CHAPTER ONE
1.0 INTRODUCTION
1.1 GENERAL OVERVIEW OF THE STUDY
Negotiation is seen as a vital element as well as one of the most interesting topic in purchasing and supply chain management. It applied in purchasing so as to arrive at a fair and reasonable business contract.
Consequently, upon recent shortages of materials, high prices and galloping inflation, general unfriendly supply market as well as the get-rich quick syndrome of some supplied it will be suicidal for a business firm and indeed government agencies to ignore negotiation exercise in its purchasing activities making process of planning, reviewing and analyzing used by the buyer and seller to reach acceptable agreement or compromise on all aspects of the business transaction. (Lee
In purchasing of material, some measures of trust exist between the buyer and the seller when negotiation begins identically, there would be equally of information on cost and estimates between parties involved, as a basis for negotiation, but this is rarely attained except in government’s research and development (R and D). The negotiation is thus usually a dialogue between the buyer and seller to produce a contract, which is at least acceptable to both parties.
1.1.1 BRIEF HISTORY OF THE COMPANY
The name of the company is Rokana Industries Plc Nekede and it as incorporated on September 1978 as a private limites liability company.
The nature of the business is manufacturing and it was founded by Engr. Charles Ugwu, a British trained industrialist/Engineer in 1978.
The managing-Director is Chief Ekemma Geophry now while Engineer Charles Ugwu is the Chief Executive of the company.
The factory is divided into three basic areas namely: Administration, Marketing/sales and promotion. It has a branch in Lagos as their registered street off 52 Ogundana street Allen Avenue Ikeja Lagos. Over 80% of the raw materials for the production of the product are imported.
They also have sales outlets in Abuja, Kaduna, and Lagos. The company is hundred percent Nigerian owned while Union Bank Nigeria Plc own 40% shares of the company product produce.
Rokana currently maintains four existing manufacturing units.
1. The Cosmetic Units: This unit undertakes the production of the tooth paste, baby-care cosmetics, skin lotions, cream and oiltment.
2. The Plastic Units: This unit produces tooth brush, dental stick, plastic folders, plagues for the Areosol production.
3. Aerosol Unit: This unit produces insecticide air fresheners, perfumes, furniture polish, deodrant etc.
4. The LPG Unit: This unit refills domestic cooking gas cylinder, provides unstauncheal gas,as propellant to the aerosol production line.
1.5 STATEMENT OF PROBLEM
Strictly, this project is a case study of the impact for efficient negotiation in purchasing function in manufacturing company at Rokana Industries Limited Nekede Owerri Imo State.
The impact for efficient negotiation in purchasing function in manufacturing company can not be over stated. This is because when fairly in contract management result from poor negotiation.
The problem of the study therefore are as follow:
1. Firms or organization fair to see the element of pricing and negotiation as a vital element in contract management.
2. Most firms adopt the concept of I will” when you loose attitude this result into poor project execution.
3. Most people involving in purchasing of capital and mangement do not possess the right skill and knowledge of negotiation.
4. The economic situation of the country has serious effect on the quality of negotiation purchasing function in manufacturing company firm attempt.
5. There is no serious attempt on the part of firms to empower negotiation contract managers.