SITXMGT002 Establish and conduct business relationships
Written Test Unit Code: - SITXMGT002 Unit Name: - Establish and conduct business relationships | |
Assessment for this Unit of Competency/Cluster |
Details |
Assessment 1 |
Written Test |
Assessment 2 |
Case Study |
Assessment 3 |
Assessment Guidelines
What will be assessed |
The purpose of this assessment is to assess you underpinning knowledge to complete the tasks outlined in the elements and performance criteria for this unit of competency and relating to the following aspects: •& commercial context for business relationships in the relevant industry sector and related: o industry structure and interrelationships o p sources of supply o distribution and marketing networks o professional networks • opportunities to maintain regular contact with customers and suppliers: o association membership o cooperative promotions o industry functions o informal social occasions o program of regular telephone contact o social media • principles of negotiation, stages in the negotiating process, and different negotiation techniques that can be applied • nature of agreements and contracts in the relevant industry sector and their key role, features and inclusions • key components of contract law at an overview level: o terms and obligations of contract o methods of contractual agreement o exclusion clauses o dispute resolution clause o termination of contracts • other legal requirements that impact negotiations and agreements in the relevant industry |
Place/Location where assessment will be conducted |
DC Classroom and DC Training Kitchen |
Resource Requirements |
Pen, Paper or computer. Refer to the “Assessment Conditions” for this unit in the current SIT Training Package. |
Instructions for assessment including WHS requirements |
You are required to address all questions to achieve competence. If more space is required for any answer you may attach a separate page containing your ID number, your name, unit title, unit code and the assessment task number and attach this page with the current assessment task before submission or alternatively use the back of each paper with a clear reference to the relevant question(s). All written work must be your own. Any sources of information you access and use for this assessment must be clearly referenced. Ensure you check your work and keep a copy before submitting. Your trainer will provide you with instructions for time frames and dates to complete this assessment. You are encouraged to clarify any tasks, requirements or questions you may have with your trainer. Your trainer will provide you with feedback and the result you have achieved. |
Assessment 1: Written Test Your tasks:
Answer the following questions. Each question must be completed.
Question 1 List 3 key groups of people you may build business relationships with in the TH&E Industry. |
1. 2. 3. |
Question 2 List 4 reasons business relationships are important. |
1. 2. 3. 4. |
Question 3 List 2 distribution, marketing or professional networks in your industry that would provide opportunities to help build business relationships. |
1. 2. |
Question 5 List 4 traits that can build respect and trust in a business relationship. |
1. 2. 3. 4. |
Question 6 List 6 ways you can maintain regular contact with customers and suppliers. |
1. 2. 3. 4. 5. 6. |
Question 7 List 2 methods of Networking. These may be formal or informal. |
1. 2. |
Question 8 There are several types of negotiations. List 3 different types of negotiations a TH&E manager might be involved in. |
1. 2. 3. |
Question 9 Name 2 cultural differences you may need to consider when negotiating. |
1. 2. |
Question 10 When going into a negotiation, name 2 things you can do to make a good first impression. |
1. 2. |
Question 13 List 6 techniques to negotiate effectively. |
1. 2. 3. 4. 5. 6. |
Question 16 ‘Obtaining organisational approvals’ is one of the nine steps of procuring a formal business agreement. Name 3 others: |
1. 2. 3. |
Question 17 Name 3 types of common clauses which might be included in a contract. |
1. 2. 3. |
Question 21 List 4 professional services you might employ to get specialist advice. |
1. 2. 3. 4. |
Question 23 List 4 specialist services an accountant may be able to assist you with. |
1. 2. 3. 4. |
Question 28 List 4 factors that could change over time which could affect terms and conditions in your contract. |
1. 2. 3. 4. |
Question 29 Name 2 legal requirements from your industry that you may impact negotiations or agreements. |
1. 2. |
Question 30 You are looking at entering a 3 year lease agreement for a commercial property. The contract states the lease payments will be $5,000 per month for the first year, and then increase by 3.8% every year thereafter. What will the total annual lease payments be for: |
Year 1? |
Year 2? |
Year 3? |
Assessment 2 Unit Code: - SITXMGT002 Unit Name: - Establish and conduct business relationships | |
Assessment for this Unit of Competency/Cluster |
Details |
Assessment 1 |
Written Test |
Assessment 2 |
Case Study/Project |
Assessment 3 |
Assessment Guidelines
What will be assessed |
