Part A
Knowledge Test
Your task: 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 4
Why is building trust and respect in a business relationship not always easy?

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 11
What should you do before going into a negotiation to make sure the outcome is in the best interests of your company?
Question 12
If the negotiation becomes protracted, who should you inform? And how?
Question 13
List 6 techniques to negotiate effectively.
1.
2.
3.
4.
5.
6.
Question 14
How do open questions help a good negotiator gain information?
Question 15
Give an example of a written contract you may enter into in the TH&E industry.
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 18
What is the name of the clause which is designed to exclude or limit a person’s liability if the breach the contract?

Question 19
What is the purpose of a dispute resolution clause?
Question 20
Before formally making an agreement, what approval should you seek?
Question 21
List 4 professional services you might employ to get specialist advice.
1.
2.
3.
4.
Question 22
If you were unsure of how to comply with consumer protection laws, who would you consult to get professional advice?
Question 23
List 4 specialist services an accountant may be able to assist you with.
1.
2.
3.
4.

Question 24
Once you have gained the confidence of a new business associate, what can you build on that relationship?
Question 25
If you have signed a contract that stipulates that you will be paying $5,000 property management fees per year for 5 years, but your business goes broke in its first year, are you still liable to pay the money? Why/Why not?
Question 26
When setting KPIs in business agreements, why should KPIs be quantitative rather than qualitative?
Question 27
When should you review, negotiate and update your contracts?
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?
Part B
Project
Section A
Your Tasks
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 project.
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 assessment project, based on the factors you have identified in Question 5.

Section 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 0 Simulated Negotiation 0
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
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
Feedback
Negotiation 2
Real Negotiation 0 Simulated Negotiation 0
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
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
Feedback
Section 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 agreements.
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 made. 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/legal-matters/business-contracts/#verbal
https://www.business.qld.gov.au/business/starting/starting-a-business/working-business-advisers/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
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
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