Concession

Definition

A concession is a compromise or yielding of a position in negotiation, where one party agrees to give up certain demands or modify their stance to reach an agreement. This concept is crucial in negotiations as it can help foster cooperation, build relationships, and lead to mutually beneficial outcomes. Concessions often reflect a recognition of the other party's needs and can be strategic moves to facilitate resolution and avoid stalemate.

5 Must Know Facts For Your Next Test

1. Concessions are essential in negotiations, as they demonstrate a willingness to collaborate and can create an atmosphere of goodwill.
2. Effective concessions are often strategic; parties should carefully consider what they are willing to give up and how it will impact their overall objectives.
3. Making concessions too early or too generously can weaken a party's position, while being inflexible may lead to failed negotiations.
4. Concessions can be partial or complete; partial concessions allow parties to retain some of their original demands while still moving toward an agreement.
5. Understanding the other party's interests is vital when making concessions, as this knowledge can help tailor offers that are more likely to be accepted.

Review Questions

• How do concessions facilitate successful negotiation outcomes?
  • Concessions facilitate successful negotiation outcomes by promoting collaboration and demonstrating a willingness to find common ground. When one party makes a concession, it often encourages the other party to reciprocate, leading to a more balanced and productive dialogue. This back-and-forth helps build trust and strengthens relationships, ultimately paving the way for mutually beneficial agreements.
• Discuss the strategic considerations involved in making concessions during negotiations.
  • When making concessions during negotiations, strategic considerations include timing, value, and the potential impact on the overall negotiation dynamics. Parties must assess what they are willing to concede without undermining their own goals and ensure that their concessions align with the interests of both sides. Additionally, understanding when to make a concession can significantly influence the outcome; waiting for the right moment can enhance its effectiveness and promote further movement toward resolution.
• Evaluate the risks associated with making concessions too readily in negotiation scenarios.
  • Making concessions too readily can pose several risks in negotiation scenarios, such as weakening one's bargaining position and creating an expectation for further concessions. If one party consistently yields without receiving adequate value in return, it may signal weakness or lack of commitment to their original objectives. This behavior can lead to an imbalanced negotiation dynamic where one side feels empowered to demand more, potentially resulting in unfavorable terms for the conceding party. Therefore, it's crucial to strike a balance between flexibility and assertiveness.

Related terms

Negotiation: A process in which two or more parties communicate to reach a mutual agreement or resolve a conflict.

Compromise: An agreement or settlement reached by each side making concessions to the other.

BATNA: Best Alternative to a Negotiated Agreement; the best outcome a party can expect if negotiations fail.