L5M1 Practice Exam Questions and Answers

Thehuman relations approach to managementdeveloped in the 1930s and 1940s as a reaction against earlier mechanistic approaches such as Taylorism and bureaucracy. It emphasises that employees are not just motivated by money and rules, but also bysocial needs, relationships, and recognition. The approach highlights the importance of communication, teamwork, leadership style, and employee well-being in achieving organisational success.

The foundation of this school came from theHawthorne Studies(Elton Mayo), which showed that productivity improved not just because of physical conditions, but because workers felt valued and observed. This demonstrated the importance of social factors such as morale, group belonging, and management attention.

Key principles of the human relations approach include:

Focus on people rather than just processes– recognising employees as individuals with social and emotional needs.

Motivation through recognition and belonging– linking to theories such as Maslow’s hierarchy of needs and Herzberg’s motivators.

Leadership style matters– supportive, participative leadership fosters engagement, unlike autocratic control.

Team dynamics are critical– informal groups, communication patterns, and cooperation influence productivity.

Job satisfaction drives performance– happy, respected employees are more productive and loyal.

Advantagesof the human relations approach include higher employee engagement, improved morale, stronger teamwork, and reduced turnover. It recognises employees as assets rather than costs.

Disadvantagesinclude the risk of overemphasising relationships at the expense of efficiency or results, and the possibility of managers manipulating employees through “false concern.” It can also be less effective in highly standardised, rule-bound environments where compliance is critical.

In procurement, the human relations approach may be applied by creating strong team cohesion, involving staff in decision-making, recognising contributions, and offering development opportunities. For example, involving buyers in supplier strategy discussions and giving recognition for successful negotiations can boost morale and performance.

In conclusion, the human relations approach recognises that people are motivated by social and psychological needs, not just financial incentives. It highlights the importance of communication, leadership, and teamwork in driving performance. While it should be balanced with attention to efficiency, it remains highly relevant for modern managers in creating motivated and productive teams.

Theories of management provide different ways of understanding how organisations can be led effectively. Two important perspectives are thesystems approachand thecontingency approach. Both move beyond early “one best way” classical theories and instead highlight the complexity and adaptability required in modern organisations.

Thesystems approachviews the organisation as an integrated whole made up of interdependent subsystems such as HR, finance, operations and procurement. It is based on systems theory, seeing organisations as “open systems” that interact with their external environment. Inputs such as people, information and resources are transformed into outputs such as products, services and stakeholder value. Feedback loops are essential to monitor performance and make adjustments. The key idea is synergy — the whole is greater than the sum of the parts. For example, in procurement, sourcing decisions influence not only supplier performance but also finance (budgets), operations (continuity), and CSR (sustainability). A systems approach ensures that procurement strategies are aligned to wider organisational goals and continuous improvement.

Thecontingency approachdevelops this idea further, arguing that there is no universal way to manage. Instead, the best approach depends on situational factors such as environment, size, technology, or workforce capability. It rejects “one-size-fits-all” rules and stresses that management must adapt. For example, in a stable market, a hierarchical structure with formal rules may work well, whereas in volatile markets, flexible and decentralised decision-making is more effective. In procurement, this could mean using strict process controls for routine, low-value items, but adopting agile, collaborative approaches when managing strategic supplier partnerships in uncertain global supply chains.

In comparison, the systems approach gives managers aholistic viewof how different parts of the organisation connect and interact with the external environment, while the contingency approach emphasisesadaptabilityand situational leadership. Together, they suggest that effective managers need both a broad systems perspective and the ability to tailor their approach depending on context.

In conclusion, the systems approach stresses coordination, integration and feedback across the organisation, while the contingency approach stresses flexibility and the idea that “it depends.” Both are highly relevant to procurement and supply leaders who must integrate across functions and adapt strategies to dynamic and uncertain supply environments.

Stakeholders can exert influence over procurement decisions in different ways. French and Raven identifiedfive types of powerthat stakeholders may hold. Each has different implications for how procurement interacts with them.

