Concessions- Making
Introduction
Strong negotiation skill is always the single most significant differentiator between reaching a great deal and not making any pact. Negotiations entail reading the audience and determining when to get involved. Of noteworthy is that both negotiating parties would want to benefit from the deal. So, making concessions is often characterized by some key aspects, such as making demand, reciprocity, and timing in order to achieve a strategic outcome. Therefore,this paper seeks to illustratethesefeaturesthat are crucial in deal-making. While most individuals entwinedin negotiations understand that the negotiations process is a situation of giving and take, one must be ready to make concessions in order to achieve his or her strategic outcome.
In virtually any negotiation, two things are at stake: economic value (that is money and scarce resources) and people (relationships and trust). Effective negotiators maximize both economic value and enhancing relationships at the bargaining table. These negotiators often believe that by “taking one for the team,” they can later maximize their economic gain (Hüffmeier et al., 2014). This strategy is not advisable because the people one negotiates with in long-term relationships have short-term memories. The relational sacrifice we make today may not be remembered or reciprocated by the receiving party tomorrow. The intuition is that if a person believed the negotiation was a single-shot situation, they might behave differently—perhaps more aggressively—than if they anticipated interacting with the counterparty in the future. In the networked, virtual world, this distinction is nearly irrelevant because most of our interactions are recorded or known to others. Even if a negotiator does not actually meet a given counterparty again, by virtue of social media, a detailed account of their interaction would surely be visible for anyone to see (Holmes et al., 2017). For these reasons, all managers and executives to assume that the details of their negotiation communication and behaviour will be accessible for anyone who might be interested, and consequently, to act as though all negotiations have long term implications.
Concessions making is an important part of the negotiation process. It enables both sides to get acquainted with each other and build trust in the process. Concession making can also be a crucial way of unlocking the negotiation if both sides end up in a deadlock situation. One of the key highlights when preparing to negotiate is to ensure that the initial request allows for room for concession making. While deciding about the concession, it is suggested not to make so much hurry. Before giving concession, the party should prepare the list that includes the concession given and in Return what the party wants to receive. They should decide on the most important and less important factors in the agreement very well defined in this article. In the concession, it is determined that giving and raking are involved in it (Hüffmeier et al., 2018). The participant should try to make the pre-plans regarding the contacts that the party was going to make. Because it makes the partners know the level where they stand. The main purpose of this paper is to explain the significance of concession making in negotiations.
Making Concessions in Negotiations
Concession in the negotiations refers to the strategy of making satisfying both the partners in the negotiations, also called the “win-win” strategy. It is also called the trading plan in which taking and giving is done for the agreement. The bargaining mix in negotiating is referred to as disclosing all the factors related to conflicts and issues that are possible in the contract. A collaborative approach should be determined in which they are willing to share their interest. Any settlement that falls within the distance between the target point and resistance point is acceptable to you. The closer the settlement to your target point, the more you are satisfied. In opposite, any settlement your make which is close to your resistance point is still acceptable to you but with minimum level of satisfaction.
KeFeng (2019) discusses the private-public partnership and their concession period that is most necessary for both parties. They discussed the strategy that is used by the private and public sectors for deciding the concession period regarding the equity shares possession and many more financial resources (Feng & Wang, 2019).Competitive negotiations, on the other hand, include imposing threats, not to disclose the underlying interest, and may reject reciprocity. On the other hand, Baarslag and Hendrikx (2015) in his article discuss the strategy of concession making that is as follows.
Concession Strategy
When making a concession it is often needed in making a negotiation. There are four strategies that will help maximize the likelihood that others will acknowledge the gestures of good will and reciprocate in kind. There is a way where negotiators label their concessions. The first rule for labeling is that a negotiator wants to make known that what they have given up is costly to them. The second rule would be where the negotiator emphasizes the benefits to the other side of the negotiation. Finally, the last rule would be not to give up on one’s original demand too hastily. Those where just the rules for labeling, but the second strategy is to demand and define reciprocity (Galinsky, Schaerer, & Magee, 2017). When labeling it will cause a responsibility to reciprocate but all in all it will sometimes help the counter part or the other party slow act on that responsibility. The whole point of this strategy is to play out in a variety of settings, when if negotiator could understand the variety of settings it will not be that hard to profit from it hugely. The third strategy would be to make contingent concession. When negotiators are making a contingent concession, a concession is always contingent when their state that they can make it only if the other side agrees to make a specified concession in return.
