SITXMGT002 - VCI - (Student Name) - Assessment Tool Project

ESTABLISH AND CONDUCT
BUSINESS RELATIONSHIPS
SITXMGT002
Student Assessment Tool

SITXMGT002 Establish and conduct business relationships Student Assessment Tool
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VCI_DOHM_SITXMGT002_V.1.0 Page 2
Assessment Summary Sheet

Unit SITXMGT002 Establish and conduct business relationships
Pre-Requisite Units NA
Student Name
Student ID
Result
S = Satisfactory
Final Assessment Result for this Unit
NYS = Not Yet Satisfactory
NA = Not Assessed
Assessment 1 Short Answers S | NYS | NA
Assessment 2 Project S | NYS | NA
Unit Outcome  Competent  Not Yet Competent

Re-assessment Required  Yes  No
Re-enrolment Required  Yes  No
This form is to be completed by the assessor and used a final record of student competency.
All student submissions including any associated assessment cover sheets (outlined below) are to be attached to this
summary sheet before placing on the student’s file.
Student results are not to be entered onto the Student Database unless all relevant paperwork is completed and
attached to this form.
Assessor Feedback:
Student Declaration: Assessor Declaration:

I declare that the evidence I have submitted for this unit I declare that I have conducted a fair, valid, reliable and
of competency is my own work and that: flexible assessment of this assignment in accordance to the
 I have been assessed in this unit. Principles of Assessment and the Rules of Evidence as
 I have been provided with feedback. outlined in the Standards for RTOs 2015.
 I have been advised of my result. I have provided appropriate feedback. I also declare that I
 I am aware of my appeal rights. have undertaken the indicated assessment integrity checks:
 Check for
plagiarism/Copying/Collusion/Authenticity
(learner’s own work)
 Cheating or use of model answers
Student name: ________________________
Assessor name: _________________________
Signature: ________________________
Signature: _________________________
Date: ______/______/__________
Date: _______/________/_________
Unit Summary
The purpose of assessment for this unit is to gather evidence of the student’s competence
against the elements, as well as skills and underpinning knowledge, required to establish and
maintain business relationships.
This unit describes the performance outcomes, skills and knowledge required to establish and
manage positive business relationships. It requires the ability to use high-level communication and
relationship building skills to conduct formal negotiations and make commercially significant
business-to-business agreements.
The unit applies to all industry sectors, and to individuals who take responsibility for making
decisions about purchasing or marketing activities. They also oversee the maintenance of
contracts or agreements. This could include senior operational personnel, sales and marketing
personnel, managers or owner-operators of small businesses. Agreements may relate to
corporate accounts, service contracts, agency agreements, venue contracts, rate negotiations,
preferred product agreements, supply agreements and marketing agreements.
No occupational licensing, certification or specific legislative requirements apply to this unit at the
time of publication.
Elements of the unit

1. Build business relationships.
2. Conduct negotiations.
3. Make formal business agreements.
4. Foster and maintain business relationships.
Overview of Assessments
SITXMGT002 Establish and maintain business relationships
There are two (2) assessment tasks in this unit, and you must complete all assessments satisfactorily
in order to be marked competent in this unit.
The assessment for SITXMGT002 consists of:
Assessment 1 – Short Answers

You are required to address all questions to achieve competence. Your trainer will provide you with
instructions for time frames and dates to complete this assessment.
Once completed, carefully read the responses you have provided and check for completeness. Your
trainer will provide you with feedback and the result you have achieved.
Assessment 2 – Project
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 below.
Information for Students

