill that can facilitate creative problem solving on purchasing and supply or conflicts matters. Negotiation strategy may be any of distributive or integrative. Distributive strategy is concern whit sharing a fixed pie in certain proportions. Each party has a target point as well as a resistant point. The range between these two points is called ones aspiration range. Resources here are divided on the basis of win-lose situation. The exchange is purely transactional and both the supplier and buyer complete over issues of price, quality, capacity (quantity), and time of delivery. This is a competitive strategy in which one party tries to outwit the order. Integrative strategy is one in which both parties seek win-win solution or settlements. The exchange is purely transformational and both the buyer and the vendor cooperate on the issues that constitute the center price of negotiation. The emphasis is on cooperation, integration of one another, suppliers development and other related social networks. Unlike the shareable fixed resource of the strategy, the shareable resources here are variables, the focus of the relationship is long-term rather than short-term, the primary interests of the parties are convergence or congruence with each other rather than opposition and primary objective is I win; you win rather than I win you lose. Negotiation as a Price Determinant According to Leenders (2021), determination of the price to be paid is majorly a supply decision. The ability to get a good price is sometimes held to be the prime test of a good buyer. If by good prices meant the greatest value, broadly defined, this is true. The purchaser must be alert to different pricing methods, know which is appropriate and use skill in arriving at the price to be paid. There is no reason to apologize for emphasizing price or for giving it a place of importance among the factors to be considered. The purchaser rightly is expected to get the best value possible for the organization whose funds are spent. While competitive bidding can be used for some purchases, purchasing in the commodity market requires a much different approach and buyer skill set. With respect to quantity and delivery considerations, the most telling evidence comes from inventory reduction and shortened lead times. Both can be accomplished by increasing frequency of deliveries while decreasing the amount delivered at one time. Accompanying efforts in setup time reduction, JIT systems, vendor managed inventory systems, order cost reductions, EDI and E-commerce are all part of the same drive. The decision of how much to acquire and when logically follow clarification of what is required Leenders (2021). Overview of Negotiation Approach Win-Lose Approach Before even starting out, the negotiators should work out his Best Alternative to a negotiated agreement (BATNA). BATNA was created by Ury and Fisher (2019). When people work out their best alternative in a negotiation they are calculating their walk-away position (mills, 2019). For a negotiator to know his BATNA gives him a sense of clarity in any negotiation. But the clarity comes only from having a realistic and balanced view of alternatives (Lyons, 2019). Lyons gives an excellent advice not to go into the negotiation thinking ‘I’ll see what the other party offers and then think about my alternatives’ Armed with a string BATNA, a person can negotiate with confidence and power. A BATNA involves three stages: First, a negotiator should list everything he could do if he does not reach agreement. Second, he should explore his best options and try to improve on them. Finally, he should choose the best option. That is his BATNA. Some authors describe negotiation as a zero-sum transaction which means that one gains only from another’s equivalent loss. In a zero-sum game, there is only one winner but there can be many losers. Actually, a negotiation will end in one of four possible outcomes: lose-lose, win-lose, win-win, or no outcome. In no outcome, there are no consequences negative or positive. Win-Lose or Lose-Win situation is also called as a zero-sum game. A good example of a zero-sum situation would be a chess game. In chess, there is one winner and one loser. Adding one positive to one negative the result is zero. The feeling of the loser is not pleasant because he has to walk away without having met his wants or needs (Stark, 2020). Usually win-lose situations results in the loser not willing to negotiate with the winner in the future Lose-lose Approach Some people cannot stand the reality of losing a negotiation. They spend so much time and energy to make the one who won earlier to bleed but it usually leads to a lose-lose situation. In lose-lose situations neither party achieves their needs or wants. Strak (2020) gives a common example of a lose-lose negotiation which is a labour strike in which a management and labour unions cannot come to a satisfactory agreement. Almost always in a labour strike everybody loses. The employees lose, the company loses and the most tragically, the customer loses. In a lose-lose negotiation it is unlikely that either counterpart would come back to a negotiating table with the same counterpart in the future. Win-Win Approaches Getting what the negotiator wanted after a negotiation does not mean that he won and the other participation lost. There is a possibility of a win-win situation where both parties win which is the ideal outcome for almost all negotiations. Good negotiators find a balance between each party’s objectives to create a win-win outcome (Black 2019). 