Concessions

Definition

Concessions refer to compromises or adjustments made during negotiations, where one party agrees to give up something in order to reach a mutually acceptable agreement. This practice is essential in negotiation strategies, as it reflects a willingness to cooperate and can help build rapport between parties, ultimately leading to a successful resolution.

5 Must Know Facts For Your Next Test

1. Concessions can be tactical moves in negotiations, often used to demonstrate flexibility and encourage reciprocation from the other party.
2. Making concessions can help establish trust and foster long-term relationships between negotiating parties.
3. The timing and size of concessions are crucial; giving away too much too soon can weaken a negotiator's position.
4. Effective negotiators often prepare a list of potential concessions beforehand, knowing which areas they are willing to compromise on.
5. Understanding the other party's needs and priorities is essential in determining what concessions might be effective in closing a deal.

Review Questions

• How do concessions impact the negotiation process and outcomes?
  • Concessions play a significant role in the negotiation process as they can facilitate compromise and lead to mutually beneficial agreements. When one party makes a concession, it often encourages the other party to reciprocate, creating a give-and-take dynamic that can help overcome obstacles. This process builds rapport and demonstrates goodwill, making it more likely for both sides to reach a satisfactory outcome.
• What strategies can negotiators use when deciding on concessions to ensure they do not undermine their position?
  • Negotiators should carefully evaluate their priorities and prepare a list of potential concessions before entering negotiations. By knowing which areas they can afford to compromise on without weakening their overall position, they can strategically make concessions that encourage reciprocation while maintaining leverage. Additionally, timing is crucial; offering smaller, incremental concessions at strategic moments can keep negotiations moving forward without giving away too much too soon.
• In what ways can understanding the needs and priorities of the opposing party influence the effectiveness of concessions during negotiations?
  • Understanding the opposing party's needs and priorities allows negotiators to tailor their concessions effectively, increasing the likelihood of reaching an agreement. By aligning concessions with what the other party values most, negotiators demonstrate that they are attentive and willing to cooperate, which can foster goodwill. This strategic alignment not only makes concessions more impactful but also helps identify areas where both parties can benefit, ultimately leading to more successful negotiation outcomes.

Related terms

Negotiation: The process by which two or more parties communicate and bargain to reach an agreement.

Compromise: An agreement or settlement reached by each party making concessions.

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