Please read all the information given to you when you receive this assessment guide. If you do not
understand any part of this assessment guide, please inform your assessor/trainer.
To achieve competency, you must satisfactorily complete all assessment tasks within the date and
time allotted by your assessor/trainer. This will demonstrate that you have all the required skills,
knowledge for this unit. An overview of the skills and knowledge to be assessed in this unit is
provided in this Assessment Guide.
Students who present copied or plagiarised assessments are considered participants in the act of
academic misconduct which would lead to disqualification of their submitted work. (Read the
section on Plagiarism and Assessment Dishonesty below.)
The assessments are intended to be equitable, fair and flexible. All the information, skills and
knowledge being assessed by the assessments has been based on theory and skills delivered to you
during classes and meet the requirements of the unit of competency.
Submitting Assessment Tasks
You must submit assessment tasks with the provided cover sheet.
ALL tasks must be completed in legible English. It is preferable that tasks submitted for assessment
are typed. Where this is not possible or where room is provided on a paper for short answers, you
must write clearly. Unreadable assessment tasks will be returned unmarked.
You must submit assessments on or before their due date. Extensions for individual assessment
tasks may be negotiated in specific circumstances according to VCI’s Policy and Procedures. To
arrange an extension, you must speak to your assessor prior to the due date. Extensions due to
illness will require a medical certificate. Extensions must be confirmed by trainers in writing.
Assessment Outcomes
There are two outcomes of assessments: S = Satisfactory and NYS = Not Yet Satisfactory (requires
more training and experience).
You will be awarded C = Competent on completion of the unit when your assessor is satisfied that
you have completed all assessments and have provided the appropriate evidence required to meet
all criteria. If you fail to meet this requirement you will receive the result NYC = Not Yet Competent
and will be eligible to be re-assessed in accordance with the VCI’s policies and procedures.
Re-assessment
Students will be allowed to sit for up to two further attempts at a practical assessment item or test
question for which the outcome is Not Yet Satisfactory within the timeframe of a course (unit of
competency). Students judged as NYS in an assessment will be allowed to resubmit if they have
attended all practical classes for the related unit.
Student Access to Records

Students have the right to access current and accurate records of their participation and results at
any time. You may request to see your results or attendance sheets from Administration on request.
You will be required to show proof of identification.
Support
You may seek clarification about any assessments at any time from your assessor. Your assessor will
only assist or intervene during an assessment if there is a risk of injury to yourself or one of your
class members.
Adjustments for students with special needs
Students who have special needs may be allowed reasonable adjustment in line with the VCI’s
Policies and Procedures. This means that there may be modifications to the way in which evidence
of your competence is gathered. However, it will not change the standards or outcomes you must
achieve. It could include alternate methods of assessment the assist the student.
If you consider that you need any special considerations in relation to assessment of the unit, please
contact the Course Coordinator.
Appeals
If you are not happy with your results:
1. Your assessment may be reassessed upon appeal
2. Your assessor/trainer may provide you with alternate options of assessment in order to gain
competency depending on initial results
3. If you are still unhappy about your assessment results after following the steps mentioned
above, you may submit a formal complaint in accordance with VCI’s Complaints and Appeals
Policy.
Plagiarism and Assessment Dishonesty
The New York College (VCI) is committed to ensuring that all students behave with integrity when
undertaking an assessment. Therefore, it is essential that you understand the principles underlying
assessment integrity and behave in a manner according to these principles.
Please read the following information and please ensure you have access to and have read the
plagiarism and assessment dishonesty policy. This policy can be found on the VCI’s website and is
also discussed in your orientation prior to commencing the course.
What is Plagiarism and Assessment Dishonesty?
Plagiarism is copying, paraphrasing or summarising, without appropriate acknowledgement, the
words, ideas, scholarship and intellectual property of another person. This remains plagiarism
whether or not it is with the knowledge or consent of that other person. Plagiarism has also taken
place when direct use of others' words is not indicated, for example by inverted commas or
indentation, in addition to appropriate citation of the source.
Each individual student is responsible for ensuring that they are fully informed about methods of
acknowledgement appropriate to any piece of assessable work that they submit.
Assessment dishonesty includes plagiarism, collusion, the fabrication or deliberate

misrepresentation of data, and failure to adhere to the rules regarding examinations in such a way
as to gain unfair assessment advantage.
Collusion is the involvement of more than one individual in an instance of assessment dishonesty. All
parties involved in such collusion are in breach of the principles of assessment honesty (unless there
is good evidence of innocent involvement). "Collusion" needs to be distinguished from
"collaboration", defined for the purposes of this document as work jointly undertaken and
produced.
Incidence of Plagiarism or Assessment Dishonesty

