Concession

Definition

A concession is a compromise or agreement made during negotiations where one party gives up something of value to reach a mutually beneficial outcome. This concept is crucial in negotiation strategies, as making concessions can help build rapport, facilitate communication, and ultimately lead to successful agreements between parties with differing interests.

5 Must Know Facts For Your Next Test

1. Concessions are often seen as a sign of goodwill, showing that one party is willing to make sacrifices for the sake of reaching an agreement.
2. Effective negotiators typically use a strategy of incremental concessions, gradually giving ground on less critical issues while holding firm on key points.
3. The timing and size of concessions can significantly impact the negotiation process; too large or too early may weaken one's position.
4. Concessions should be reciprocal; for every concession made, it’s beneficial to seek something in return to maintain balance and equity in negotiations.
5. Understanding the other party’s needs and priorities can help in crafting concessions that are meaningful and lead to a successful outcome.

Review Questions

• How do concessions play a role in building relationships during negotiations?
  • Concessions are vital in building relationships during negotiations because they demonstrate a willingness to cooperate and compromise. By making concessions, negotiators show empathy towards the other party's needs, which fosters trust and encourages open communication. This approach can create a more collaborative atmosphere, making it easier to reach an agreement that satisfies both sides.
• Discuss the strategic considerations that should be taken into account when deciding on the size and timing of concessions.
  • When deciding on the size and timing of concessions, negotiators must consider their own objectives, the importance of the issues at stake, and the other party's potential reactions. A well-timed small concession can pave the way for larger agreements, while a significant concession too early might undermine one’s negotiating position. Therefore, it’s crucial to balance giving ground with maintaining leverage throughout the negotiation process.
• Evaluate how understanding the other party's priorities affects the effectiveness of concessions in negotiations.
  • Understanding the other party's priorities is essential for maximizing the effectiveness of concessions. When negotiators know what is most important to their counterparts, they can tailor their concessions to address those specific needs, making them more impactful. This insight allows for crafting concessions that are not only perceived as valuable by the other party but also help in achieving one’s own goals, thereby creating a win-win situation that enhances the overall outcome of the negotiation.

Related terms

Negotiation: A discussion aimed at reaching an agreement between two or more parties, often involving compromise and the exchange of concessions.

Compromise: An agreement or settlement of a dispute that is reached by each side making concessions.

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