IIA IIA Certifications IIA-CIA-PART3 Questions & Answers

• Question 441:

  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 442:

  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 443:

  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 444:

  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 445:

  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.

• Question 446:

  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 447:

  Which of the following is an example of framing error?

  I. A job seeker may hope that the attractive appearance of a resume will sway the judgment of a potential employer.

  II.

  A glass still holds 50% of its capacity whether the glass is described as half full or half empty. However, the former (latter) characterization may lead to a more (less) favorable opinion of the content.

  A.

  I only.

  B.

  I and II.

  C.

  II only.

  D.

  Neither I nor II.

  Correct Answer: B

  Framing error is a perceptual problem. The presentation or context of information may bias its interpretation and the resulting decision. Thus, favorably (unfavorably) presented information may be

  viewed more (less) favorably than its merits warrant. Both I and II are examples of framing errors.

• Question 448:

  Understanding the best alternative to a negotiated agreement (BATNA) helps a negotiator to avoid which of the following? I. Accepting an unfavorable settlement. II. Rejecting a favorable settlement:

  A. I only.

  B. II only.

  C. land II.

  D. Neither I nor II.

  Correct Answer: C

  Accepting an unfavorable settlement and rejecting a favorable settlement are two mistakes avoided by understanding the BATNA. The BATNA is the acceptable minimum outcome if a negotiator cannot obtain the desired result.

• Question 449:

  Which of the following is the acceptable minimum outcome if a negotiator cannot obtain the desired result?

  A. Win-win attitude.

  B. Cooperation.

  C. Best alternative to a negotiated agreement (BATNA).

  D. Win-lose attitude.

  Correct Answer: C

  BATNA is the acceptable minimum outcome if a negotiator cannot obtain the desired result. The BATNA helps a negotiator to avoid accepting an unfavorable agreement and rejecting a favorable agreement.

• Question 450:

  When negotiating with an analytical personality, the negotiator should:

  A. Present facts and precedents in an organized manner.

  B. Push the other party for quick closure of negotiations.

  C. Focus on creating a bond with the other party.

  D. Include unimportant items in the proposal for bargaining.

  Correct Answer: A

  An analytical person tends to be drawn to details and swayed by factual information.