If the New York College believes any act of plagiarism and assessment dishonesty has occurred, the
student/s will be contacted and will be given an opportunity to explain their case. Should this be
repeated the student will be penalised. Penalties include re-submitting the assessment task or unit
and for repeated offences, re-sitting the unit at student’s own cost or cancellation of enrolment.
How information will be handled: All information regarding an incident of plagiarism or assessment
dishonesty will be recorded as per VCI’s Plagiarism and Assessment Dishonesty Policy. Only relevant
staff members will be given access to the information as required by state and federal privacy laws.
I have read and understand the information provided above and also understand and accept that
any act of plagiarism and academic dishonesty may have penalties including cancellation or
suspension of my enrolment with New York College. I further declare that:
 All assessment work submitted for this unit competency is my own original work and plagiarism
and collusion has not occurred.
 Assessment work is not copied nor has not been submitted for any other unit/course.
 I have taken proper care and effort to ensure my work has not been copied by another person.
 I understand the consequences of engaging in plagiarism as described in VCI’s Plagiarism and
Assessment Dishonesty Policy and I have obtained and read the Plagiarism and Assessment
Dishonesty Policy.
Student Signature: ............................................................... Date: ....../....../.............
Assessment Cover Sheet

ASSESSMENT 1: Short Answers
Student Name
Student ID
Unit(s) of Competency and SITXMGT002 Establish and conduct business relationships
Code(s)
Trainer/Assessor
Assessment Outcome  Satisfactory  Not Yet Satisfactory
Attempt Number  First  Second  Third
Comments /Feedback
Statement of Authenticity
I acknowledge that I understand the requirements to complete the assessment tasks
The assessment process including the provisions for re-submitting and academic appeals were
explained to me and I understand these processes
I understand the consequences of plagiarism and confirm that this is my own work and I have
acknowledged or referenced all sources of information I have used for the purpose of this
assessment
I have made a photocopy or electronic copy or photograph of my assessment task, which I can
produce if the original is lost.
Student Signature: Date: / /20

I declare that I have conducted a fair, valid, reliable and flexible assessment with this student, and I
have provided appropriate feedback. I also declare that I have undertaken the indicated assessment
integrity checks.
Assessor Signature: Date: / /20
===========================================TEAR HERE ======================================
RECEIPT OF LODGEMENT
Student Name Student ID
Unit: SITXMGT002 Establish and conduct business relationships Assessment Short Answers
Trainer Name Date submitted:
Signature
Received by: Date received:
:
Assessment Guidelines
Assessment Method
The following assessment is written assignment to be completed by the student.
The student must complete all 18 questions and tasks.
Submission instructions
The student is to submit the completed assessment with all answers to the trainer.
Ensure that the student includes the assessment cover sheet and signs the declaration section.
The assessment task is due on the date specified by the assessor.
Assessment conditions
The student must complete this task independently.
The student must complete this task in the space provided in this assessment tool.
What will be assessed
The purpose of this assessment is to assess your knowledge required to complete the tasks outlined in
elements and performance criteria of this unit and relating to the following aspects:
commercial context for business relationships in the relevant industry sector and related:
o industry structure and interrelationships
o 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.
Resource Requirements
Computer, Microsoft Office, Internet
Assessment 1
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. Costumer
2.Supplier
3. Investor
Question 2 List 4 reasons business relationships are important.

1. increased sales with a retention-oriented strategy
2. improved customer service levels
3. positive word of mouth promotion.
4. reduction of operating and marketing expenses
Question 3 List 2 distribution, marketing or professional networks in your industry that would
provide opportunities to help build business relationships.
1. Exchange for Australian Travel
2. Council for Australian Tourism Export
Question 4 Why is building trust and respect in a business relationship not always easy?
Why is it sometimes difficult to establish mutual respect and trust in a corporate setting? The
owners, managers, staff members, or clients you are collaborating with might have had terrible
experiences with other businesses in the past, making them hesitant of working with you today.
Question 5 List 4 traits that can build respect and trust in a business relationship.
1. Openness
2. Integrity
3. Positivity
4. Respecting other people
Question 6 List 6 ways you can maintain regular contact with customers and suppliers.
1. Online interaction
2. Lunchtime produce
3. personal encounters
4. Promotions
5. Discounting
6. Trade expose
Question 7 List 2 methods of Networking. These may be formal or informal.