The High Cost of Low Trust
Counteracting misperception and mistrust at the beginning of a negotiation can help
negotiators avoid vicious cycles and sustain virtuous ones. This was the main point for this article that was trying to get across. The issue with vicious cycle trigger is human tendency to take an exaggerated view of others’ perceived hostility or unreasonable behavior. This leads to negative behavior. It sometimes leads to where negotiators fail to recognize that their own actions created exactly what they feared. This is a kind of situation where one thinks if he or she had not done this prior, they would not be going through this right now (Davies et al., 2016). The opposite of virtuous cycle triggers is fairness perceptions. It is known that we will think a negotiation was fair if we were given a chance to voice our point of view. The fairness of perceptions has strong implication for the ones seeking to build a strong relationship. The more we feel treated equally the greater our satisfaction in the outcome.
This Is Not a Game: Top Sports Agents Share Their Negotiating Secrets
Negotiation is really common when one is playing a big-time sport for some well-known teams. It is not the MLB or NHL it is also when you do a college team too. I have read up on how some top sport agents do there negotiating for the players or for even themselves. Agents have always made a list for what they want and they would always check it twice. They would catalog everything they would want. A negotiator just need to know the priorities before time, so they can make an easier decision and the one that matters the most for that client they have (Bergen et al., 2018). It is like Dexter Fowler wanted some things from the Cubs and he was telling his agent to make a list of things he wants to come true, so the person made a list to figure out what he wanted the most. When one is also negotiating for a sport player or music star that persons mind will be stuck on that one thing they want, but that agent will always have an alternative for if plan A does not work. That is when agents use the resolve and patience strategy. For it is about agents finding ways to negotiate for the clients for what they want. So, they will use that list strategy and see how many ways they can come up with to get all the things they want, but it is about resolving what issues there are and with both parties with means you got to negotiate for your client and you have to be patient also to get those things for the client and you always want to negotiate the right deal for them. That is what Dexter Fowler agent did and the deals they were coming back to him with he did not like, so his agent from a new team with the deals he wanted.
As an agent for a client you always need to be nice to get what you want. In all and any negotiating situation you need to be nice and stay professional, ethical, and courteous. When you are a nice agent for you client that is how you will a good relationship and that will be the most critical to get that best deal for your client. Dexter Fowler’s agent tried that in the beginning, but they got tired over going back and forward and he was not getting anything he wanted. So, his agent just told them no thank you and walked away from being a Cubs player. So, the St. Louis Cardinals did give him that deal his agent was negotiating for him though.
In sports, players do get the deals because all the negotiating they have to do for the players. The agents do need to make a list of all the deals the client wants and go over a couple times to see if they are asking the right things and getting what they want. The agents need to resolve the issues they have with managers on why they are not getting the deal they have asked for. Then they just need to keep negotiating different ways to get everything the player wants and they need to be patient. Agents where clear that you need to be nice though the whole negotiating process because managers could get a little ruthless and mean and you need to stay the professional one in the negotiating process.
Different Types of Negotiations
Win-win negotiations (integrative agreements) are situations in which both negotiators optimize the potential joint gains. Win-win agreements are those in which both parties have gained. Win-lose negotiation refers to situations in which one party prevails at the other party’s expense. This may be because one party has threatened the other party or that one party has capitulated to the other party. Win-lose negotiations are ones in which one party has gained at another’s expense. Lose-lose negotiations are situations in which both parties have made sacrifices that are ultimately unwise or unnecessary, resulting in an outcome that both parties find less than satisfying. Successful negotiation strategies involve preparation, strategy at the negotiation table, and then, post-negotiation behaviours (Davies et al., 2016). Prior to negotiation, a key skill is to initiate negotiations and then, prepare effectively. During negotiation, the negotiator executes their planned strategy and should be ready to evaluate the quality of negotiated settlements. Following the negotiation, there is always concern about whether the agreed upon terms will be honoured and how the negotiation will affect one’s reputation. Indeed, investigations of contract negotiations consider four key objectives in assessing the quality of contracts:
It is wrong for a person to think that his or her actions will speak for themselves. This means that one party making the concession must establish that he or she has made a concession, lest the counterpart will be motivated to ignore or overlook such concession (Holmes et al., 2017).The reason being that the other party would want to evade the social obligation of reciprocating. For example, a customer who wants to purchase a car must make his or her arguments valid in order to reach a realistic price. In this case, the buyer should be able to emphasize the benefits of his or her concessions to the seller. Also timing is often very crucial when making a concession. In every negotiation, there is life for a deal. Therefore, it is not logical to give up hastily on the original demands (Bergen et al., 2018). For instance, if one person makes an offer, and the other party sees it as frivolous, the willingness to quit will not depict concessionary behavior. This example indicates that concessions are often treated powerfully only when the other party viewsoriginal demands as serious and pragmatic. So, in the process of concessions, it is realistic to let the other party know when you are giving up with reasons. By doing so, it becomes apparent that a deal has been achieved.
