Eskom Procurement Book 2015

NEGOTIATION

Figure 7.1 provides a graphical illustration of different patterns of concessions that all total $160. Ask yourself if how these concessions are offered will influence the other party’s behaviour. The answer, of course, is their pattern will directly influence the other party. The effective use of concessions is a tactic. The golden rules for concessions are to concede issues that are of low value to you, but of high value to your counterpart, and don’t give concessions away for nothing. When preparing your concessions, it is best to invest time in preparation, focusing on: • What can I offer that will not cost me much but will mean a lot to my counterpart? • What is my counterpart likely to want from me that will hurt? • What can I leverage to make the deal more attractive in my counterpart’s eyes, and therefore make it desirable for him to reach an agreement quicker?

Figure 7.1: Presenting concessions.

Your concessions are also going to be judged by their fluency, i.e., concessions need to have some logical link to each other and to the overall negotiation. This author was once involved in a negotiation that dissolved into uncontrollable laughter when both parties realised that their concessions had become ridiculous. The negotiation concerned the supply of a (very) well-known cool drink by Company C to the largest distributor of retail products to petrol station shops in Austria. All points had been agreed upon, except the possible payment by Company C of a stand at an upcoming trade fair in Vienna. The discussion went like this:

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