1. community service organizations
2. Association for professionals
Question 8 There are several types of negotiations. List 3 different types of negotiations a TH&E
manager might be involved in.
1. Rate concordance
2. room consensus
3. marketing understanding
Question 9 Name 2 cultural differences you may need to consider when negotiating.
One decision-maker or a team? Some cultures rely on a single leader to make the final call, while
others use teams and make decisions by consensus. Body language and emotion - In some cultures,
reactions to negotiations are highly forthright. The feedback and body language the person displays
to you throughout the meeting can help you determine what they are thinking. Other cultures are
more subdued and won't show much emotion during negotiations.
Question 10 When going into a negotiation, name 2 things you can do to make a good first
impression.
1. Wearing business attire
2. Sincere greetings
Question 11 What should you do before going into a negotiation to make sure the outcome is in
the best interests of your company?
 Never skip doing your assignment.
 a foundation for your terms
 Have win-win agreements.
 Have backup strategies for plan B.
Question 12 If the negotiation becomes protracted, who should you inform? And how?
 Make sure that all parties involved are kept informed with the most recent
information if the negotiation drags on. This could entail scheduling a time for a
debriefing session with everyone participating or sending meeting results through

email. It is also a chance to solicit comments or ideas for advancing the negotiations.
In larger organisations with several corporate representatives, internal
communication is especially crucial.
Question 13 List 6 techniques to negotiate effectively.

 Leave your ego at the door.
 Improve your listening abilities.
 You won't get what you don't ask for.
 Expect compromise.
 Offer and demand dedication.
 Don't take on their issue
Question 14 How do open questions help a good negotiator gain information?

A skilled negotiator can gather information using open questions in the following ways: Obtain
knowledge. When negotiating, never make any assumptions. Check your level of comprehension
and interest. Choose a behavioural approach.
Question 15 Give an example of a written contract you may enter into in the TH&E industry.
A loan agreement between automobile buyers and sellers is a type of written agreement.
Question 16 ‘Obtaining organisational approvals’ is one of the nine steps of procuring a formal
business agreement. Name 3 others:
1. Having the contract put in writing.
2. Read the contract carefully.
3. Keep the signed contract in a file.
Question 17 Name 3 types of common clauses which might be included in a contract.

1. Termination provisions.
2. clauses of exclusion.
3. clauses for resolving disputes
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?
Exclusion clauses
Question 19
What is the purpose of a dispute resolution clause?
These sections describe the steps to take if there is a dispute. They are typically created to
encourage both parties to try to settle the disagreement amicably or find an alternative to going
to court. "Should a dispute arise, both parties will attend a mediation session facilitated by an
independent mediator to be agreed upon by both parties," is an illustration of one step in a
dispute resolution clause.
Question 20 Before formally making an agreement, what approval should you seek?
The employees are informed of the agreement's provisions and their implications. The explanation
is given in a way that is appropriate for the audience (e.g., young employees or employees from
varied cultural backgrounds).
Question 21
List 4 professional services you might employ to get specialist advice.
1. Financier
2. Insurance agency
3. Accountant
4. Lawyer
Question 22
If you were unsure of how to comply with consumer protection laws, who would you consult to
get professional advice?
Automatic consumer guarantees apply to companies who sell, lease, or hire goods or render
services to Australian customers.
Question 23 List 4 specialist services an accountant may be able to assist you with.
1. Enterprise Planning
2. The majority of daily bookkeeping requirements, including payroll, are covered by budget
forecast preparation.
3. the criteria for FBT, superannuation, and PAYG tax. Creating and submitting income tax
returns
4. responsible for processing the paperwork that results from registering businesses and
companies
Question 24 Once you have gained the confidence of a new business associate, what can you
build on that relationship?