Do not make concessions under pressure or too rapidly. Making one concession from a position of weakness can result in one being forced to make a host of other concessions later. Even in integrative negotiation, the information an individual can share should be selective. Good integrative negotiators only reveal the information about their own interests or priorities and preferences for different issues. Distributive negotiators would not reveal any information. They only invest their time in asking questions.
Creating demands and defining reciprocity is crucial for every deal. It means that establishing the fact that a concession has been made will aid in triggering a responsibility to reciprocate. However, the other party may be sometimes slow at noticing that reciprocity is needed (Bergen et al., 2018). Therefore, it is reasonable to explicitly, yet diplomatically demand the reciprocity. For example, a negotiation case involving a client and engineering firm where a customer suggests that price for repairing her car is high, while engineers believe the price is accurate due to the complexity of the job. In this context, if the engineer wants to make a concession, he or she would say, “this job is not easy, but I will make adjustments on the fee to accommodate your concerns. I expect that you will alter the deadline for about a month as that will help us significantly.” In the analysisof this statement, it denotes that a concession has been made, tactfully stressing reciprocity, and defines an approach to be used.
Lewicki, Barry & Saunders (2015) note that the initial request should not be too large from what a negotiator really wants, because it may put off the other side, or injure his trust at the end of the negotiation process. My opinion on this is that thorough research about the organization and the negotiator on the other side is essential. I have come across customers who are hell-bent on getting as much bargain as they can out of the process. In such cases, I prefer to have a significant slack on the position I want out of the negotiation process. That way, I have enough room to make as many concessions as required and leave the other side feeling that they have gotten a good deal.
The other maxim of making concession is that it should be made in phases. Rapid concession making is likely to arouse questions in the mind of the other side as to the value they are getting out of the process. People make concessions is for the other side to also feel that they are getting something of value from the process. In the event the request falls rapidly, say from $100 to $10, then the other side must have question marks about the whole deal. It is also important to demand reciprocity in the concession making process (Lewicki, Barry & Saunders, 2015). This means that for every concession made, the other side must also concede equal value. The danger of not making contingent concessions is that the counterpart may take advantage of the situation and only demands concessions without reciprocating. It is a situation that may lead to a bad deal, almost a lose-win situation. For instance, the sale of second-hand cars is usually a protracted process because each side has their objectives. The owner of the car is targeting to get a specific amount out of the sales process, while the buyer is hoping to pay the least price possible. Reconciling both sides is not easy, and may involve protracted negotiation. The buyer may point to the fact that the car is still in good condition with little mileage and no accident history, while the buyer will insist on little faults here and there to justify a lower price. Therefore, for each concession made by the seller, it is only fair that the buyer also makes a concession as the two parties work towards a mutually agreeable position.
In sum, a good negotiation creates an environment for both parties to reach an agreement. To achieve a great deal, one should not assume a concession as an obvious activity, to mean, one party should be sure to let his or her admissions apparent and known. Taking care of time is another vital aspect ofthe agreement. It is not right to give up hurriedly. Last, defining demands and reciprocity is essential and that both should be clear.
Concessions in Wage Negotiations
In the past two years, nothing has been covered extensively by the scholarly discussions and the media as concession bargaining. Labor analysts and the media describe concession as cutbacks, reductions, or givebacks in benefits and wages. It has been defined in some cases as benefit and wage reductions as well as lessening of restrictive rules of work that come from the early opening of existing contracts. In other words, concession refers to the reduction of employee benefits and wages (Carrel & Bales, 2013). Therefore, concession bargaining connotes a kind of collective bargaining in which the trade unions surrender previously gained improvements in conditions and pay in exchange of job security. In illustration, in order to be protected against layoffs, an employee may decide to surrender improvements in benefits and wages. Coined in the U.S, the term is sometimes called employee givebacks or union givebacks.
