Free Practice Questions for CIPS L5M1 Exam

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.

Formal vs Informal Groups (10–12 marks):

Formal groups are those deliberately created by management to achieve organisational objectives. They have defined structures, roles, and reporting lines. In Star Fish Ltd, examples include theProcurement Team, responsible for sourcing suppliers and managing contracts. This group has clear goals, formal leadership, and measurable outputs.

By contrast, informal groups arise naturally among employees based on social interactions, common interests, or personal relationships. They are not officially sanctioned but strongly influence behaviour. At Star Fish Ltd, an example could be afitness clubof employees who exercise together during breaks or aWhatsApp groupamong remote workers who support each other socially. These groups provide belonging and morale but may also resist management decisions if excluded.

Factors Influencing Group Formation (12–15 marks):

Common goals and tasks– People working on shared objectives, such as the Product Development Team working on new gym equipment, naturally form groups.

Geography and work arrangements– Staff working remotely may form virtual support groups, while office-based staff bond more through daily interactions.

Shared interests and values– Employees passionate about fitness or sustainability may form informal networks within the company.

Friendship and social needs– Based on Maslow’s hierarchy, people seek belonging. Friendships often develop into informal groups.

Leadership and influence– Charismatic or respected individuals may attract followers, leading to informal group formation around their personality.

Organisational culture– A collaborative culture encourages group formation for teamwork, while a competitive culture may create cliques or rival groups.

Technology and communication platforms– With remote work, online groups (Teams, Slack, WhatsApp) facilitate informal interaction and knowledge sharing.

Conclusion:

At Star Fish Ltd, formal groups like the Procurement Department are designed to deliver organisational objectives, while informal groups such as fitness clubs or virtual chat groups form naturally. Caleb must recognise that both types of groups are powerful. Formal groups deliver results, but informal groups influence morale, motivation, and resistance to change. By understanding the factors driving group formation, Caleb can harness both to build cohesion, encourage collaboration, and support the organisation’s success.

Groups are an essential feature of organisational life. A group can be defined as two or more individuals who interact and work together to achieve a purpose. Groups may be formally created by management or may form informally through social interaction. There are several reasons why groups form in organisations.

The first reason istask and goal achievement. Formal groups are created to achieve organisational objectives that require collaboration. For example, in procurement, a cross-functional sourcing group may be formed to run a tender process involving operations, finance, and procurement staff. Individuals form these groups because working together helps them achieve outcomes that they could not accomplish alone.

The second reason issocial and psychological needs. According to Maslow’s hierarchy of needs, people seek belonging and relationships. Informal groups often form to meet these needs, providing friendship, support, and a sense of identity. In Star Fish Ltd, for instance, employees working remotely may form a social group using Teams or WhatsApp to stay connected and reduce feelings of isolation.

The third reason issafety and security. Groups can give members confidence and protection when facing uncertainty or change. For example, during organisational restructuring, employees may form informal groups to share information and support each other, making them feel less vulnerable. In procurement, staff may collaborate in groups to manage supplier risks or market volatility.

The fourth reason ispower and influence. Groups provide individuals with a stronger collective voice. Trade unions are a formal example, but informal groups can also lobby management or resist unpopular changes. In procurement, buyers might form a group to influence senior managers on issues such as introducing sustainable sourcing practices. By forming groups, individuals can increase their bargaining power and impact decisions.

In conclusion, groups form for task achievement, to satisfy social needs, to provide security, and to increase power and influence. Managers must understand these dynamics because groups can both support organisational objectives and create challenges if informal groups resist change. Effective leaders harness the benefits of group formation while addressing the risks to ensure both cohesion and productivity.

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.

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.

Understanding individuals is crucial for effective leadership. People bring unique qualities to the workplace, which influence how they behave, perform, and interact. Four important factors that make up the individual are as follows.

Firstly,personalityplays a major role. Traits such as extroversion, conscientiousness, or openness (from models like the Big Five) influence how individuals communicate, make decisions, and fit into teams. For example, an extrovert may thrive in negotiation roles, while an introvert may excel in analytical procurement tasks.

Secondly,attitudes and valuesshape how individuals respond to work situations. Values around ethics, sustainability, or fairness can influence motivation and alignment with organisational culture. In procurement, a professional with strong ethical values may be more resistant to corruption risks.

Thirdly,perception and motivationaffect behaviour. Individuals interpret situations differently, and motivation theories such as Maslow, Herzberg or McGregor’s Theory X/Y show how personal drivers impact performance. Some may be motivated by pay, others by recognition or career development.

Finally,abilities and skillsdefine what individuals can contribute. These include technical competencies, problem-solving skills, and interpersonal abilities. A skilled negotiator, for example, adds significant value to a procurement team.

Managers must also choose effective ways to lead teams. Three common approaches are:

Autocratic leadership– where the manager makes decisions without consulting the team. This can be effective in crises or routine, highly regulated tasks (e.g., compliance procurement), but risks low morale if overused.

Democratic or participative leadership– where managers involve team members in decision-making. This improves engagement, creativity, and buy-in. For example, involving procurement staff in category strategy development can generate stronger results.

Laissez-faire leadership– where the manager provides minimal direction, allowing the team high autonomy. This works well when teams are highly skilled and self-motivated, but may cause confusion if individuals lack experience.

In conclusion, individuals are shaped by their personality, values, perceptions/motivations, and skills, all of which affect their workplace performance. Managers can choose between autocratic, democratic, or laissez-faire leadership depending on the situation. Successful leaders adapt their style to the individuals and teams they manage, ensuring both high performance and motivation.

