Significance of Concessions

Cite this article as:"Significance of Concessions," in The Business Professor, updated October 2, 2017, last accessed July 4, 2020,


What is the significance of “concessions” or adjustment of the bargaining position?

A dependent party’s ability to secure her interests or achieve her objectives in a negotiation depends upon the willingness of the other party to assent to her position (beliefs, principles, desires, demands, etc.). That is, the other party must give in somewhat for the parties to arrive at an agreement. In an interdependent relationship, each party negotiates with the expectation that the other party will adjust her position to accommodate the position of the other party. Here, there must be some give and take by both parties to arrive at an agreement in the negotiation. A party’s adjustment of her position in the negotiation is known as a “concession”. More specifically, a concession is an adjustment by one party in favor of the other party as a result of a tactic employed by the other party. We will discuss tactics in a separate section, but tactic are methods of carrying out a strategy. A tactic is any method employed by a negotiator with the intent of influencing the other party. Any adjustment in the negotiation or concession is done with the purpose of bringing the parties within the zone of potential agreement (ZOPA). As such, one’s willingness to adjust her position affects the outcome and results of the negotiation.

• Discussion: What factors or characteristics of the negotiator or the situation dictate her willingness to make concessions? Can you think of different ways of making concessions (large/small, frequent/infrequent, upfront/at the end, etc.) that could be useful in bringing the parties to a final agreement?

Was this article helpful?