A STUDY OF IMPACT OF EFFECTIVE NEGOTIATION IN REALIZATION OF PROCUREMENT GOALS IN REDEEMER’S UNIVERSITY

Private Universities in Nigeria have a relentless goal of keeping their procurement cost down as most of them depend solely on tution fees. In the past, companies would mostly look to make cost-savings from headcount reductions or internal re-organisation. Now they are increasingly turning to procurement and strategic sourcing as a means for cost reduction in procurement. The study examined the impact of effective negotiation in realization of procurement goals in Redeemer’s University. The research was conducted through the use of self-administered questionnaire to obtain primary data. The study had sample size of 206. Purposive sampling technique was used to select respondents that are involved in procurement for the University for the Study. Descriptive analysis and linear regression analysis were used in analyzing the obtained data. The results indicated that effective negotiation is a strong procurement strategy in Redeemer’s University and has a significant impact in realization of procurement goals. The study concluded that Redeemer’s University procurement goals are realizable with effective negotiation strategy.


Introduction
According to Chipiro (2009) the procurement and supply activity of organisations is one which spans both internal service and business-to-business services. This is an important activity found in all organisations, public, private, governmental and charities and can be responsible for a large amount of spending. Such spending on, for example, materials components, facilities, subcontract capacity, IT equipment and supplies, consumables, stationery, travel and insurance can constitute a significant amount of money. Most organisations spend at least one-third of their turnover/income on the purchase of goods and services (Zenz and Thompson, 1994 andKillen andKamauff, 1995).
To develop an effective procurement strategy or sourcing strategy, first it is necessary to sit down to assess the details that you have to work with. These details will include the business' or project's objectives, the available and existing resources and supplies, the budget and the timeline. Through the assessment of these elements, the team would be able to start planning for an effective procurement strategy that would be as custom-made as possible for the company; the key here is to make sure that every detail of the plan would contribute towards attaining the company's established goals and objectives. A good question to ask would be, "Why are we purchasing this equipment?" The answer must be in accordance with the company's goals.
Another key item that would be planned for during this brainstorming stage would be the choices of either making or creating the materials (or doing procurement outsourcing) with the costs and sustainability being the major determining factor, and whether the existing company resources would be able to support the decision over a long period of time.
The representation of the strategic procurement can be described in terms of its environment and structure, and what activities take place in the supply link. General performance indicators of the supply link in terms of time, quality, flexibility and cost are used to measure efficiency and effectiveness. The efficiency in the supply link explains how well the resources are utilized. Since resources are scarce, it is in everyone's interest in the organization to maximize the utilization of the resources. The effectiveness of the supply link explains how well the objectives are achieved (Arun and Linet 2005).
The aim of this research was to examine the impact of effective negotiation in realization of procurement goals in Redeemer's University.

Agency Theory
This study is based on Agency theory. Agency theory attempts to describe the agency relationship, in which one party (the principal) delegates work to another party (the agent), who performs that work (Eisenhardt, 1989). Two problems can arise in such relationships, the desires and goals of the principal and agent can conflict, and it is difficult for the principal to verify what the agent actually is doing. Principal-agent researchers are concerned with a general theory of the principalagent relationship, a theory that can be applied to employer-employee, buyer-supplier and other agency relationships. Agency theory is most relevant in situations in which contracting problems are difficult. These include situations in which there is a substantial goal conflict between principals and agents and sufficient outcome uncertainty to trigger the risk implications of the theory (Eisenhardt, 1989). Eisenhardt discusses the assumptions of the theory and raises the issue of principals learning about the agents when there is a long term relationship, when there may be less need for outcome-based contracts. This may be more the case with procurement in the private sector, where there are fewer regulations than in the public sector, and where tendering is not required. Private businesses are free to have long term relationships with software developers and consulting firms. Jones (1995) suggests that long term relationships with vendors may in the long run lead to higher effectiveness, due to the stability of the relationship being dependent on controlling goal conflicts. Sharma has extended the agency theory and focuses on the principal-professional relationship, where professionals can include consultants (Sharma, 1987) According to Sharma (1987), there are some specific distinctions of the principal-professional agency exchange. The greatest is the power asymmetry. In an owner-manager or manager-worker relationship, the principal have the power to design and enforce contracts and hence the power to enter or to dismiss incentives for the managers and the workers. In contrast, principal-professional exchanges are inherently those in which professionals have the power over lay principals by virtue of their expertise, functional indispensability, and intrinsic ambiguity associated with the services they provide. It also involves a considerable information asymmetry; the principal does not only not know how the professional agent does the job, but also not what he or she does. This information asymmetry also makes it difficult for the principals to know beforehand how much service is actually needed.

