Evaluating the Cost of Concession-making: How to Determine When It's Worth It
As negotiators, we often find ourselves in situations where we need to make concessions in order to achieve our goals. Whether we're negotiating a business deal, a legal settlement, or a personal matter, the question of when to make concessions and at what cost is always a crucial one. In this article, we'll explore the various factors that go into evaluating the cost of concession-making, and how to determine when it's worth it.
Defining Concessions
Before we dive into the question of when to make concessions, let's first define what we mean by a concession. Essentially, a concession is any offer or compromise that we make in order to move the negotiation forward. This can take many forms, including:
- Lowering our initial asking price
- Agreeing to certain terms or conditions that we wouldn't have accepted otherwise
- Offering to give something up in exchange for something else we want
In short, concessions can come in many shapes and sizes, but they all involve giving up something that we want in order to achieve our larger goals.
The Cost of Concession-making
So how do we evaluate the cost of making concessions? There are several factors to consider:
1. The Importance of the Issue
The first and most important factor to consider is how important the issue is to us. If we're negotiating something that is absolutely critical to our goals, then making concessions may not be worth it. On the other hand, if the issue is relatively minor and making a concession will help us to achieve larger goals, then it may be worth it.
2. The Value of the Concession
The second factor to consider is the value of the concession. If we're only giving up something that is relatively insignificant, then it may not be a big deal to make a concession. However, if we're giving up something of significant value, then we need to weigh the cost of the concession against the potential benefits we might receive.
3. The Impact on the Relationship
The third factor to consider is the impact that making a concession will have on the relationship with the other party. If making a concession will damage the relationship or create a sense of resentment, then it may not be worth it. On the other hand, if making a concession will help to build a stronger relationship, then it may be worth it in the long run.
4. The Alternatives
The fourth and final factor to consider is what alternatives we have. If we have other options for achieving our goals without making concessions, then we may want to pursue those instead. However, if making a concession is the only way to achieve our goals, then we need to carefully consider the cost.
When to Make Concessions
Based on these factors, how do we determine when to make concessions? Ultimately, it comes down to balancing the benefits of making a concession against the costs. In general, we should be willing to make concessions when:
- The issue is not critical to our larger goals
- The concession is not of significant value
- Making the concession will not damage the relationship with the other party
- Making the concession is the only way to achieve our goals
On the other hand, we should be hesitant to make concessions when:
- The issue is critical to our larger goals
- The concession is of significant value
- Making the concession will damage the relationship with the other party
- We have other options for achieving our goals
Conclusion
As negotiators, we need to be strategic in our approach to concession-making. While concessions can be useful tools for moving negotiations forward and achieving our goals, they also come with costs and risks. By carefully considering the factors involved in evaluating the cost of concession-making, we can make informed decisions about when to make concessions and when to hold firm.