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Make concessions

 
Date: 01-Jun-06   Harvard Business School Working Knowledge
 
Concessions are often necessary in negotiation, but they are most effective when used to build goodwill and reciprocity. Negotiators should therefore always make clear to the other party the cost and difficulty of the compromises being made.

Your counterparty has an interest in downplaying how much you have moved. Negotiators should also emphasise the benefits to the other side: research suggests that concessions are reciprocated based on the benefits received, not on what is sacrificed.

Concessions will also be more powerful when your initial position is seen as serious, so justify that position; don't give it up too easily and use it as a reference point when labelling concessions.

Ask for reciprocity and make clear what you are looking for, or your counterparty may get it wrong or offer whatever suits them.

When trust is low or in one-shot negotiations, explicitly contingent concessions may be appropriate.

Finally, make concessions in instalments: the overall movement will be more valued and you will be more effective.

Four strategies for making concessions
Deepak Malhotra
Harvard Business School Working Knowledge, 6 March 2006

Review by Steve Lodge

 
 
 

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