Once I'm confident in a new venture, I can take the following actions:
 Be genuine.
 Determine Common Objectives and Values.
 Build up respect amongst you.
 Give a Vulnerability.
 Create Meaningful Connections to Help People Network.
 Get closer to you.
 Create a fun activity for the two of you.
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?
The contract should specifically outline what will happen if the company fails. There may have
been a clause that specifies what must be done if the business closes before the contract's
expiration date. Most often, after a business fails, it is not responsible for paying such costs for
the remaining time periods.
Question 26 When setting KPIs in business agreements, why should KPIs be quantitative rather
than qualitative?
Your KPIs should show this if your objectives are qualitative (increase customer satisfaction) and
quantitative (raise sales). Measures, or KPIs, can frequently be specified too broadly, which is a
problem I constantly encounter (and write about frequently).
Question 27 When should you review, negotiate and update your contracts?
The terms of the contracts should be evaluated, negotiated, and amended whenever conditions,
governmental regulations, corporate objectives, or the end of the contract arise.
Question 28 List 4 factors that could change over time which could affect terms and conditions in
your contract.
1. Distribution expenses or difficulties
2. Customers that use the service in number
3. The quality of service received or anticipated
4. environmental or external variables
Question 29 Name 2 legal requirements from your industry that you may impact negotiations or
agreements.
1. Anti discrimination
2. collective bargaining
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? 60000
Year 2? 62880
Year 3? 64646.64
Assessment Cover Sheet

ASSESSMENT 2: Project
Student Name
Student ID
Unit(s) of Competency and SITXMGT002 Establish and conduct business relationships
Code(s)
Trainer/Assessor
Assessment Outcome  Satisfactory  Not Yet Satisfactory
Attempt Number  First  Second  Third
Comments /Feedback
Statement of Authenticity
I acknowledge that I understand the requirements to complete the assessment tasks
The assessment process including the provisions for re-submitting and academic appeals were
explained to me and I understand these processes
I understand the consequences of plagiarism and confirm that this is my own work and I have
acknowledged or referenced all sources of information I have used for the purpose of this
assessment
I have made a photocopy or electronic copy or photograph of my assessment task, which I can
produce if the original is lost.
Student Signature: Date: / /20

I declare that I have conducted a fair, valid, reliable and flexible assessment with this student, and I
have provided appropriate feedback. I also declare that I have undertaken the indicated assessment
integrity checks.
Assessor Signature: Date: / /20
===========================================TEAR HERE ======================================
RECEIPT OF LODGEMENT
Student Name Student ID
Unit: SITXMGT002 Establish and conduct business relationships Assessment Project
Trainer Name Date submitted:
Signature
Received by: Date received:
:
Assessment Guidelines
Assessment Method
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 below.
Submission instructions
Ensure that the student completes the assessment cover sheet and signs the declaration section.
The assessment task is due on the date specified by the assessor.
Assessment conditions
Skills must be demonstrated in an environment or activity in any industry sector where contracts are
negotiated and agreed. This can be:
 an industry workplace
 a simulated industry environment.
Assessment must ensure access to:
 other people with whom business relationships can be established; these can be:
 those in an industry workplace who are assisted by the individual during the assessment process; or
 individuals who participate in role plays or simulated activities, set up for the purpose of
assessment, in a simulated industry environment operated within a training organisation.
 materials that support the negotiation process:
 preparatory facts and statistics
 key performance indicators
 market information.
 Assessors must satisfy the Standards for Registered Training Organisations requirements for
assessors.
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.
Resource Requirements
Refer to assessment conditions
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
Assessment 2
PART 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: Meat – Red supplies
Products or services provided: Supply us meat products such as steaks, Chicken, Ribs etc.
Supplier 2: Fruit and Veg Yarra green

Products or services provided: Supply us all vegetable and fruits etc
Supplier 3: Sea food and frozen items. Blue Oscine

