Concession

Definition

A concession is a compromise made by one party in a negotiation to reach an agreement. It often involves giving up something of value to facilitate progress and show willingness to collaborate. Concessions can be strategic, signaling flexibility, but they can also reflect the realities of negotiating from a weaker position, where the party may have limited options.

5 Must Know Facts For Your Next Test

1. Making concessions can demonstrate goodwill and a desire to find common ground, especially in negotiations where one party is at a disadvantage.
2. The ability to make effective concessions often relies on understanding the other party's needs and priorities, allowing for more meaningful compromises.
3. In negotiations from a position of weakness, concessions may be necessary to avoid total failure or loss, but they should be made strategically to maintain some leverage.
4. Overly generous concessions can weaken a party's position and signal desperation, so it’s important to balance what you give up with what you receive in return.
5. Tracking concessions throughout the negotiation process can help ensure that both parties are engaged in a fair exchange and prevent one side from dominating the conversation.

Review Questions

• How can making concessions influence the overall dynamics of a negotiation?
  • Making concessions can significantly alter the dynamics of a negotiation by fostering trust and signaling cooperation between parties. When one party concedes something, it often encourages reciprocity, prompting the other party to consider making their own concessions. This back-and-forth can create a more collaborative atmosphere, ultimately leading to a resolution that satisfies both parties. However, it is crucial that concessions are made thoughtfully to ensure they do not undermine one's negotiating position.
• What role does understanding the other party's needs play when deciding on concessions?
  • Understanding the other party's needs is vital when deciding on concessions because it allows for targeted compromises that address specific concerns or interests. By recognizing what the other side values most, you can make concessions that are less impactful for you but highly valuable for them. This strategic approach not only increases the likelihood of reaching an agreement but also enhances your position in the negotiation by demonstrating empathy and willingness to collaborate.
• Evaluate how negotiating from a position of weakness affects the types of concessions that should be made.
  • Negotiating from a position of weakness requires careful evaluation of the types of concessions made to avoid undermining one's interests. In such scenarios, parties may need to make more concessions than they ideally would, but it's essential to ensure these concessions are strategically beneficial. For example, instead of making broad or significant sacrifices, it might be wiser to offer smaller concessions that still demonstrate cooperation while preserving essential objectives. Balancing these factors helps maintain some level of leverage even when at a disadvantage.

Related terms

Negotiation Tactics: Strategies employed by negotiators to achieve their goals, which can include making concessions as part of a broader approach to reach an agreement.

BATNA:

Best Alternative to a Negotiated Agreement, referring to the most advantageous alternative course of action a party can take if negotiations fail.

ZOPA:

Zone of Possible Agreement, which is the range in which an agreement is satisfactory to both parties involved in the negotiation.