Concession Strategy

Definition

A concession strategy refers to the approach taken during negotiations where one party offers something of value to the other party to facilitate agreement or advance discussions. This strategy is essential in building rapport, demonstrating flexibility, and moving towards a mutually beneficial resolution. The effectiveness of this strategy relies on timing, the perceived value of the concessions, and how they align with the overall negotiation goals.

5 Must Know Facts For Your Next Test

1. Concessions are often viewed as a necessary part of negotiation, but they should be made strategically rather than impulsively.
2. Making concessions can build trust and rapport, encouraging the other party to reciprocate and contribute to a collaborative atmosphere.
3. The size and timing of a concession can impact how it is perceived, with smaller, incremental concessions often seen as more strategic than large, one-off offers.
4. Concessions should ideally be tied to achieving specific outcomes or agreements that align with one's negotiation goals.
5. Overly generous concessions can undermine one's position and may lead the other party to expect more significant concessions in future interactions.

Review Questions

• How can a well-planned concession strategy enhance the overall negotiation process?
  • A well-planned concession strategy can enhance negotiations by fostering goodwill and encouraging collaboration between parties. By offering concessions at strategic points, negotiators can build rapport and create a more positive atmosphere that may lead to creative solutions. Additionally, careful planning allows negotiators to ensure that concessions are aligned with their goals, ultimately leading to more favorable outcomes.
• Discuss the role of timing when making concessions in negotiations and its impact on the negotiation outcome.
  • Timing plays a crucial role in making concessions as it can significantly affect how they are perceived by the other party. Making a concession too early may signal weakness or desperation, while waiting too long might cause frustration or impede progress. An optimal timing strategy involves recognizing when the other party is most receptive to concessions, thus maximizing their impact and increasing the likelihood of achieving desired results in negotiations.
• Evaluate the potential risks associated with concession strategies and how they might impact long-term negotiation relationships.
  • Concession strategies come with potential risks that can affect long-term negotiation relationships if not handled properly. Overly generous concessions may set a precedent that leads the other party to expect similar offers in future negotiations, which could weaken one’s negotiating position. Furthermore, if concessions are not reciprocated or are perceived as insincere, it may damage trust and rapport, making future negotiations more difficult. Therefore, negotiators must balance their willingness to concede with the need to maintain their credibility and uphold their interests.

Related terms

Negotiation Tactics: Specific techniques or methods used during negotiations to influence outcomes and reach an agreement.

Anchoring: The psychological phenomenon where the first number or offer presented in a negotiation sets a reference point for subsequent discussions and decisions.

BATNA: Best Alternative to a Negotiated Agreement; the most advantageous course of action a party can take if negotiations fail.