Products or services provided: Provide us sea food items and frozen chips and other frozen
items etc.
2. List the key performance indicators/specifications that are required for the supply of each
product or service from each supplier.
Beverages: A standard purchase specification is a brief description of the quality, size, weight, or
count factor that is desired for a specific item. Using purchase specifications will ensure that
purchasing and receiving are uniform and consistent, helping to maintain desired food costs and
producing a standard product.
Fresh vegetables
1. The fresh veggies must be crisp, well-formed, and tenderly mature. They must also be free of
coarse fibres, stringy old or hard due to excessive ageing and growth, and spongy or fluffy old or
fluffy due to ageing. The vegetables must be those in season, starting with late season receipts
and early season arrivals. These will have just been picked, cleaned, and ranked for soundness
and wholesomeness. In terms of botany, fresh vegetables for human consumption are made up
of plant fruits, stem flowers, roots, leaves, and modified stems.
2. The fresh vegetable must be devoid of disease, physiological problems, damage, and insect
infestation. They must also be devoid of discoloration, harm, damage, or indications of
inappropriate treatment, storage, or transportation, which give them a less-than-fresh
appearance.
3. The fresh vegetables must be free of rotting, waxes, mineral oil, and dyes.
Meat Farm Fresh: Precise requirements allow for accurate competitive bidding among suppliers,
which lowers costs. Higher grade products can also be used, ensuring a steady level of quality in
menu items. Typically, basic delivery procedures and purchase price are not included in
specifications. Prices and directions might change very fast. Specifications must be carefully
considered and rarely changed quickly.
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: ADVANTAGES
1. Emphasising the market's needs.
2. Production disruption number two.
3- Ensures higher calibre achievement in all areas of endeavour.
4. Worker resistance.
DISADVANTAGES
1. Waste and productive activity.
2. Quality Costs Money.
3. Beneficial in overcoming competition.
4- Suppresses Originality.
5. It aids in the creation of a functional communication system.
 Prices:
 The primary benefit of the price system is that it provides producers and consumers
with signals. If a price is relatively high, consumers may make fewer purchases, which
could cause the price to decrease. Nevertheless, as producers attempt to increase
output in response to a high relative price, the price should decline.. Low prices
typically encourage both consumers and producers to buy more and produce less.
Additionally, this may result in a price increase. Consumers and producers can select
where to allocate their resources when prices are allowed to alter in response to
market developments. Additionally, many minds are typically more productive than a
committee of fewer planners. Free market prices frequently result in effective pricing
and markets that lessen economic surpluses and shortages. On the other side, markets
aren't always effective. If a monopoly or other inefficient market (often referred to as
a market failure) is the cause of high prices, then prices won't change and many
customers won't purchase the goods. If a single company holds the patent for a
product that is a life-saving pharmaceutical, some customers may choose not to
purchase it because of the high cost. The main drawback of a price system is that
people with lesser incomes won't have the means to buy the things.
 Payment requirements:
 ADVANTAGES: Payment terms and an increase in working capital lower the need for
corporate loans and give you more cash stability when your expenses are at their
highest. The notion of your company's stability and supplier confidence is another
advantage of receiving longer terms from the supply base.
 Disadvantage: The larger the penalty and the higher the cost of your items are, the
later you pay. If you want to maintain the costs of operating your business as low as
possible, you typically have to make payment within the first 10 days or within a 30-
day period.
 Service provisions
 Advantage: You typically don't need inventory if you sell services. Instead of
purchasing and selling things, you persuade clients to benefit from your capacity to
simplify their lives. Since you don't need to manufacture anything, you don't need a
production facility and you don't need to wait for the goods to be finished and
inspected before you can sell them.
 Disadvantage: Your service company is more difficult to evaluate than a
manufacturer or retailer. These companies have valuable inventory, equipment,
and other tangible assets. A phone and very little other equipment are all you need
to launch a service business. While this makes for an easy start-up, valuation may
be challenging. In order to persuade lenders of the value of your business, you must
build a track record of sales and some trustworthy sales estimates.
 Reliability:
 Advantages: Managers sometimes have a heavy burden; if they don't assign

tasks to their team, they won't be completed on time. However, if they delegate
a task to an unreliable employee, the failure that follows will reflect poorly on
them. Therefore, managers are constantly in dire need of reliable employees. A
reputation for dependability is priceless when you're competing for a promotion
since it increases the likelihood that you'll be kept on while others are let go.
Prospective employers will undoubtedly check your references while you're
looking for a new job to see if you're a trustworthy person.
 Disadvantages: Being seen as a trustworthy employee is excellent, but earning
that reputation isn't always enjoyable. Gaining others' trust frequently requires
disclosing details about your performance that you'd rather they didn't know—
details that they could be tempted to use against you. If you want to keep
people's trust, you must do the duties you've agreed to do when you said you
would, even if it means working long hours when you'd rather be doing
something else. Reliable workers may unfairly become overworked in
comparison to their less reliable co workers in some organisations where they
are "rewarded" with increasing amounts of work. particular requirements of
your organisations.
 Purchase power:
 Advantages: A very basic and ancient theory of economics is parity. The

fundamental tenet is that a commodity or service should cost roughly the same
regardless of the economy. If this doesn't occur, one currency is either
overpriced or undervalued compared to another.
 Disadvantage: Possibly more expensive infrastructure or services could be
delivered. Because it is impossible to anticipate and evaluate every event that
might affect the future activity, PPP project agreements are lengthy, complex,
and generally rigid.
 Specific needs of your organisations (quantities, $ terms, purchasing power etc.)
Alcohol Current supplier- New supplier- Comments