1. Legitimate Power:

This comes from a stakeholder’s formal position or authority. For example, a Finance Director may require procurement to comply with budgetary controls. Procurement must respect legitimate authority but can also influence decisions by providing evidence and business cases.

2. Reward Power:

This is based on the ability to provide benefits or incentives. For example, senior management may reward the procurement team with recognition or bonuses for achieving savings. Procurement can use this positively by demonstrating performance and aligning with organisational goals.

3. Coercive Power:

This is the power to punish or impose sanctions. For instance, a project manager may pressure procurement to prioritise their project by threatening escalation if deadlines are missed. Procurement must manage this carefully, balancing demands with fairness and compliance.

4. Expert Power:

This arises from specialist knowledge or skills. For example, a procurement professional with strong knowledge of supplier markets holds expert power, which can influence strategic decisions. Conversely, technical departments may hold expert power in specifying product requirements, requiring procurement to collaborate closely.

5. Referent Power:

This is based on personal relationships, respect, or charisma. For example, a well-liked senior stakeholder may influence procurement decisions even without formal authority. Procurement must manage these situations by maintaining objectivity while leveraging strong relationships to gain support.

Comparison of Interaction with Procurement:

Legitimate poweroften requires compliance, while procurement may respond with process adherence and evidence-based justification.

Reward powercreates motivation for procurement, but risks short-term focus if overused.

Coercive powercan create conflict and stress; procurement must use negotiation and diplomacy to manage.

Expert powercan be collaborative, as procurement and stakeholders share knowledge to improve outcomes.

Referent powerrelies on trust and relationships, which procurement can use to build coalitions and support for initiatives.

Conclusion:

The five types of power – legitimate, reward, coercive, expert, and referent – shape how stakeholders interact with procurement. Understanding these power bases enables procurement professionals to adapt their approach, whether through compliance, persuasion, collaboration, or relationship-building. This ensures stakeholder management supports both procurement objectives and organisational goals.

Definition (5 points):

Alienation at work refers to a state where employees feel disconnected, powerless, or estranged from their job, their colleagues, or the organisation. The concept, linked to Karl Marx’s theory, highlights situations where workers feel that they have little control, little purpose, and no personal fulfilment in their role. Alienation often leads to low motivation, disengagement, and reduced productivity.

Five Factors that Cause Alienation (20 points):

Repetitive and monotonous work– Jobs that involve the same routine tasks every day can make employees feel like “cogs in a machine.” For example, a procurement clerk only processing invoices with no involvement in decision-making may quickly feel alienated.

Lack of autonomy– When employees have no control over how they do their work, they feel powerless. In procurement, if buyers must follow rigid procedures without input into strategy, they may feel disengaged.

Poor leadership and communication– Alienation grows when managers fail to involve employees, communicate decisions, or provide feedback. Staff may feel undervalued and excluded from organisational goals.

Weak connection to organisational purpose– If employees cannot see how their work contributes to wider goals or society, they may feel their role lacks meaning. For instance, working in a cost-cutting environment without recognition of social value or sustainability can reduce motivation.

Lack of recognition or development opportunities– When employees feel their contributions are ignored, or they see no path for growth, they disengage. In procurement, failing to recognise successful negotiations or not offering training can create a sense of alienation.

Conclusion:

Alienation occurs when employees feel disconnected from their work, leading to low morale and performance. It can be caused by repetitive tasks, lack of autonomy, poor leadership, absence of purpose, and lack of recognition. For managers, reducing alienation means creating meaningful work, involving employees in decisions, and supporting development, which leads to higher engagement and productivity in procurement and supply functions.

Procurement plays a central role in engaging with different stakeholders. Effective collaboration ensures efficiency, compliance, and value creation. The way procurement collaborates can vary depending on the stakeholder group. Two examples aresuppliersandother departments within the organisation.

