Role of Negotiation in Purchasing Material: A Case Study of Charles & Keith Wong, Singapore

Role of negotiation in purchasing the material: A case study of Charles & Keith Wong,
Singapore

Contents
Abstract......................................................................................................................................4
Introduction................................................................................................................................5
Research Background.............................................................................................................5
Problem Identification............................................................................................................6
Research Purpose....................................................................................................................6
Research Questions................................................................................................................7
Research objectives................................................................................................................8
Literature Review.......................................................................................................................8
Concept of negotiation...........................................................................................................8
Role and importance of negotiation in growth of company.................................................10
Role of negotiation for organization.....................................................................................12
Strategies for negotiation process.........................................................................................13
Research Methods....................................................................................................................15
Research Approach...............................................................................................................15
Sampling strategy.................................................................................................................16
Data collection methods.......................................................................................................16
Data Analysis and Findings.....................................................................................................17
Implications and Conclusion....................................................................................................18
References................................................................................................................................20
Appendix..................................................................................................................................23
Interview questions...............................................................................................................23

Abstract
This paper focuses on the purchasing negotiation process of one of the leading companies of
Singapore, in the area of fast fashion goods and accessories. The major purpose of the paper
was to explore the negotiation process of the company and determine the major issues that
are preventing the organizations from achieving the maximum value of the purchases. In this
context, qualitative study was conducted with the help of interview and literature review. For
the interviews, 10 respondents from the purchasing department of Charles Wong and Keith
Wong were selected. The findings of the research indicate that the negotiation process is a
crucial process of the organization that affects the overall cost of the organization. Charles
Wong and Keith are facing the issue of high purchase prices, and shortage of raw material.
The paper recommends that the purchasing managers should focus on establishing clear
objectives, involving fewer suppliers in the negotiation process and establishing the clear
clauses and conditions for the suppliers. The findings of this research will help Charles Wong
and Keith and other organizations in improving their purchasing process.

Introduction
Research Background
This particular research focuses on one of the most important aspects associated with the
procurement in an organization – Negotiation. Procurement can be defined as the process or
action of obtaining or procuring something. Butter and Linse (2008) stated that suppliers can
be motivated to offer their best price with help of conversation and not competition. The
word “conversation” reflects the importance of negotiation in the procurement process.
Negotiation can be defined as the decision -making process between two parties that have
opposing interests. The negotiation process helps in dealing with the complex situation
during the process of procurement. The word ‘negotiation’ is originated from a Latin word
‘neg’ that means ‘no’ and ‘otsia’ that means ‘leisure’ that refers to the businessmen who had
no time for leisure. In the 17th century, the word ‘negotiation’ took a different meaning of a
dialogue between two or more parties or people who are intended to reach at a beneficial
outcome over an issue or issues in which conflict exists. In simple words, negotiation can be
defined as the process associated with combining the divergent positions into a joint
agreement with unanimity (Wertheim, 2018).
Negotiation is an important part of the purchasing process that is a sub part of procurement
process in an organization. Purchasing can be defined as an attempt of an organization or a
business to acquire various goods and services for achieving the organizational goals and
objectives. The negotiation covers the time period from the first communication between the
parties to the final step of contract signing. The purchasing professionals of the organization
should focus on obtaining the best prices for the supplies with the help of negotiation process.
In a broad sense, negotiation aims at achieving the maximum value of the money spent in the
purchasing process. In order to achieve the maximum value in purchasing process, the

purchasing professional should negotiate in the most effective manner (Kramer, 2009). This
particular research will focus on the role of the negotiation process, for the purpose of
purchasing materials for the company of Charles & Keith Wong based in Singapore.
Charles & Keith (styled CHARLES & KEITH) is one of the leading fast fashion brands of
Singapore. It offers the products under the categories of fast fashion accessories and
footwear. It was founded in the year 1996 by Charles Wong and Keith Wong. This brand has
its footprints across Europe, Middle East, Africa and Latin America (Charleskeith, 2018).
Problem Identification
In today’s highly dynamic and competitive environment, the process of negotiation has
become one of the ways for obtaining the maximum value (Borbely, 2016). A poor
negotiation in a business can destroy a company in terms of loss of customers and increased
cost. The economic pressures across the world are forcing the organizations to pressurize
their negotiators, to use the best negotiation practices so as to achieve the best prices for the
raw material and supplies procured from the wide range of suppliers (Hoezen & Volke,
2015). Organizations across the world including Charles & Keith Wong are in a weak
position in context of negotiating with suppliers and obtaining the best prices for the raw
material and other supplies. In this context, there is a need of some strategic approaches and
strategies that can be used for maintaining the relationships with suppliers along with
maximizing the overall value of the money spent in the purchasing process. The process of
negotiation involves a number of discussions and agreements on certain aspect (Rogers &
Fells, 2018).
Research Purpose
The overall purpose of this research is to determine the role and importance of negotiation in
the purchasing process of Charles & Keith Wong. The purchase of raw material and purchase
of supplies in the manufacturing process includes a number of issues such as the organization