Dan Murphy’s BWS
Quality Quality can be Promising good
better quality
Prices Prices can Fixed prices-
fluctuate as per prices are
market demand cheaper
Payment Monthly Fortnightly
conditions
Service provisions Delivery weekly Delivery twice a BWS is offering
week promotional
material like
coasters, glasses
and fridges for
drinks displays.
Reliability Orders are Promising on time
sometimes late delivery
Quantities Can supply Has promised
required they can supply
quantities the required
quantities
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?
 Since his pricing and quality are inferior to that of a new supplier, I would advise
switching meet suppliers. The quality of ABC Meat has declined; their packaging has
been compromised, their portions change every week, and their products are not as
fresh as they once were.
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)?
 We frequently communicate with your suppliers.
 Pay the bills owed to your suppliers on time.

 If you anticipate a delay in paying an account, contact a supplier before the deadline for
payment.
 Create a good rapport with the representatives of your current suppliers.
 With industry sales representatives, you should be fair yet firm because they can easily
eat up a lot of your time.
 Rush orders should always be avoided because they can be quite stressful for your
company and on the relationship with your suppliers.
 Keep an eye on the health of your suppliers' finances. Discuss the general financial
stability of the companies that provide goods and services to you with colleagues in the
industry and rivals.
 As they come up, address any concerns you may have regarding your supplier
relationships.
 Immediately report faulty or damaged items to the supplier with supporting evidence.
 Be ready to periodically examine and renegotiate the terms of your agreements with
your suppliers.
7. Where 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 in a
simulated environment.
i. Intercultural Conflict: Be Wary of Stereotyping. We frequently strive to acquire cultural

customs that will help us blend in or avoid offending someone when negotiating with
someone from a different culture. Focusing on cultural differences can have a downside,
too, in that we run the risk of oversimplifying or stereotyping the other party if we assign
too much weight to presumptive cultural differences. Misunderstandings and conflict
may develop when one or both sides fall into this trap.
ii. Conflict with Friends and Family: Discuss Tough Topics Up Front. When friends and
family members negotiate business arrangements together, it may lead to strained
relationships, bad deals, or even broken sentiments. In fact, common sense cautions us
against doing business with those who are close to us. However, there are times when
opportunities or circumstances make dealing with a relative or close friend difficult or
impossible to avoid.
iii. Workplace Conflict: Try Out Your Hypotheses and Pick a Useful Role. Employees should
be instructed on how to provide constructive criticism so they may voice their problems
in a constructive manner as opposed to letting them fester. Good feedback-givers are
curious, upbeat, honest about their feelings, specific, and ask questions. When
appropriate, they express gratitude and offer advice on how to make working
relationships better.
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 will be simulated by 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
Negotiation for the Alcohol supplier
Supplier details BWS
represented by:
Location VCI College, Moorooka.
Date 1/3/2021
Nature of negotiation e.g. pricing structure, conditions etc.

Price
Discounts for large orders
Payment terms
Details List all aspects that are to be discussed-

BWS is giving us better prices, payment terms, on time delivery and
promotional material.
Observation Criteria
Criteria 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
Supplier details ABC Food Supplies
represented by:
Location
Date
Nature of negotiation Food Quality and portion size
Details List all aspects that are to be discussed

various types of seafood products. Cut sizes for many products. Product
specifications are consistent with those of our business. Discuss the
cost-effective product's delivery timetable. The staff of the supplier
must deliver and dump the goods.
Observation Criteria
Criteria 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
Part C – Making formal agreements
1. Present the outcomes from each negotiation to your 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.
Approved Not Recommended Change

