CIPS Updated L4M8 Exam Questions and Answers by stanislaw

If a supplier is accredited or is a member of an association that promotes good ethical conduct, a statement to this effect is likely to be featured on its company documentation. This could be in a form of letters after the organization name or the authorized use of logo.

Accreditation information should be verified by procurement professionals either asking organiza-tion for certification to prove membership or accreditation or checking on a professional register.

Below are associated bodies that form some industries.

1. ISO 14001 – for quality management

2. CIPS – for procurement and Supply

3. Red Tractor – NGO Registered in the UK, promoting human right

4. Amnesty International – human right

5. Carbon Trust – For Carbon neutral status.

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Refer to the question column for response

Damages are ‘sum of money that the supplier pays if it fails to carry out its contractual obligation.

When creating terms for damages in the contract, it should be considered that Damages are categorized into two types (liquidated and un-liquidated). And which or if both are applicable to the contract in hand.

Liquidate Damages are fixed amount of money agreed between the parties that is payable if a contract is breached. For example, knowing that supplier not being able to install a device properly in a power transformer may destroy the device and going ahead to include a fee in the contract if the device was destroyed.

Un-liquidated damages are unfixed amount of money. It is used when the amount of money that will compensate the injured party cannot be known in advance. A court decides the amount when the damages occur. For example, knowing that supplier not being able to install a device properly in a power transformer may destroy the device, other appliances and equipment unknown, cause the buyer delay in the process and reputational damage as in customer dissatisfaction. Yet, unquantifiable as both parties are unable to fix a fee in advance on the damages and leaving it to the court to decide the damage if it may occur.

Influencing is the capacity to be able to change behavior or opinions, either consciously or subconsciously.

As outlined by Yukl and falbets work from 1990 influencing can relate to corruption within procurement in these six ways.

1)A party can be assertive (forceful, directive, using deadlines),

2) Ingratiating i.e. using charm and flattery.

3) Exchange-Trading favors,

4) Upward appeal (requesting input for senior management not only that influencing can come as

5) Coalition; team members uniting for support.

5) Rational persuasion, i.e. bringing in logic and facts for clarification

Key performance indicator (KPI) is another method of monitoring how a supplier is delivering on a contract.

When creating KPIs to manage suppliers and their contracts the areas monitored should be related to the organization’s overall strategy that is where organization’s success will be measured.