Dealmaking

Dealmaking is defined as the art of crafting deals through negotiations focused on an integrative, or value-creating process, rather than through distributive bargaining, or a haggling process. Dealmaking includes the range of activities both at the bargaining table and away from it that seek to bring two or more parties together toward some common end, whether it is the sale of an asset, a vendor agreement, or a merger between corporations. The Program on Negotiation emphasizes integrative bargaining in its dealmaking literature and teaches methods and techniques from this school of thought in its executive education courses.

In corporate dealmaking, much of the action happens away from the negotiating table. Successful dealmakers understand that deal set-up and design greatly influence negotiation outcomes and successfully closing a deal. Other critical factors in successfully making deals include strategic behavior—the unwillingness of one or both sides to make a best offer—psychological factors, lack of a deadline, poorly-prepared formal documents, and refusal to allow the other side to make a graceful exit, even when they’ve agreed to your demands.

Strategies for successful dealmaking include tactics such as creating more value by exploring hidden interests and adding issues that appeal to your bargaining opponent. Another tactic is recruiting a third-party mediator when the dealmaking process is at an impasse. Sometimes, Harvard experts find, it pays to be the first person to make an offer, while at other times, it pays to wait.

Articles from the Program on Negotiation focus on a vast array of dealmaking strategies and explore the latest concepts such as expanding the pie, “negotiauctions,” anchors in negotiation, and bartering.

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Negotiating organizational breakups

PON Staff   •  02/29/2020   •  Filed in Dealmaking

For decades, the United Methodist Church (UMC) has grappled with internal disagreement over its doctrine on LGBTQ rights, which prohibits same-sex marriage and noncelibate gay clergy. Methodists in the United States, who comprise more than half of the church’s 12.5 million members, increasingly have found those positions untenable, particularly after the U.S. Supreme Court legalized … Read Negotiating organizational breakups

When High Prices Are a Bitter Pill to Swallow

PON Staff   •  01/31/2020   •  Filed in Dealmaking

There’s at least one thing that politicians as ideologically dissimilar as President Donald Trump and Senator Elizabeth Warren have agreed on: Prescription drug prices are too high in the United States. Americans pay about $1,200 per year, on average, for their medication, according to the Organization for Economic Cooperation and Development— about twice as much … Read When High Prices Are a Bitter Pill to Swallow

Changing the Rules of the Game

PON Staff   •  12/31/2019   •  Filed in Dealmaking

When industry disrupters and established firms face off at the negotiating table, they’re likely to have different ideas about what’s negotiable and what’s not. Such was the case when screening service Netflix and two major U.S. theater chains tried to negotiate a wide theatrical release for The Irishman, the Netflix-financed Martin Scorsese film. Their impasse … Read Changing the Rules of the Game

Don’t get schooled in your next negotiation

PON Staff   •  12/31/2019   •  Filed in Dealmaking

Chicago mayor Lori Lightfoot, a former federal prosecutor and head of the Chicago Police Board, was elected in 2018 as a reformer calling for big improvements to Chicago’s chronically underfunded public schools, including smaller class sizes, and more nurses and social workers. One of Lightfoot’s first major challenges after being sworn in on May 20, 2019, … Read Don’t get schooled in your next negotiation

Negotiation in the News: When “Mini-Deals” Are the Easy Way Out

PON Staff   •  11/30/2019   •  Filed in Dealmaking

Donald Trump campaigned for president in 2016 as the consummate dealmaker, vowing to renegotiate a new nuclear deal with Iran, forge new trade deals with countries ranging from China to Mexico to Japan, and reach creative agreements with the U.S. Congress. Nearly three years into his presidency, few of these promises have come to fruition. … Learn More About This Program

Negotiating for a brighter future

PON Staff   •  10/31/2019   •  Filed in Dealmaking

For decades, the Colorado River has been in trouble. The river supplies water to 40 million people and five million acres of farmland in seven U.S. states and Mexico. But following 19 years of drought and population growth, the water levels of the river’s largest reservoirs, Lake Mead and Lake Powell, have sunk to record lows. … Read Negotiating for a brighter future

Making Business Deals that Thrive Across Cultures

Katie Shonk   •  06/17/2019   •  Filed in Dealmaking

making business deals

The 1998 merger of German automaker Daimler-Benz and the American Chrysler Corporation at first seemed like a match made in heaven, but the honeymoon wore off as the two cultures that made up DaimlerChrysler began to clash. The Americans’ informal behavior, such as using first names rather than titles, made the Germans uncomfortable, while the … Read Making Business Deals that Thrive Across Cultures

Building Trust in Negotiations

Katie Shonk   •  03/18/2019   •  Filed in Dealmaking

building trust in negotiations

Adapted from “Strike the Right Balance Between Trust and Cynicism,” by Harvard Business School professor Max H. Bazerman, first published in the Negotiation Briefings newsletter.

 Negotiators often must choose between trusting their counterparts and being cynical of their motives. The consequences of such decisions can be serious in dealmaking: trust too much, and you’ll lose big; … Read Building Trust in Negotiations

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