Collaboration with Suppliers:

Procurement must develop strong relationships with suppliers to ensure continuity of supply, cost efficiency, and quality. This involves activities such as contract negotiation, performance monitoring, and supplier relationship management (SRM). Collaboration often focuses on building trust, sharing forecasts, and working on joint initiatives like innovation or sustainability. For example, in a manufacturing firm, procurement may collaborate with a fabric supplier to develop new eco-friendly materials. The relationship can be transactional for routine items or strategic for high-value, critical suppliers.

Collaboration with Other Departments:

Internally, procurement must work closely with functions such as Finance, Operations, and Marketing. Collaboration ensures that procurement strategies align with organisational needs. For example, Finance may require procurement to manage budgets and compliance, while Operations depends on procurement for timely materials. Collaboration may involve cross-functional teams, joint decision-making, and regular communication. For instance, procurement and product development may work together to source innovative materials that match design requirements.

Comparison:

Both collaborations require trust, open communication, and alignment of goals.

With suppliers, collaboration often focuses externally on securing value and innovation. With internal departments, it focuses on aligning procurement activity with business objectives.

Supplier collaboration may involve formal tools like contracts, KPIs, and SRM frameworks, whereas internal collaboration relies more on teamwork, communication, and shared processes.

Contrast:

Suppliers are external stakeholders, so procurement must manage risks, legal compliance, and negotiation dynamics. Internal departments are internal stakeholders, requiring influence, persuasion, and partnership.

Supplier collaboration aims at building long-term external relationships; internal collaboration ensures smooth workflows and organisational efficiency.

Conclusion:

Procurement collaborates with both suppliers and internal departments, but the focus differs. Supplier collaboration is about external value creation and innovation, while internal collaboration is about aligning processes and achieving organisational goals. Successful procurement professionals adapt their approach to meet the needs of each group while ensuring overall business success.

The Taylorism school of thought, also known asScientific Management, was developed byFrederick Winslow Taylorin the early 20th century. It aimed to improve efficiency and productivity by applying systematic, scientific methods to the management of work. Its key principles can be summarised as follows.

The first principle is thescientific study of work. Taylor rejected traditional “rule of thumb” methods, instead advocating time-and-motion studies to identify the most efficient way of completing tasks. This broke jobs into smaller, measurable steps.

Secondly, Taylor emphasised thedivision of labour and specialisation. Workers should focus on narrowly defined tasks, allowing them to become faster and more efficient, similar to parts in a machine.

Thirdly, he argued forscientific selection and training of workers. Instead of leaving workers to train themselves, managers should select the right person for the job and provide formal training in the “one best way” to complete tasks.

Fourthly, Taylor stressedmanagerial control and supervision. He believed management should plan, organise and set methods, while workers should focus on carrying them out. This created a strong separation between planning and execution.

Finally, Taylor promotedfinancial incentives as motivators. He assumed that workers are primarily motivated by pay, so piece-rate systems and performance-based rewards were used to encourage higher output.

Taylorism brought many benefits, such as increased productivity, efficiency, and predictability in mass production industries. However, it also attracted criticism for treating workers like machines, reducing autonomy, and ignoring social and psychological needs. From a modern procurement perspective, its ideas are still visible in standardised processes such as purchase-to-pay systems, KPIs, and efficiency-driven shared services. However, organisations today often balance these principles with more human-centred approaches to motivation and teamwork.

In conclusion, the key principles of Taylorism were scientific analysis of work, specialisation, scientific selection and training, strict managerial control, and financial incentives. While its focus on efficiency shaped early management thinking, modern leaders must also consider motivation, empowerment, and adaptability to achieve sustainable success.

The lifecycle of a group is often described usingTuckman’s Five Stages of Group Development. This model explains how groups evolve over time, moving from initial formation to effective performance. The five stages are as follows:

1. Forming:

At this stage, the group is coming together for the first time. Members are polite, cautious, and uncertain of their roles. There is little conflict, but people look to the leader for guidance. For example, a new procurement project team might be established to source a new supplier. At this point, roles are unclear, and members rely on the manager to set objectives.