Procurement Strategy
David (2009) noted that the meaning of procurement and purchasing is very similar, but people have moved to a different wording to identify a change in the organisation. A few years ago, it was known as purchasing, but, consciously changed to procurement. One way of getting people's attention to this was to change the name. But having done that, purchasing, by definition becomes the transactional piece and procurement becomes the strategic piece. Supply chain management is a procurement tool that was born out of necessity.
Demands for newer and more innovative goods and services, limits on resources, and the increasingly complex, interrelated nature of the global market place have each created pressure on public managers to optimize new and innovative process methodologies to meet procurement needs (Korosec, 2003).
Supply chain management has strategically integrated the whole procurement process, including the "identification, acquisition, access, positioning, and management of resources" in a series of carefully considered steps, in order to attain stated objectives (Duffy, 2002).Similarly, according to Smeltzer (2003), purchasing functions are not just the matter of price and delivery time, but they are aligned with the organization's long term goals. Furthermore, Smeltzer (2003) also argued that in order to complete firm's strategic goals, selecting the right suppliers to ensure their dependable and flexible supply is one of purchasing management objectives. Procurement or better still, Purchasing (as sometimes used), is one of the basic functions common to all types of business enterprises.
The procurement process is viewed as involving sourcing (planning: needs identification and assessment, supplier selection) contracting, monitoring and evaluation, and expediting; based on the model definition by (Van weel, 2002).

