IIA Certified Internal IIA-CIA-PART4 Questions & Answers

• Question 41:

  There are many types of third-party negotiations available to parties facing disagreement. If the goal is to be certain that settlement is reached, a negotiator with authority to make a decision should be selected. The best negotiator to select, given this goal, would be a(n):

  A. Mediator.

  B. Arbitrator.

  C. Consultant.

  D. Conciliator.

  Correct Answer: B

  An arbitrator has the authority to impose an agreement. Arbitration may be requested by the parties or may be imposed by law or by the terms of a contract.

• Question 42:

  Which of the following is a benefit of the communication link represented by negotiating employee-supervisor differences?

  A. Each employee perceives that management values his/her accomplishments.

  B. A written communication link between the employees and management is provided.

  C. Each employee is shown that management values his/her rights and needs.

  D. The need for an informal grapevine is reduced.

  Correct Answer: C

  The benefits of negotiating employee-supervisor differences include communicating both sides of an issue without litigation, recognizing employee concerns to indicate that management values each subordinate's needs and rights, and impartially treating tensions in the work environment while finding compromise solutions.

• Question 43:

  A construction manager is using a distributive-bargaining approach in negotiating the price of lumber with a supplier. The construction manager will:

  A. Concede to the supplier's asking price in order to maintain a positive working relationship.

  B. Hire a mediator to negotiate the deal on behalf of the manager.

  C. Attempt to get agreement on a price within the settlement range (that is, within both the manager's and supplier's aspiration ranges).

  D. State the resistance point (that is, the highest price acceptable) and ask the supplier to concede.

  Correct Answer: C

  When using a distributive-bargaining approach, the negotiator operates with a maximum desired result (target point) and a minimum acceptable result (resistance point) in mind. If the ranges of feasible outcomes (aspiration ranges) overlap, an agreement is possible.

• Question 44:

  The method of principled negotiation is based on which of the following principles?

  I. Separate the people from the problem.

  II. Focus on positions, not interests.

  III. Invent options for mutual gain.

  IV.

  Insist on using subjective criteria.

  A.

  I and II only.

  B.

  I and Ill only.

  C.

  I, II, and Ill only.

  D.

  II, Ill, and IV only.

  Correct Answer: B

  The principled negotiation method focuses on basic interests, mutually satisfying options, and fair standards. The basic principles include (1) separating the people from the problem; (2) focusing on interests, not positions; (3) inventing options for mutual gain; and (4) insisting on using objective criteria.

• Question 45:

  Added-value negotiation is characterized by:

  A. One party approaching another with a proposal.

  B. A series of offers and counteroffers between the negotiating parties.

  C. Two parties making multiple deals.

  D. One party quickly conceding to the demands of the other.

  Correct Answer: C

  The basic principle of added-value negotiation is that the parties make multiple deals to add value to the process. The parties mutually clarify their common interests, identify options or the range of values each side can offer the other, and design alternative deal packages. Each package should be a win-win offer consisting of groups of the values identified in theprevious step.

• Question 46:

  What is a primary disadvantage of forcing another party to accept terms in a negotiation?

  A. Damage of the relationship between the negotiators.

  B. Lack of achievement of the negotiator's goals.

  C. Increased time involved in reaching an agreement.

  D. Reduction in internal support for the negotiator's tactics.

  Correct Answer: A

  In future negotiations, the "forced" opponent will be less likely to work with the negotiator to achieve mutual goals. Negotiations in which one or both parties feel they must "win" at the expense of the other party ultimately do not build a relationship of trust and cooperation.

• Question 47:

  Steps in a negotiation include clarifying interests, identifying options, designing alternative deal packages, selecting a deal, and perfecting the deal. The type of negotiation described is:

  A. Two-party.

  B. Three-party.

  C. Added-value.

  D. Ineffective.

  Correct Answer: C

  In added value negotiating, the two sides make multiple deals to "add value" to the process. Clarifying interests, identifying options, designing alternative deal packages, selecting a deal, and perfecting a deal are all steps in added-value negotiating.

• Question 48:

  Two individuals negotiate the details and put a deal in written form. The individuals have developed a good relationship and future negotiations will benefit. Which step of thevalue- addednegotiating process has taken place?

  A. Perfect the deal.

  B. Identify options.

  C. Design alternative deal packages.

  D. Select a deal.

  Correct Answer: A

  The individuals performed step five of value-added negotiation by perfecting the deal. This step is characterized by negotiating details and putting the deal in written form. The process creates relationships that will benefit later negotiations.

• Question 49:

  The negotiator, when encountering unexpected resistance from another party, should first:

  A. Attempt to determine the reason behind the resistance.

  B. Stop the meeting and address the other party's concerns privately.

  C. Restate the negotiator's position regarding the issue.

  D. Research the other party to determine the party's views and requirements.

  Correct Answer: A

  The first step in overcoming unexpected resistance is to attempt to determine the reason behind the resistance. Without knowing the reason, the negotiator is unable to counter it effectively. For example, knowing whether the other party is concerned about a major issue or a detail will affect the negotiator's response.

• Question 50:

  A parent wishes to sell a subsidiary for US $1.6 billion. A buyer wishes to acquire the subsidiary for US $1.1 billion, with the best alternative to a negotiated agreement (BATNA) of US $1.4 billion. What is an acceptable BATNA for the seller in order for negotiation to be feasible?

  A. US $1.3 billion.

  B. US $1.5 billion.

  C. US $1.7 billion.

  D. US $1.75 billion.

  Correct Answer: A

  US $1.3 billion is an acceptable BATNA because the BATNA of the buyer is US $1.4 billion. Any amount over US $1.4 billion would cause negotiation to not be feasible.