2. Storming:

As individuals begin to assert themselves, conflict often emerges. Differences in working styles, personalities, or priorities can lead to tension. In procurement, this might involve disagreements between finance and operations about whether to prioritise cost savings or quality. The leader’s role here is to manage conflict and keep the team focused on objectives.

3. Norming:

Once conflicts are resolved, the group begins to establish shared norms, values, and ways of working. Roles and responsibilities become clearer, and collaboration improves. In a procurement context, the team may agree on supplier evaluation criteria and work more cohesively to achieve sourcing outcomes.

4. Performing:

The group is now fully functional and works effectively towards its goals. Members trust each other, communication flows well, and productivity is high. For example, the procurement team may now run tendering processes efficiently, negotiate with suppliers, and deliver strong results with minimal supervision.

5. Adjourning (or Mourning):

When the task is complete, the group disbands. This can cause feelings of loss for members who valued the team, but it also creates an opportunity to reflect on lessons learned. In procurement, this could involve completing a sourcing project, closing supplier contracts, and disbanding the cross-functional team after a lessons-learned review.

Conclusion:

The five stages of group development – forming, storming, norming, performing, and adjourning – describe how teams evolve over time. Understanding this lifecycle helps managers support their teams at each stage, managing conflict in storming, reinforcing collaboration in norming, and maximising results during performing. In procurement, applying Tuckman’s model ensures that cross-functional teams move quickly from formation to high performance, delivering greater value to the organisation.

Conflict is common in organisations and in procurement, where competing priorities, supplier issues, and internal pressures often clash. TheThomas-Kilmann Conflict Modelidentifies five different approaches managers may use to handle conflict, depending on the situation and the desired outcome.

The first approach isCompeting (high concern for task, low concern for people). Here the manager asserts their own position to achieve quick results, even at the expense of relationships. For example, a procurement manager may insist on enforcing compliance with tendering rules despite stakeholder resistance. This is effective in crises but can harm morale if overused.

The second isAccommodating (low concern for task, high concern for people). In this style, the manager prioritises relationships by giving way to the other party’s needs. For instance, a procurement manager might accept a stakeholder’s preferred supplier to maintain goodwill, even if it is not the cheapest option. This preserves harmony but risks poor business outcomes if used too often.

The third approach isAvoiding (low concern for both task and people). Here, the manager withdraws from the conflict or postpones action. This may be appropriate when the issue is minor or when emotions are high, giving time for reflection. However, in procurement, avoiding conflict with a poor-performing supplier may worsen problems over time.

The fourth isCollaborating (high concern for both task and people). This involves working with others to find win-win solutions. For example, a procurement manager may work with finance and operations to balance cost, quality, and sustainability objectives in supplier selection. This is often the most effective approach but requires time and trust.

Finally,Compromising (medium concern for task and people)involves each side giving up something to reach a middle ground. For instance, a procurement manager may agree to split supplier contracts between two stakeholders’ preferences. This provides quick solutions but may leave all parties partially dissatisfied.

Conclusion:

A procurement manager can approach conflict through competing, accommodating, avoiding, collaborating, or compromising. Each has strengths and weaknesses. The best managers adapt their style depending on the importance of the issue, the urgency of the decision, and the relationships involved. In procurement, collaboration often delivers the most sustainable results, but flexibility across all five approaches is key.

Part A – Three Ways a Procurement Professional Could Be Biased (15 marks):

Personal Relationships / Conflicts of Interest:A buyer may favour a supplier due to friendship, family connection, or long-standing personal ties. For example, awarding a contract to a supplier owned by a relative, even if another supplier offers better value. This undermines fairness and can damage organisational reputation.

Preference for Incumbent Suppliers (Status Quo Bias):Professionals may repeatedly select the same suppliers simply because they are familiar, ignoring new entrants who could provide better innovation, cost savings, or sustainability. This limits competition and supplier diversity.

