When the Contract with One of Their Major Suppliers Was

question 1

Multiple Choice

When the contract with one of their major suppliers was about to expire, the management of Pierre and Collins began seeking tenders from potential vendors. One of the top management executives, Todd Hughes, wanted the contract to go to a vendor he personally knew. In order to do so, he held separate discussions with two key members of the organization wherein he downplayed the potentials of the competing tenders and convinced them to support this offer. At the meeting to finalize a supplier, Todd and his supporters strongly supported the tender of the supplier they had chosen amongst themselves and convinced their CEO to hire this supplier despite the higher price quoted by him. Which of the following power tactics is being used here?

• A) ingratiation
• B) legitimacy
• C) coalition
• D) pressure
• E) inspirational appeals

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Definitions:

Variable Expenses

Expenses that vary directly with changes in production volume or business activity levels.

Fixed Expenses

Costs that do not vary in the short term, regardless of the level of goods or services produced by the business.

Actual Sales

The total revenue a company generates from selling its goods or services, as opposed to projected or forecasted sales.

Contribution Margin Ratio

A measurement that shows the percentage of sales revenue that exceeds variable costs, indicating how much contributes to fixed costs and profits.