The purpose of this assessment is to assess your ability to complete tasks outlined in elements and performance criteria of this unit in the context of the job role, and: • establish and maintain business relationships with at least two of the following: o cooperative partner with organisation o contractor o customer o networks o supplier • conduct formal negotiations, or make and manage agreements and contracts in relation to the two relationships established above, relevant to the specific business context • demonstrate the use of high-level communication and relationship building skills when conducting formal negotiations and making commercially significant business-to-business agreements in the above business relationships. |
Place/Location where assessment will be conducted |
DC Class Room and DC Training Kitchen |
Resource Requirements |
Refer to the Assessment conditions attached to the Futura Group Mapping Document located in the teacher support tools folder or the “Assessment Conditions” for this unit in the current SIT Training Package. For this assessment, the following materials must be available to support the negotiation process as relevant: preparatory facts and statistics key performance indicators market information contract templates |
Instructions for assessment including WHS requirements |
The assessment for this unit of competency consists of 3 Parts, Part A, Part B and Part C. Part A requires you to review the current supply and contract provisions in place for 3 suppliers relevant to your work area in TH&E and establish new business relationships by determining alternative supplier provisions. Part B is based on the results you have identified in Part A and requires you to conduct negotiations with 2 different suppliers to determine conditions for new supply agreements. Part C requires you to communicate the negotiated outcomes from your negotiations with your supervisor or trainer, conduct final negotiations where required and draw up the final legal agreements for supplies with each supplier. You are required to answer all questions and tasks as outlined in each Part above and the following pages. If more space is required for any answer you may attach a separate page containing your ID number, your name, unit title, unit code and the assessment task number and attach this page with the current assessment task before submission or alternatively use the back of each paper with a clear reference to the relevant question(s). Ensure you check your work and keep a copy before submitting. You are encouraged to clarify any tasks, requirements or questions you may have with your trainer. Please note, once the assessor has marked your work they will provide you with feedback. |
Assessment 2: Project Your Tasks:
PART A
Select 3 suppliers of goods and services relevant to your area of work (e.g. Food and Beverage, Cookery, Events, Tourism, Administration or similar) who currently supply your organisation (for example meat, fruit and vegetables, stationery, cleaning services, laundry services, beverages, insurance etc.)
1. List the suppliers you have selected and describe the products or services they currently provide you with
Supplier 1:
Products or services provided:
Supplier 2:
Products or services provided:
Supplier 3:
Products or services provided:
2. List the key performance indicators/specifications that are required for the supply of each product or service from each supplier.
3. Research alternative suppliers for each supplier you have listed in Question 1, and obtain an alternative quote for each supplier you currently use, based on the key performance indicators/specifications you have identified in Question 2.
4. Once you have received the 3 quotes, compare these with the existing supplier provisions and attach a summary which outlines the advantages and disadvantages for:
- Quality
- Prices
- Payment conditions
- Service provisions
- Reliability
- Specific needs of your organisations (quantities, $ terms, purchasing power etc.)
5. Based on your comparison, write a recommendation for whether one or several new supplier(s) should be considered to replace any of the existing ones. Which aspects will need to be negotiated specifically where one or several new suppliers are considered, or re-negotiated where existing suppliers are preferred?
6. How are the relationships with existing suppliers managed in your organisation? What does this entail in terms of communication, monitoring and provisions to overcome supply or service issues? What are your recommendations based on existing provisions in place (or where these do not or only partially exist)?
7. Where actual negotiation will take place as a result of the aspects you have identified in Question 5, you will be observed conducting these negotiations for Part B of this assessment
Or
Where your organisation’s policies and procedures prevent you from negotiating or re-negotiating, you will be observed conducting negotiations in a simulated environment in Part B of this
Part B – Conducting Negotiations
You will be observed conducting negations with existing or potential new suppliers as identified in Question 5 of Part A of this assessment. The suppliers may be actual, where organisational policies and procedures permit, or simulated, with colleagues or students as agreed to with your trainer. You are required to record all details discussed during the negotiation talks and use these as the basis to draw up a contract for each supplier in Part C of this assessment.
