Corporate Management

Is everything negotiable? Strategies and risks for managers of a 'Trump-like' approach

Trump's 'negotiating approach' and the implications for managers

by Lorenzo Cavalieri*

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3' min read

3' min read

In this historical period the US president is for obvious reasons the centre of media attention. People are not only talking about his choices but also about his style of handling power, which seems to be based on a very simple concept: everything is negotiation.

Some analysts in describing his approach to major diplomatic and economic issues have used the term 'transactional approach'. An expression that recalls the essence of his attitude: relations are made up of exchanges that can never be taken for granted and for which quid pro quo can always be demanded. Everything is negotiable. Taking this logic to the extreme, if my son asked me to pass him the salt at the table, I might reply 'OK, I'll pass it to you, but you wash the dishes afterwards'.

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Many have noted how the US president's posture in politics is actually the legacy of his personal and family history, a history of unscrupulous entrepreneurship. On closer inspection, in fact, the Trumpian approach to 'continuous negotiation' is easily recognisable in the habits of so many entrepreneurs and managers, in all corners of the globe.

Analysing this style can be interesting in management for two categories of people: on the one hand for those who need to make themselves more valuable at work with a 'crash course in negotiation' and on the other hand for those who already use this approach but fail to see the risks involved in managing their professional relationships with such an unashamedly transactional attitude.

Meanwhile, let us try to define the 'Trump-style' transactional management style through three basic principles:

1) Any concession must have a quid pro quo. So if one of your co-workers informs you that he needs to take leave because of a family problem, even though it is basically an obligation for you to say 'sure, go ahead' you will tell him 'sure, of course, even though it was essential for you to finish that work today. Anyway, no problem. I'll ask you maybe if you can come half an hour earlier tomorrow (the counterpart)'.

2) The quid pro quo is all the more expensive the more your interlocutor proves to need you. The colleague desperately needs to receive a document from you before it is due. You actually already have the document ready and it would cost you nothing to send it to him. You decide to negotiate this yes of yours and make him pay dearly for it: 'You put me in trouble with this request. I could try, but I would need not only x but also y. If you can give me x and y then I can do it, no problem'.

3) Negotiation is played as a test of strength in which sanctions are applied to the uncooperative behaviour of the interlocutor, even at the cost of suffering losses at first. I abruptly interrupt the purchase of a good from a supplier, so I accept the pain of depriving myself of it because I imagine that the supplier, in order to start selling again, will be willing after an initial phase to renegotiate his claims downwards.

Being aware of these dynamics for a manager is crucial in order to be able to dose the force with which one 'pulls the rope'. While pulling the rope with a transactional approach certainly helps to get more out of colleagues, customers, suppliers and co-workers, one must always assess the risk of the rope breaking, the cost of conflictual tension, the cost of attrition and the possible ultimate undermining of relationships.

This dilemma is handled by assessing the balance of power and the reference time horizon. If I am the strong party because I have more alternatives than my negotiating partner and I can inflict more damage on him than he can inflict on me I will have an incentive to 'play transactional'. If, on the other hand, the negotiating power relations are balanced and it is important for me to invest in the quality and duration of the relationship with the interlocutor, then the cynical transactional logic brings me far more risks than benefits.

* Managing director of the training and consulting company Sparring.

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