6.2 Concession Management

Concessions are a crucial aspect of negotiation, involving voluntary modifications to initial demands. They signal flexibility, build trust, and can break deadlocks. However, concessions also carry risks and require strategic planning to maximize their effectiveness.

Successful negotiators approach concessions strategically by preparing thoroughly, planning their concession schedule, and using effective techniques. They analyze the other party's concession patterns, adapt their strategy accordingly, and employ tactics to elicit concessions while maintaining a collaborative atmosphere.

Understanding Concessions in Negotiation

Role of concessions in bargaining

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• Concessions involve voluntarily modifying initial demands or offers moving toward the other party's position
• Concessions signal willingness to compromise build trust and rapport demonstrate flexibility
• Concessions facilitate progress in deadlocked situations encourage reciprocity from the other party
• Concessions influence value distribution shape perceptions of fairness and satisfaction
• Concessions carry risks of appearing weak or desperate potentially encouraging excessive demands

Strategic approach to concessions

• Prepare by identifying BATNA determining reservation point establishing aspirational target
• Plan concessions by creating schedule prioritizing issues for potential trade-offs
• Use effective techniques starting small gradually increasing size employing conditional concessions (if-then statements)
• Create value by exploring non-monetary concessions bundling small concessions seeking mutually beneficial trade-offs
• Minimize losses by setting clear limits using time pressure strategically employing reciprocity principle

Adapting Concession Strategies

Analysis of concession patterns

• Observe frequency size and timing of other party's concessions
• Interpret behavior by assessing negotiation style identifying cultural influences evaluating commitment to agreement
• Adapt strategy by matching concession pace adjusting size modifying communication style
• Recognize and respond to common tactics (lowballing highballing)
• Use concession analysis to gauge priorities infer importance of issues identify potential trade-offs

Tactics for eliciting concessions

• Build collaborative atmosphere emphasizing shared interests using inclusive language (we) expressing appreciation
• Elicit concessions using open-ended questions strategic silence summary close technique
• Frame concessions positively highlighting benefits presenting as joint problem-solving
• Manage concession pace using time pressure judiciously taking breaks for reflection
• Address impasses by proposing hypothetical solutions suggesting small interim agreements
• Maintain trust by following through on commitments communicating reasons for limitations acknowledging other party's flexibility