The first strategy to make an effective bargaining is to label concessions. This implies that t is not advisable to assume that actions will speak for themselves. In most cases, most bargainers ignore this responsibility and the final results become chaotic. In labeling, some rules apply. First, it should be made known that whatever one has surrendered is costly to them. Doing this makes it clear that a concession has been made. Second, the benefits on the other side should be emphasized. According to Karagözoğlu&Riedl, (2015), negotiators reciprocate concessions on the basis of the received benefits, while ignoring how many sacrifices others make. Third, the original demands should not be given up on too hastily. In the event that the first offer is considered frivolous by the other side, the willingness to move away from it will not be viewed as a concessionary behavior. By contrast, the counterpart will see the concessions as more powerful in comparison to the original demands. It is also important to spend time legitimating the original offer and then use it as the meniscus when labeling concessions.
Another effective strategy to concession bargaining is to demand and define reciprocity. Concession labeling can make an obligation to reciprocate, but at times the counterpart may act slowly towards such an obligation. In order to increase the likelihood of getting something out of concession, it is important to explicitly, but diplomatically try to demand reciprocity. These elements are so important but frequently overlooked by negotiators when defining reciprocity. It is equally crucial to have it in mind that no one understands what an individual value than themselves (Karagözoğlu&Riedl, 2015). Therefore, failing to speak up gives the counterpart the opportunity to set standards that may adversely affect business and its overall performance.
The third strategy to making an effective bargaining is to ensure that the concessions made are contingent. One sign of a good working relationship is that parties do not force each other for concessions. Instead, it is upon each side to learn about the concerns and interests of the other and works hard toward winning joint gains. Unfortunately, even though creating such norms is crucial, they mostly impossible. Oxlade, 2016 explains that most people are likely to strike mutual give-and-take deals during negotiations, but this strategy is faced with so many challenges. This is due to the fact that some clients are self-interested or completely untrustworthy. They are most likely to exploit firm’s goodwill by not taking part in reciprocation at all, more so in the way companies define it. However, when there is no trust, or when the trust is low, it is important to revert to making contingent concessions. A concession that can identify possible weaknesses is almost risk-free. With such concession, it is possible to signal the other party that while even though there is room for more concessions, it may be impossible to budget without guarantee for reciprocity. It should be however known that overreliance on contingent concessions can have negative influence on trust building. Demanding an immediate compensation every time a concession is made creates a self-serving interest scenario instead of being oriented towards mutual satisfaction (Olischer&Dörrenbächer, 2013).
Concession bargaining can be used as tool to make sure that some benefits or wages that are disadvantaging to the business are reduced. However, most parties get into negotiations that may affect business performance negatively. Therefore, it is important to understand some of the strategies to effective concession bargaining. Effective strategies are the approaches that guarantees that the concessions are not exploited or ignored. Some of the strategies to effective concessions include labelling concessions, demand and define reciprocity, ensure that the concessions made are contingent, and make concessions in Installments.
Conclusion
Concessions are essential elements of any negotiation. Lack of concessions engenders an impasse in the negotiation, preventing the attainment of a solution. One of the negotiating parties makes an offer, while the other responds. The bargaining groups or individuals should tailor the negotiation to match the zone of potential agreement (ZOPA). Concessions comprise the techniques that can enable the parties to maintain their demands within ZOPA. The situation promotes the attainment of the solution without consuming much time. A high rate of concessions helps the parties to reach consensus in a shorter time (Stoshikj, 2014). The negotiating parties should apply concessions appropriately to gain their goals. Concessions form a way of understanding vital information regarding the opponent. They can reveal the resistance point and the interests of the counterparty.
The primary objective of a negotiation constitutes achieving a mutually acceptable result. Concessions are the sole methods of attaining such an outcome. If one negotiator is unwilling to alter his or her reservation point, the other may be forced to make multiple concessions. Consequently, the party may transcend his or her reservation point. Therefore, all the parties involved in the negotiation should strive to give concessions. Making concessions represents the process of showing concern to the interests of the other party. Besides, granting a concession enhances the fairness of the bargaining process. Negotiation is an interdependent relationship because the parties must accommodate the position of each other. The bargainers can sustain their interdependent relationships through concessions. The parties cannot reach a solution to their issue without concessions. Overall, concession-exchange represents the sole way of attaining a mutually beneficial outcome.
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