Negotiation Strategies: The Car Dealership vs. the Boardroom

The car dealership. The last day of the month. The sun beats down on the metallic hoods. You are whisked on a test drive of this year’s shiny new model and treated to an impressive display of the car’s capabilities.

Before you have a chance to consider whether you can afford the car’s list price, the salesman pulls out a freshly inked contract. He is willing to knock a few thousand dollars off the price—as a favor—but you have to sign now. Backed into a corner, you are unsure how to proceed.

Negotiation is part of everyday life, but we do not always recognize it as such. It happens in families when parents negotiate children’s bedtimes. It happens when couples negotiate who is going to take out the dog in the morning, or ponder bigger questions like whether to buy a house or have kids.

Negotiation happens at work when we discuss compensation or when colleagues butt heads about the best way to complete a project.

All negotiations have different stakes and outcomes, and each requires its own strategy. Two main components should guide our thinking when we head into a negotiation:

  1. The importance of the negotiation’s outcome
  2. The importance of our relationship with the negotiator

In short-term, transactional negotiations with strangers, the outcome is typically more

important than the relationship. At the car dealership, for example, the thousands of dollars that hang in the balance clearly outweigh the relationship with a salesperson who you are unlikely to meet again. Walking away from such a negotiation has little to no negative impact. When the contract is plopped on the hood, you have little reason not to walk away or at the very least, bargain hard.

In healthcare, as with most businesses, many relationships are long-term and beneficial. Whether negotiating salary or the rollout of a new initiative, the relationships at stake can be as, if not more, important than any given outcome. Haggling for higher compensation is counterproductive if it leaves you with a disgruntled boss who is less likely to give you future leeway.

In workplace negotiations where relationships are ongoing and important, it is best to work toward a collaborative solution, rather than looking for an out-and-out win. If, however, the stakes of a given negotiation are high enough (read: business critical), placing strain on a relationship may be the only option.

So: at the car lot, bargain hard or walk away. In the office, exercise caution and seek collaboration as you weigh outcomes and relationships.

THE TAKEAWAY: Negotiation strategy is a constant calculation measuring the benefits of a given outcome with the potential stresses that outcome will put on the relationships involved.

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