Provide the following details for at least 2 different negotiations (Negotiation 1 and 2) you will undertake:
Negotiation 1 | |
Real Negotiation Simulated Negotiation | |
Supplier details | |
represented by: | |
Location | |
Date | |
Nature of negotiation |
e.g. pricing structure, conditions etc. |
Details |
List all aspects that are to be discussed |
Observation Criteria
SITXMGT002 Establish and conduct business relationships | |||||
Criteria |
S |
NYS |
S |
NYS |
Comments |
Negotiation 1 | |||||
Student is well presented | |||||
Student is prepared with all supportive documentation on hand | |||||
Uses good stance and posture | |||||
Professional introduction | |||||
Friendly, professional welcome/greeting | |||||
Initial conversation is general and friendly | |||||
Maintains initial, professional “level” | |||||
The business relationship is established | |||||
Establishes ground for the negotiation | |||||
Makes eye contact | |||||
Uses effective communication skills | |||||
Uses people’s names | |||||
Takes notes as required | |||||
Uses effective listening skills | |||||
Uses negotiation skills with confidence | |||||
Considers win-win situation during negotiations | |||||
Negotiates with strategy | |||||
Employs different techniques as appropriate: | |||||
Considers each aspect of the negotiation before agreeing to individual aspects | |||||
Negotiates with a plan B | |||||
Negotiates honestly | |||||
Considers the representative’s ground/limits | |||||
Each aspect prepared for the negotiation is addressed | |||||
A basis for an agreement is reached | |||||
The provisions for authorisation are discussed | |||||
Further provisions for communication are established | |||||
Maintains a professional level according to role | |||||
Thanks the representative | |||||
Farewells representative in a professional manner |
Negotiation 2 | |
Real Negotiation Simulated Negotiation | |
Supplier details | |
represented by: | |
Location | |
Date | |
Nature of negotiation |
e.g. pricing structure, conditions etc. |
Details |
List all aspects that are to be discussed |
Observation Criteria
SITXMGT002 Establish and conduct business relationships | |||||
Criteria |
S |
NYS |
S |
NYS |
Comments |
Negotiation 2 | |||||
Student is well presented | |||||
Student is prepared with all supportive documentation on hand | |||||
Uses good stance and posture | |||||
Professional introduction | |||||
Friendly, professional welcome/greeting | |||||
Initial conversation is general and friendly | |||||
Maintains initial, professional “level” | |||||
The business relationship is established | |||||
Establishes ground for the negotiation | |||||
Makes eye contact | |||||
Uses effective communication skills | |||||
Uses people’s names | |||||
Takes notes as required | |||||
Uses effective listening skills | |||||
Uses negotiation skills with confidence | |||||
Considers win-win situation during negotiations | |||||
Negotiates with strategy | |||||
Employs different techniques as appropriate: | |||||
Considers each aspect of the negotiation before agreeing to individual aspects | |||||
Negotiates with a plan B | |||||
Negotiates honestly | |||||
Considers the representative’s ground/limits | |||||
Each aspect prepared for the negotiation is addressed | |||||
A basis for an agreement is reached | |||||
The provisions for authorisation are discussed | |||||
Further provisions for communication are established | |||||
Maintains a professional level according to role | |||||
Thanks the representative | |||||
Farewells representative in a professional manner |
Part C – Making formal agreements
1. Present the outcomes from each negotiation to your supervisor/manager or trainer and discuss the viability of each term negotiated according to your notes. Enter the outcomes for each contractual detail you have negotiated in the table below and indicate the changes required (if any) and/or the approval to proceed with the
Supplier 1 |
Approved |
Not Approved |
Recommended Change |
Contractual detail 1 | |||
Contractual detail 2 | |||
Contractual detail 3 | |||
Contractual detail 4 | |||
Contractual detail 5 | |||
Supervisor Name Supervisor Signature Date |
Supplier 2 |
Approved |
Not Approved |
Recommended Change |
Contractual detail 1 | |||
Contractual detail 2 | |||
Contractual detail 3 | |||
Contractual detail 4 | |||
Contractual detail 5 | |||
Supervisor Name Supervisor Signature Date |
2. Based on the feedback from your supervisor or trainer, contact the supplier and negotiate the final changes if required. Record the negotiated changes in the table and obtain final approval from your supervisor or trainer.