Supplier 1- BWS
Approved
Contractual detail 1
Yes N/A
Price
Yes
Promotional material
No
Quality
Yes
Payment terms
Yes
Supervisor Name
Supervisor Signature
Date
Approved Not Recommended Change

Supplier 2
Approved
Contractual detail 1 Approved
Supervisor Name
Supervisor Signature
Date
2. Based on the feedback from trainer, contact the supplier and negotiate the final changes if
required. Record the negotiated changes in the table and obtain final approval from your trainer.
Supplier 1 BWS Outcome Approved Not Approved

Details negotiated
Changes not required.
Supplier 2 Outcome Approved Not Approved

Details negotiated
One of our key requests to save time and We have the entire night to Approved
labour was for the supplier to send sliced deforest the seafood
calamari that had been cleared of trees because the supplier was
earlier. scheduled to deliver it at
closing time and there is
nowhere safe for him to do
it on these premises.
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.
Dear Mr. Manmohan
Thank you for coming in for a meeting to negotiate our alcohol contract on 1/3/2021.
Just confirming the details we agreed to- as you have promised prices as per your price list, quality
products as per our specifications, on time delivery, promotional material like coasters, beer and
wine glasses and payment terms as agreed.
As agreed, we will be meeting on the 15 th of March 2021 at 9.30am in our office to sign the
contracts.
Looking forward to a long and mutually beneficial relationship.
Kind regards
Gurpreet Uppal
Food and Beverage Manager
Hotel Futura
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 trainer for final approval.
Part C Marking Guide Checklist

SITXMGT002 Establish and conduct business relationships 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
Part A Satisfactory Not Yet Satisfactory
RESULT OF
Part B Satisfactory Not Yet Satisfactory
ASSESSMENT
Part C Satisfactory Not Yet Satisfactory
Feedback to Student:
Assessor(s) Date / /
Signature(s): :
Date / /
Student Signature
:

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ESTABLISH AND CONDUCT

Student Assessment Tool

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Assessment Summary Sheet

Assessment 1 Short Answers S | NYS | NA

Assessment 2 Project S | NYS | NA

Unit Outcome  Competent  Not Yet Competent

Student Declaration: Assessor Declaration:

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Elements of the unit

3. Make formal business agreements.

4. Foster and maintain business relationships.

The assessment for SITXMGT002 consists of:

Assessment 1 – Short Answers

Information for Students

Student Access to Records

Assessment dishonesty includes plagiarism, collusion, the fabrication or deliberate

Incidence of Plagiarism or Assessment Dishonesty

Student Signature: ............................................................... Date: ....../....../.............

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Assessment Cover Sheet

Student Signature: Date: / /20

Assessor Signature: Date: / /20

===========================================TEAR HERE ======================================

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Question 2 List 4 reasons business relationships are important.

Question 7 List 2 methods of Networking. These may be formal or informal.

debriefing session with everyone participating or sending meeting results through

Question 13 List 6 techniques to negotiate effectively.

Question 14 How do open questions help a good negotiator gain information?

Question 17 Name 3 types of common clauses which might be included in a contract.

build on that relationship?

Assessment Cover Sheet

Student Signature: Date: / /20

Assessor Signature: Date: / /20

===========================================TEAR HERE ======================================

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What will be assessed

o cooperative partner with organisation

 preparatory facts and statistics

Supplier 2: Fruit and Veg Yarra green

Supplier 3: Sea food and frozen items. Blue Oscine

 Advantages: Managers sometimes have a heavy burden; if they don't assign

 Advantages: A very basic and ancient theory of economics is parity. The

 Specific needs of your organisations (quantities, $ terms, purchasing power etc.)

Alcohol Current supplier- New supplier- Comments

 We frequently communicate with your suppliers.

 Pay the bills owed to your suppliers on time.

i. Intercultural Conflict: Be Wary of Stereotyping. We frequently strive to acquire cultural

Part B – Conducting Negotiations

Supplier details BWS

Location VCI College, Moorooka.

Nature of negotiation e.g. pricing structure, conditions etc.

Details List all aspects that are to be discussed-

Supplier details ABC Food Supplies

Nature of negotiation Food Quality and portion size

Details List all aspects that are to be discussed

Part C – Making formal agreements

Approved Not Recommended Change