Individuals learn in different ways, and managers must understand these methods to develop their teams effectively.

One method isformal learning, such as classroom courses, e-learning, or qualifications like CIPS. This gives structured knowledge and ensures consistency, but it may lack immediate workplace application.

A second method ison-the-job learning, where skills are developed through daily tasks, job rotation or shadowing. This is practical and tailored to the workplace but may be inconsistent without good supervision.

A third approach isexperiential learning, based on Kolb’s cycle of experience, reflection, conceptualisation and testing. For example, a buyer may learn negotiation skills by practising in a live supplier meeting, reflecting on performance, and then improving.

Another method issocial learning, as described by Bandura. Individuals learn by observing and modelling others’ behaviour. In procurement, junior staff may observe how senior colleagues manage supplier relationships and copy effective practices.

Finally, there isself-directed learning, where individuals take initiative through reading, research or online courses. This builds independence but requires strong personal motivation.

In contrast, formal learning is structured and standardised, while experiential and social learning are more practical and situational. On-the-job learning blends practice with support, whereas self-directed learning provides autonomy but less guidance. Most organisations use a mix of these methods to ensure balanced development.

One important factor that influences learning is an individual’slearning style. According to Honey and Mumford, some people areactivists(learn best by doing), others arereflectors(learn by observing and thinking),theorists(prefer analysing concepts), orpragmatists(want to apply ideas in practice). For example, in procurement training, an activist may benefit from a role-play negotiation, while a theorist may prefer studying sourcing models before application. Managers who recognise learning styles can tailor development activities to individual preferences, making learning more effective.

In conclusion, individuals can learn through formal, on-the-job, experiential, social, or self-directed approaches, each with strengths and weaknesses. Learning effectiveness depends on personal factors such as style, and managers who understand these differences can create development opportunities that are both motivating and productive.

Intrinsic and extrinsic motivation (10 points):

Motivation refers to the internal drive that influences people’s behaviour and performance.

Intrinsic motivationcomes from within the individual and is linked to personal satisfaction, enjoyment, achievement, or a sense of purpose. For example, a procurement professional may feel motivated by solving complex supplier challenges or contributing to sustainability goals.

Extrinsic motivationcomes from external rewards such as pay, bonuses, promotions, or recognition. For instance, a buyer might be motivated by achieving cost savings to receive a financial bonus.

Both types of motivation are important in the workplace. Intrinsic motivation sustains long-term commitment, while extrinsic rewards provide short-term incentives. Effective managers balance both to maximise performance.

One theory of motivation (15 points):

A widely used theory isHerzberg’s Two-Factor Theory. Herzberg identified two sets of factors that influence motivation:

Hygiene factors– these do not motivate if present, but if absent, they cause dissatisfaction. Examples include salary, working conditions, policies, supervision, and job security. For example, if procurement staff lack proper tools or fair pay, they may feel dissatisfied, but simply improving pay will not necessarily make them highly motivated.

Motivators– these are intrinsic to the job and lead to satisfaction and motivation. They include achievement, recognition, responsibility, personal growth, and meaningful work. For instance, giving a buyer responsibility to lead a supplier negotiation or recognising their success increases intrinsic motivation.

Herzberg’s theory highlights that managers cannot rely on pay and policies alone. They must remove dissatisfaction by ensuring fair hygiene factors and then boost engagement by providing motivators. In procurement, this could mean ensuring fair contracts, proper systems, and clear processes (hygiene factors), while also giving staff opportunities for training, career progression, and recognition (motivators).

Conclusion:

Intrinsic motivation is about internal satisfaction, while extrinsic motivation relies on external rewards. Herzberg’s theory shows that managers should address hygiene factors to avoid dissatisfaction but must focus on motivators to truly drive performance. For procurement and supply leaders, combining both ensures staff remain engaged, loyal, and productive.

Intrinsic motivation comes from within the individual and relates to personal satisfaction, growth, and achievement, rather than external rewards such as pay. TheJob Characteristics Model (Hackman and Oldham)identifies several features of a role that can make it intrinsically motivating.

The first isSkill Variety. A role that allows employees to use a range of skills and abilities prevents boredom and makes the job more stimulating. For example, a procurement professional who undertakes supplier negotiations, contract management, and market analysis will find their role more engaging than one limited to routine administration.

The second isTask Identity. This means being able to complete a whole piece of work from start to finish. Employees are more motivated when they can see a clear outcome. In procurement, this could be managing a sourcing project end-to-end, from supplier selection through to contract award.

Thirdly,Task Significanceadds motivation by making employees aware of the impact of their work on others. If individuals see that their role contributes to organisational goals or wider society, they gain intrinsic satisfaction. For example, a buyer working on sustainable sourcing projects may feel motivated by contributing to environmental and ethical improvements.

The fourth isAutonomy. When employees have control over how they perform their work, they feel trusted and empowered. In procurement, this could mean giving staff flexibility in how they manage supplier relationships or structure negotiations, rather than micro-managing every step.

Finally,Feedbackis a key factor. Employees are motivated when they receive clear information on their performance, either from managers, colleagues, or the work itself. For example, a procurement professional who gets recognition for achieving cost savings or reducing supplier risks will feel intrinsically rewarded.

In summary, roles that offerskill variety, task identity, task significance, autonomy, and feedbackare more likely to be intrinsically motivating. For managers, designing jobs with these characteristics is essential for creating engaged and high-performing teams, particularly in procurement where complex, meaningful, and responsible work opportunities can drive motivation.