2.2 Conceptual Framework Source: Gahan (2022) Strategic Purchasing Any organization requires sustainable materials or part supply to serve its customers demand. It is, therefore, a compulsory for the organization to make sure how the raw material supply is sustainable. Carr & Pearson (2022) introduced a concept of strategic purchasing which is defined as a process of planning, evaluating, implementing and controlling the sourcing decision. Strategic purchasing is the matter of how to obtain materials or part in fulfilling their customer demand. Another finding by Carr & Pearson (2022) showed that strategic purchasing has a positive impact on organization performance. Paulraj, Chen, & Flynn (2021) classified the strategic purchasing into three component, i.e. strategic focus, strategic involvement as well as the presence of purchasing professional within an organization. Strategic purchasing does not look at only long-term plan referring to the company's strategy, but also involve important management. Strategic. Purchasing has a significant role in the supply chain management. It contributes to the success of a company as well as the improvement of the company's profitability and shareholders value (Oberoi & Khamba, 2019). In ideal form, strategic purchasing integrated separate internal and external functions in enhancing efficiency, effectiveness, and responsiveness of an organization (Figuera, Robinson, & Jakubowski, 2019). On this study, strategic purchasing is assessed using four indicators, i.e., long-term plans directionally, engagement in strategic planning, competency development training, and support of top management to purchasing function. Buyer-Supplier Relationship Ramakrishnan, (2019) said that the relationship between supplier and buyer would provide benefits within the company and environmental friendly products. Damlin, (2022) said the strategic level would help in achieving long-term goals and profit for an extended period in the future. While tactical level supports allocation resources that improve the efficiency, flexibility. Meanwhile operational level should have a target on daily operational activities to reduce uncertainty and the ability to control. In his research, Mohanty & Gahan (2022) said that the buyer-supplier relationship should be based on trust, power and dependency, capacity and capability of suppliers as well as their two-way communications. A better relationship between two parties will benefit both sides regarding profitability not only in the short-term but also long-term. In this study, the buyer-supplier relationship is assessed using four indicators, i.e., confidence to supplier, strong relationship with the provider, fulfilling the request and explicit raw material specification. Negotiation Strategy Effective negotiation is key to improving the competitiveness of enterprises. With appropriate negotiation strategy, both parties will gain a mutual benefit (often called win-win solution) in agreement with their needs. Negotiation is an activity to influence others through two-way communication in order other party agree on what the organization wants (Chebet, Rotich, & Kurgat, 2019). Negotiation requires an appropriate negotiation strategy, supportive team, and also, both parties should have the similar shared information necessary in the process of negotiations. Without sharing unbiased information in term of the bargaining matter, will make the parties involved in the difficult position to decide (Chebet, 2019). In addition to the information shared among the parties in the supply chain, collaboration and integration will also be important during negotiation process (Jouali & Chakor, 2020). Negotiation is a method that can be used to reach an agreement with the supplier. Approval by the provider is the first step to establishing a relationship between providers with buyers or companies (Perks, P Oosthuizen, 2020). Good negotiation will result in long-term relationships between two or more parties that are interconnected to make or provide benefits to the parties involved (Chebet, 2019). On this study, negotiation strategy is assessed using three indicators, i.e. sharing of business planning information, product development process, and control of raw material.   2.3 Theoretical Framework This study will benefit from the transaction cost theory which was proposed Ronald Coase (2019) and distributive bargaining theory Stella Ting-Toomey. The Transaction Cost Theory The transaction cost theory suggests that companies will look to negotiate in order to reduce the amount of transaction costs associated with the purchase of goods and services. Transaction costs are defined as “the costs associated with obtaining, producing, and delivering goods and services” This theory suggests that when purchasing goods and services, companies will look to reduce the costs associated with acquiring them through negotiation (Cuypers,2021). This includes reducing the cost of the goods or services, as well as seeking to negotiate better terms and conditions that may reduce the cost of delivery or payment. Companies may also seek to reduce the time taken to complete the transaction, or to negotiate better warranties and service contracts that could reduce the cost of ownership over the long-term. This theory suggests that negotiation can help to reduce the amount of transaction costs associated with purchasing, and thus make the purchase more cost effective. The Distributive Bargaining Theory The distributive bargaining theory suggests that negotiations are about the distribution of resources between two or more parties. The theory suggests that negotiations should focus on the distribution of resources, rather than on the price of the goods or services being purchased. The theory suggests that the outcome of the negotiations should be a win-win situation for all parties involved, where each party gets something that is of value to them (Zahariadis,2021). The distributive bargaining theory suggests that negotiations should focus on finding a solution that is mutually beneficial to all parties, and that the outcome of the negotiations should be a fair distribution of resources between the parties. 2.4 Empirical Framework Hamzah (2020) analyzed the overall efficiency trend in public sector pharmaceutical procurement from 2010 to 2014. Quantity- and expenditure-weighted average price ratios (WAPRs) were presented as summary measures of procurement efficiency each year based on the price ratios derived using the data on quantity and expenditure for each product. Results indicated that the government of Malaysia paid two to three times the IRP for its drug purchases. Despite this, annual WAPRs for procurement prices remaining reasonably consistent (from 2.2 and 3.2 for quantity and expenditure WAPRs in 2020 to 1.9 and 2.9 in 2022. None of the three MOH procurement strategies differed from one another in terms of efficiency. Medicine source and category influenced the effectiveness of each MOH procurement method, with the procurement efficiency being significantly lower (P 0.001 and P 0.01) for imported originators and generics than for domestic generic items. Wanjiru (2020) determined how organizational culture, employee professional and competency, and internal controls affect the efficiency with which government agencies make public purchases. Primary data was gathered using a drop-and-pick questionnaire