Cultural or Geographical Bias:A procurement professional may favour local suppliers over international ones, or show unconscious bias against suppliers from certain regions. While local sourcing can have benefits, excluding other suppliers without objective evaluation reduces fairness and potentially increases costs.

(Other possible biases include brand preference, ignoring SMEs, or favouring suppliers who provide personal benefits – but only three are required for full marks.)

Part B – Benefits of Remaining Unbiased (10 marks):

Remaining unbiased means making supplier decisions based on objective, transparent, and fair criteria such as cost, quality, delivery performance, risk, and sustainability. The benefits include:

Fairness and Transparency:All suppliers have equal opportunity, protecting the organisation’s integrity and compliance with regulations.

Best Value for Money:Objective evaluation ensures the chosen supplier offers the best mix of cost, quality, and service.

Encouraging Innovation:By considering a wider pool of suppliers, procurement can benefit from new ideas and technologies.

Ethical Compliance:Avoids corruption, fraud, or bribery, maintaining alignment with the CIPS Code of Conduct.

Reputation and Trust:Stakeholders and the market see the organisation as professional and ethical, which strengthens long-term supplier relationships.

Conclusion:

Procurement professionals may show bias through personal relationships, favouring incumbents, or cultural preferences. Remaining unbiased ensures decisions are fair, transparent, and ethical, leading to better value, innovation, and stronger supplier trust. This supports both organisational objectives and the professional standards of procurement.

A psychological contract refers to the unwritten and informal expectations that exist between employer and employee, beyond the formal employment contract. It is built on perceptions of fairness, trust, and mutual obligation. For example, an employee may expect career development, recognition and fair treatment, while the employer expects loyalty, commitment, and discretionary effort. Unlike a legal contract, it is subjective, evolving, and deeply influenced by organisational culture and management behaviour.

Several factors influence the strength of the psychological contract. Leadership style is crucial: a participative, empowering approach helps employees feel valued, while autocratic or inconsistent leadership weakens trust. Organisational culture also plays a role; a supportive, ethical culture creates fairness, whereas a toxic or discriminatory environment erodes confidence. Communication is another factor – transparent and honest messages during performance reviews or organisational change maintain alignment of expectations, whereas misinformation or silence damages the relationship. Reward and recognition are key, since inconsistencies in promotion or pay may create perceptions of unfairness. Work–life balance and flexibility also matter, particularly in modern hybrid workplaces. Finally, opportunities for development such as training, mentoring, or exposure to new projects sustain the sense of reciprocal value between employer and employee.

Employers can take several steps to protect the psychological contract from being broken. Firstly, clear communication of job roles, objectives and expectations reduces misunderstandings. Fair and consistent treatment across employees ensures equality and avoids resentment. Involving employees in decision-making through surveys or consultation gives them a voice and strengthens commitment. Employers should also invest in people through coaching, mentoring and career development pathways, demonstrating a long-term interest in their growth. Recognition of achievement, both financial and non-financial, reinforces the sense of value. When organisational changes occur, managers should follow good change management practice, such as Lewin’s three-step model or Kotter’s stages, to ensure transparency and inclusion. Finally, ethical and values-driven leadership is vital, as trust is easily broken if managers behave dishonestly or fail to live up to organisational values.

For example, in a procurement setting, if a buyer is promised involvement in international supplier negotiations but never receives the opportunity, the psychological contract is broken, potentially leading to disengagement or resignation. Employers can prevent this by giving realistic job previews, following through on commitments, and offering development opportunities aligned to employees’ expectations.

In conclusion, the psychological contract is a powerful but fragile element of the employment relationship. It is influenced by leadership, culture, communication, rewards, and development opportunities. By maintaining fairness, clarity, recognition, and open dialogue, employers can protect and strengthen this contract, leading to higher engagement, motivation and retention of talent.