Effective Negotiation
Negotiation in the real world is a complex process (Thompson 2000). Negotiation can happen in a variety of ways: in personal lives, in business and government, and in international diplomacy. (Kim and Segev 2005). Furthermore, negotiation is a critical aspect of purchasing and supply chain management. As the business environment becomes more dynamic, negotiations between partners are required more often (Cerquides and Sanchez 2008). Furthermore, Sheer and Chan (2003) pointed out that business negotiators need to be knowledgeable in certain areas of business such as management, product quality, technical specifications, equipment procurement and deployment, and distribution and supply networks, in order to ensure that negotiation with trading partners can be undertaken effectively. Negotiation is a process of joint decision-making in which people with different preferred outcomes interact with each other in order to resolve their differences (Thompson 2000). Negotiation becomes a key decision-making approach used to reach consensus whenever the partners cannot achieve their business goals (Thompson 2000). Brett (2000) argued that while discussing the concept of negotiation, it is important to understand that negotiation involves certain types of criteria. These criteria include: • Direct confrontation -Negotiation can involve direct confrontation, either face-toface, electronically, or through agents or intermediaries. • Types of negotiation -Negotiations may be transactional with buyers and sellers, or can be directed towards the resolution of conflict or disputes. • Distributive and integrative agreements -These two types of agreements are related to the type of negotiation chosen, and are the result of transactional or conflict resolution negotiation, or may be purely distributive or integrative agreements. • The process that leads to distributive and integrative agreements -In order to understand the negotiation process that leads to distributive and integrative agreements, there is a need to understand how information is used during negotiation. Monczka et al. (2004) noted that Negotiation is an ultimate value to implement the purchasing strategies that an organization developed. Negotiation will be used as a path to bridge the gaps between purchaser and supplier. It is important to have well developed negotiating strategy with tactics as a foundation to support that strategy. In cooperative negotiation, buyer-supplier negotiate creates win-win situation in order to decide the ways to divide and share the extended value pie. Ramsay (2004) noted that negotiation process is crucial of managing differences in business relationships between buyers and suppliers in supply chains. Negotiation can be break down to two major approaches. One of the approaches is cooperative negotiation which emphasizes on win-win formula between both parties involve in negotiation process. This is genuine integrative bargaining whereby both parties assumes that all aspects of their interest been taken care well in order to maximize their cooperative value and benefit. Another approach of negotiation called competitive negotiation which is genuine distributive and adverse towards common understanding. This approach focus on individual interest whereby each party attempt to maximize the self gain through aggressive cost competition tactics, enforce time pressure, lack of flexibility and threatening lost of business in order to gain advantage against the other party.
As discussed by Janda and Seshadri (2001), cooperative negotiation cultivate win-win formula which able to increase supplier loyalty and improve supplier relations as all parties involved strongly believed, satisfied and agreed with mutual understanding and their common interest well protected.
It is important that both parties investigate the goal of the deal and things need to be achieved through the intended deal in order to create effective negotiation. Effective negotiation should be able to create confidence to supplier that long term business opportunity is possible for them to undertake any capital investment (Ashcroft, 2004). However, this required high level integrity on both sides which enable accurate exchange of confidential information.
There are two approaches to business negotiation, which include the distributive and the integrative approaches. The term "distributive negotiation" is used interchangeably with the terms "competitive", "win-lose" or "transactional negotiation", and the term "integrative negotiation" is used interchangeably with the terms "win-win", "collaborative" or "relational negotiation" (Mavious et al. 2006). Within distributive negotiation, businesses will take the approach where negotiation is a competition between each other, with one party gaining and one party losing. In contrast, the integrative approach is not a competition between businesses, and both parties should be a "winner" as a result of this negotiation (Mavious et al. 2006). The distributive approach is characterised by the perception that the issues under negotiation are fixed, whereas the integrative approach is characterized by the perception that the issues under negotiation are not fixed (Mavious et al. 2006). The negotiation approach selected by businesses will assist them in dealing with trading partners. Either approach selected by the business will have an influence on the matters that may arise during the business negotiation, such as the development of trading relationships and the qualification of suppliers (Bichler et al. 2001). Brett (2000) explained that a negotiation process is a form of social interaction by which two or more parties try to resolve perceived incompatible goals. In addition, Bichler et al. (2003) explained that the negotiation process must consider all the rules that define the negotiation arena, which can include the agenda and the permissible decision-making and communication activities of the negotiators. This is referred to as a negotiation protocol (Bichler et al. 2003). Depending on the negotiation protocol, the negotiation structure can be divided into three levels: unstructured negotiation, semi-structured negotiation, and structured negotiation (Bichler et al. 2003): 1) Unstructured negotiation does not follow any protocol allowing for exchanges that do not conform to any rules (for instance, face-to-face negotiation); 2) Semi-structured negotiations follow certain rules but the protocol is not fully defined, allowing the participants to have some flexibility in their decision-making and information exchange activities (for instance, negotiations can be supported by a negotiation support system); 3) Structured negotiations follow a set of rules that fully define the parties' decisionmaking and allowable activities (for instance, auctions). Most traditional negotiations are conducted face-to-face, while others are conducted using mail, fax and telephone (Bichler et al. 2003). Traditional negotiations are based on bilateral, multilateral or multi-bilateral negotiations over a single issue or group of issues, and they involve cooperation or competition amongst the negotiation agents (Bichler et al. 2003). Traditional negotiations are rarely completely structured, and they are comprised of negotiation situations in which haggling, bartering and tendering take place (Bichler et al. 2003). One of the most popular traditional negotiations is bilateral bargaining, which involves two parties who compete or cooperate in order to compromise on an issue. The following section discuss further on the patterns of negotiation in procuring goods and services. Effective negotiation and communication able to foster good business relationship with supply chain partners.

Research Methodology
The target population comprised of all Senior Staff in Redeemer's University totaling 281. The study population comprised of senior staff in procurement related committees and department of the University. of committees and department that are involved in procurement for Redeemer's University were purposively chosen for the study.
The study used primary data which was collected through the use of questionnaire which contained questions on social-economic characteristics of respondents, procurement strategies and realization of procurement goals. The questionnaire provided adequate data for the assessment of impact of effective negotiation on the realization of organizational goals in Private University. A 5 points Likert scale questionnaire was used. The Likert measures the level of agreement or disagreement. Likert scales are good in measuring perception, attitude, values and behaviour. The Likert scale has scales that assist in converting the qualitative responses into quantitative values (Mugenda & Mugenda, 2003). The questionnaires were purposively administered to the senior staff members of Redeemer's University that are involved in procurement using a drop and pick later method.
Cronbach's alpha test was used to assess the internal consistency of the entire scale specified for this study. According to Pallant (2004), reliability scores equal to or greater than 0.70 are acceptable and indicate the validity and internal consistency of the variables which an instrument measures.
Descriptive Statistics was used to analyze the effective negotiation strategy of Redeemer's University. Linear regression analysis was used to analysis impact of effective negotiation in realization of procurement goals in Redeemer's university.