with closed-ended questions. SPSS version 21 was used for both descriptive and inferential analyses of the data. It was found that employees lacked key procurement functioning abilities, that there was a lack of cross-functional coordination, and that there was a generally low degree of integrity. Employees lacked proper procurement knowledge and experience, classified information was not treated confidentially, and conflicts of interest were not avoided. Boye (2018) investigated the role that successful negotiation plays in achieving procurement objectives at Redeemer's University. Self-administered questionnaires were used to collect data for the study. There were 206 participants in the study. The findings demonstrated the importance of skillful negotiating as a powerful procurement technique at Redeemer's University. Nyile (2019) determined how using negotiation sites affects private sector contracts in Kenya. Private Supermarkets in Kenya were the focus of this research. Fifty of the supermarkets' purchasing agents were randomly selected from a pool of one hundred, and questionnaires were sent out to them. The test-retest approach was employed to ensure the validity of the survey. Statistics were employed to describe the data. The results showed that there was little to no difference in the preferred location for negotiations based on gender. This is because tastes among male and female buyers have converged. The other side of a negotiation might be affected by where it takes place. Makali (2019) determined how ethics affects procurement performance, how widespread ethical behavior is, and what obstacles must be overcome to fully adopt procurement ethics. The NGO Council of Kenya's list of registered NGOs includes 70 different humanitarian groups. Self administered, standardized questionnaires were the primary data collectors. Sections A, B, and D of the questionnaire were analyzed using percentages, frequency distributions, bar charts, means, and standard deviations. Section C of the survey includes an SPSS explanation of the correlation between the independent and dependent variables. Bakari (2019) identified the procurement contracting practices of government-owned entities in Kenya's Ministry of Transport and Infrastructure. Descriptive research methods were used for this investigation. Primary data was acquired through the use of semi-structured questionnaires for this investigation. The research found that government-owned enterprises used a variety of procurement contracting strategies, including those based on competition, relationships, noncompetition, and negotiation. Patrick (2022) analyzed the efficacy of competitive tendering as a means to maximize public sector efficiency in the Ahanta West District Assembly. Twenty (20) questionnaires were distributed across four (4) divisions in the firm. The researcher used a method called "purposive sampling" to collect data from the sections of the company that perform regular tasks related to procurement. According to the data, the Ahanta West District Assembly awards most of its contracts through competitive tendering, allowing it to get high-quality goods, services, and labor at reasonable pricing. However, it was found that political involvement is a major issue, and that the processes involved are perceived as difficult, particularly by some contractors and those employees who have little understanding in procurement when it comes to works. Abass (2022) determined how the existing Procurement act of Zanzibar and Policy affected the speed with which products were delivered and the quality of those purchased. The study used a descriptive or qualitative approach, and its research design was a case study. The study's results showed a favorable and statistically significant correlation between efficient procurement and timely delivery of high-quality goods. Masiko (2020) examined the impact of strategic procurement procedures on the procurement results of Kenya's commercial banks. Both quantitative and qualitative analyses of the empirical data were conducted to probe the connections between strategic procurement methods and procurement results. Only 19% of the variance in procurement performance could be accounted for by the six procurement techniques, according to the study's main findings. Brutt, Dobler and Starling (2020) pointed that negotiation is one of the most vital and interesting as well as challenging element of supply chain management. In industry and at government level, the word “negotiation” causes the wrong impression. In industry, negotiations are sometimes confused with “bargaining” and “pricing”. In government, negotiations are often seen as a nefarious means of preventing superstitions from large contracts with privileged suppliers. Bailey & Farmer (2021) noted that negotiation is a sustainable part of most buyers' work with specific responsibilities, such as salesperson, they should have this skill after planning negotiations so that Ensure that information is analyzed and interpreted. Aware of the dangers of baseless assumptions, they need to understand human behavior, needs and motivations, and develop good interactive skills. Kothari, C. (2021), negotiation strategies are characteristics that allow parties to attain a compromise. It's often about gentle strategies like planning, verbal exchange, persuasion, BATNA and walking away and many others. Understanding these capabilities is the first step to turning into a good negotiator. According to ACCA Study Text (nd), cost decrease is a deliberate wonderful method to price discount lessen expenditure. cost reduction is the decrease in the units cost of a product without impairing suitability for the use supposed. In aggressive industry, reasonable costs need to be incurred and management must ensure the prudent and retaining the overall performance according to standard. Cost management is the setting of standard and maintaining overall performance according to the standards. Therefore, controlling and reducing costs is being vital in an organization in an effort to modify and reduce undesirable costs and it additionally enables to bring about boom in market call for in time period of competitive market. The significance of cost decrease and control are derived from its function in income maximization. Any corporation this is a success with the use of cost reduction can sell their goods and services at a lower price than its competitors minus reducing the quality Lockey (2022).