Concessions

Definition

Concessions are compromises or allowances made during negotiations to reach an agreement. They play a crucial role in the negotiation process, as they can help break deadlocks, foster goodwill, and facilitate a collaborative atmosphere between parties seeking mutually beneficial outcomes.

5 Must Know Facts For Your Next Test

1. Making concessions can signal flexibility and a willingness to cooperate, which can positively impact the negotiation dynamic.
2. Strategically timed concessions can help build rapport and trust between negotiating parties, making it easier to reach an agreement.
3. Concessions should be made carefully; over-conceding can undermine one’s position and set a precedent for future negotiations.
4. It's important to assess the value of each concession to ensure it aligns with overall negotiation goals and objectives.
5. Negotiators often need to balance the need for concessions with maintaining their position of power, as giving too much away can lead to unfavorable outcomes.

Review Questions

• How do concessions contribute to overcoming impasses in negotiations?
  • Concessions are essential in overcoming impasses because they provide a pathway for movement when parties become stuck. By offering concessions, negotiators can demonstrate goodwill and a commitment to finding common ground, encouraging the other party to reciprocate. This back-and-forth exchange helps to create momentum, ultimately leading to a resolution that benefits both sides.
• In what ways can making strategic concessions impact the negotiation of employment contracts and compensation?
  • Strategic concessions during employment contract negotiations can shape the final outcome significantly. For example, an employer might concede on salary but gain flexibility in other areas such as work hours or remote work options. These thoughtful concessions help balance the needs of both parties, often resulting in a more satisfactory agreement while still aligning with overall organizational goals.
• Evaluate the long-term implications of concession strategies on buyer-seller relationships in sales negotiations.
  • Long-term implications of concession strategies in sales negotiations can greatly influence buyer-seller relationships. When sellers make concessions that genuinely add value without compromising their own interests excessively, it fosters trust and loyalty from buyers. On the other hand, if sellers make excessive or poorly considered concessions, it could lead to future expectations of similar behavior, potentially harming profitability and sustainability of the relationship. A balanced approach ensures both parties feel respected and valued, promoting a healthier ongoing partnership.

Related terms

Compromise:

A mutual agreement where each party makes concessions to resolve a conflict or reach a settlement.

BATNA (Best Alternative to a Negotiated Agreement): The best alternative course of action a party can take if negotiations fail, which serves as a benchmark for assessing the value of concessions.

Negotiation Tactics: Specific strategies employed by negotiators to influence the outcome of discussions, often involving the use of concessions to create leverage.