Data Analysis and Findings
The sample size was 206 Senior Staff of Redeemer's University; however, the duly completed and returned questionnaires were 103 which convert to 50% response rate. According to Mugenda and Mugenda (2003) 50% response rate is adequate for analysis. This is further supported by Creswell (2003) who provides guidance that a 40% response rate is adequate.  Table 5.1 presents level of membership of purchasing related committee of the respondents. The findings indicated that most of the respondents are in different purchase related committe. This explains the high level of involvement of the respondents in procurement for the university.

Linear Regression Analysis of the impact of Effective negotiation in realization of procurement goals
The model used to link the independent variable to the dependent variables was Y = a + bX, where X is the independent variable and Y is the dependent variable. The slope of the line is b, and a is the intercept (the value of y when x = 0). Y represent realization of procurement goals while X represents effective effective negotiation. Regression of coefficients results in Table 5.3 shows that there is a positive relationship between effective negotiation and realization of procuement goals whose beta coefficient is 0.802. The results from the table indicate that effective negotiation had a statistically significant impact in realization of organizational goals as it had a probability of 0.000 which is lower than the probability conventional of 0.05. Results indicate that a unit change in effective negotiation variable will lead to a positive change in realization of procurement goals.  Table 5.4 shows that effective negotiation satisfactorily explains realization of procurement goal. This is supported by coefficient of determination also known as the R square of 14.2 %. This means that effective negotiation variables explain 14.2% of the variations in the dependent variable which is realization of procurement goals. This results further means that the model applied to link the relationship of the variables was satisfactory.  (2017) The reported p value was less than the conventional probability of 0.05 significance level as presented by the ANOVA statistics on Table 5.5; it indicates that the overall model was statistically significant. These results imply that the independent variables are good predictors of realization of procurement goals. This was supported by an F statistic of 16.775 and probability (p) value of 0.000

Summary of the Findings
The findings indicate that effective negotiation is a significant procurement strategy in the University with an overall mean score of 3.88 which means that more respondents agreed with the questionnaires statement.
The findings reveal that there is a positive relationship between effective negotiation and realization of procurement goals whose beta coefficient is 0.802. The results also indicate that effective negotiation had a statistically significant impact in realization of procurement goals as it had a probability of 0.000 which is lower than the probability conventional of 0.05.

Conclusion
The study concluded that preparation prior to negotiation impact positively on the outcome, preknowledge of suppliers costs, delivery and delivery time makes negotiation effective. Suppliers should be categorized based on their capacity for effective negotiation. Both parties must win in negotiation and negotiation works better when focus is on agreement rather than differences and team based approach to negotiation is better than individual approach. Effective negotiation has an impact in realization of procurement goals. From the results it is evident to conclude that the procurement goals are realizable with the effective negotiation strategy.

Recommendations
The study recommends that university procurement goals could be realized using procurement strategies such effective negotiation. Companies had tried to make savings from staff reductions or internal re-organisation. Now they are increasingly turning to procurement and strategic sourcing as a means for cost reduction. When they do, they find that by analysing and rationalising their external spending, they can make considerable savings and consequently achieve their procurement goals. The university management should sensitize the university community on the various procurement strategies and procurement goals of the University as stated in the university tender board (Oguntola, 2017). The University should maintain continuous improvement on effective negotiation to allow for good structure for procurement management. This structure will reduce wastage. Monczka et al. (2004) noted that Negotiation is an ultimate value to implement the purchasing strategies that an organization developed. Negotiation will be used as a path to bridge the gaps between purchaser and supplier (Oguntola, 2017).
Finally, the study recommends that university should organize regular training and seminar on procurement goals and procurement strategies for all staff involved in procurement in the university both at the departmental or committee level. Staff training is another key strategy in realization of organizational procurement goals (Oguntola, 2017).

Areas of Further Research
The gap created by this study that other researches or academic students can address includes impacts of other procurement strategies, not examined in this research, in realization of organizational goal in a Nigeria private university, this study concentrated on effective negotiation.
Further research could also be carried out on impact of procurement strategies in realization of organizational goals in a public university or a non-academic organization.
Other further research could also be on comparative studies of procurement strategies in private universities in Southwest Nigeria.