A CRITICAL ANALYSIS OF NEGOTIATION AS A VITAL TOOL TO EFFECTIVE BUYING IN A CONSTRUCTION COMPANY.

CHAPTER ONE                                    

INTRODUCTION

By no means can all purchases and suppliers matter be dealt with by correspondence and telephone. It is therefore a necessity that face to face •counters sometimes take place to resolve problems and differences which id be overcome by negotiation.

This research work looks at negotiation as an important tool in ensuring effective buying in a construction company.

It is important to recognize that the primary task of purchasing manager in fulfillment his role of maintaining suppliers is through effective negotiation.

The purchase manger should be a specialist in satisfying the needs of the company by seeking suitable sources of supply and negotiating to secure the best terms and service possible negotiation is necessary whenever it is require reconcile two or’ more different opinion in order that action “may be initiated continued  in mutual  agreed condition.

It is very important that all buying and selling transaction leave both parties satisfied and hence negotiation is not forcing and unwilling acceptance.

Though negotiation is complex and costly, but it is use for primarily for naira value purchase. For high Naira value purchases, where five criteria which dictate competitive bidding prevail. Though competitive bidding is only used to narrow down the number of supplier which implies dealing with a few successful bidder.

1.2      HISTORICAL BACKGROUND

Bulleting Construction Company limited is a duly registered company. In corporate in Nigeria in 1989, the company which is owned by both indigenous and foreign partners has operated responsibility with the lanes of Nigeria.

The company’s head office is in Ilorin the Kwara State Capital with branch offices all over the Federation from Kogi State to Deltal State, from River State to Bauchi state and making further rapid cursion into other state of the Federation.

As a responsible specialized corporate entity with a group of highly responsible indigenous and foreign technical crew, the company has had the honour of handling numerous construction Works both within and outside the state. The company future is very promising as this can readily be assessed through its many tangible and intangible assets.

Despite the present economic downturn in the country which has forced many organizations out of the business the company still forging a head with work force about (679) six hundred and seventy nine workers, of this number (674) six hundred and seventy four are Nigerians.

However, the staffs of the company are well pay and motivated hence the company has contributed into small measure to social economic development ‘Nigeria.

This analysis has become imperative to show the Nigerian government that Bulletine Construction Company is a well established responsible corporate body operating with in the frame work of the Nigeria law.

1.3      STATEMENT OF THE PROBLEM

Negotiation with suppliers is one of the most important functions of purchasing department. The success or failure of an organization depends largely on the effectiveness and efficiencies of the buyers to negotiate with suppliers on terms and conditions of the contract such as price, quality, delivery services etc. However investigations have shown that the purchasing departments of the company are not given free hand to operate in the procurement of materials for the organization. Though the role of buyer in any organization is to contribute immensely to the profitability and realization of objectives of the organization. But during the economic recess the market becomes unsuitable a fluctuation in prices. A very good example is what is happening currently in Nigeria with reference to deregulation of Naira as a result of which purchasing power of Naira was drastically reduced.

The activities of buyer in this situation become need with

i)  What Procurement procedure could be applicable for this situation? And this could include any of the following

1. Speculative purchase
2. Hand to mouth purchase
3. Spot purchase
4.  Time budgeting of purchase

1. How to obtain the right quality and quantity of goods at the right times?
2. How can (he right or fair price could he achieved?
3.  How could the right materials or goods he gotten from this right source or location?

1.4      SCOPE OF THE STUDY

    The research work will cover a broad area in purchasing operation and procurement procedure in organization.

It entails the following specific area which the research would like to emphasize upon in the course of writing the project. These include contract negotiation supplier relationship and others, buyer’s role in negotiation, objective of negotiation, creating conducive environment during the course of negotiation. In consolidation with the above areas the research or will give various definition of terminology used in the course of the project work.