Supplier 1 |
Outcome |
approved |
not approved |
Details negotiated | |||
Supplier 2 |
Outcome | ||
Details negotiated |
3. Contact each supplier by email and confirm the agreements Advise each party that you will finalise the formal agreements for signing of all parties.
4. Draw up the contract agreements based on your final negotiated outcomes. Each contract must contain the following details:
You are encouraged to identify legal requirements based on your own research or legal advice. The following websites provide basic information thereto: https://www.smallbusiness.wa.gov.au/business-topics/money-tax-and- legal/legalmatters/business-contracts/#verbal
https://www.business.qld.gov.au/business/starting/starting-a-business/working- businessadvisers/types-business-advisers
Names of contracting parties including trading names and ABN/ACN, as well as their contact details
supply conditions, including volume, price, discounts, ordering periods, take or pay and delivery times
payment terms
specifications of goods or services supplied (scope of goods) warranty periods for defective goods or services
limited liability (risk of loss or damage) intellectual property
confidentiality insurance
dispute resolution
termination and exclusion clauses signature provisions
5. Present your final contracts to your supervisor and trainer for final approval
Part C Marking Guide Checklist | |||||
SITXMGT002 Establish and conduct business relationships |
S |
NYS |
S |
NYS |
Comments |
1. | |||||
The negotiated terms with supplier 1 are presented | |||||
Shortfalls or changes as result from Negotiation 1 are clarified | |||||
The requirements for changes with Supplier 1 are recorded | |||||
The negotiated terms with supplier 2 are presented | |||||
Shortfalls or changes as result from Negotiation 2 are clarified | |||||
The requirements for changes with Supplier 2 are recorded | |||||
2. (where relevant) | |||||
Supplier 1 is contacted for further negotiation as identified | |||||
Required changes are negotiated and agreed on | |||||
The final details are recorded | |||||
The final agreements are communicated internally | |||||
The final changes are approved | |||||
Supplier 2 is contacted for further negotiation as identified | |||||
Required changes are negotiated and agreed on | |||||
The final details are recorded | |||||
The final agreements are communicated internally | |||||
The final changes are approved | |||||
3. | |||||
Supplier 1 is contacted in writing and informed of agreed contract basis and finalisation of agreement | |||||
Supplier 2 is contacted in writing and informed of agreed contract basis and finalisation of agreement | |||||
4. | |||||
Contract 1 | |||||
The contract for Supplier 1 is drawn up using a suitable format as suggested on legal websites or templates | |||||
Contract features names of contractual parties | |||||
Contract features contact details of contractual parties | |||||
Contract features ABN/ACN of contractual parties | |||||
All supply conditions as agreed on are detailed | |||||
The payment terms are clearly defined | |||||
The scope of goods or services are listed in detail |
The contract outlines the warranty periods for defective goods or services | |||||
The limited liability (risk of loss or damage) clause and conditions are specified | |||||
The legal provisions for the protection of intellectual property are defined | |||||
The confidentiality clause specifies the limitations for each party | |||||
The insurance provisions are clearly defined | |||||
The provisions for dispute resolution and processes are clearly set out | |||||
The termination and exclusion clauses are explicit | |||||
Signature provisions are included | |||||
The legal aspects for supply contracts have been sufficiently identified. | |||||
Contract 2 | |||||
The contract for Supplier 2 is drawn up using a suitable format as suggested on legal websites or templates | |||||
Contract features names of contractual parties | |||||
Contract features contact details of contractual parties | |||||
Contract features ABN/ACN of contractual parties | |||||
All supply conditions as agreed on are detailed | |||||
The payment terms are clearly defined | |||||
The scope of goods or services are listed in detail | |||||
The contract outlines the warranty periods for defective goods or services | |||||
The limited liability (risk of loss or damage) clause and conditions are specified | |||||
The legal provisions for the protection of intellectual property are defined | |||||
The confidentiality clause specifies the limitations for each party | |||||
The insurance provisions are clearly defined | |||||
The provisions for dispute resolution and processes are clearly set out | |||||
The termination and exclusion clauses are explicit | |||||
Signature provisions are included | |||||
The legal aspects for supply contracts have been sufficiently identified. | |||||
The contracts have been submitted for approval |