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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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

Case Study of Business Negotiations and Deal Making: Giving Voice to Negotiators Away from the Bargaining Table

PON Staff   •  02/07/2019   •  Filed in Dealmaking

negotiations

Sometimes negotiators focus too much on the bargaining session at hand, to the detriment of bargainers away from the negotiation table, a group whose concerns and input is just as valid as those of the negotiators themselves. Here are some negotiation tips to help make sure your bargaining strategies include the voices and concerns of … Learn More About This Program

Negotiation in the news: “Victim” of Banksy’s prank laughs all the way to the bank

PON Staff   •  12/31/2018   •  Filed in Dealmaking

They say negotiation is an art, and that certainly was the case on October 5, 2018, when the mysterious artist known as Banksy turned a Sotheby’s auction into a clever—and very expensive—piece of performance art.
Drawing a crowd
An anonymous and highly celebrated street artist, British-based Banksy is known for his subversive graffiti and cheeky pranks, such as … Learn More About This Program

Negotiation in the news: When forging new partnerships, get the fit right from the start

PON Staff   •  08/30/2018   •  Filed in Dealmaking

Organizations planning a merger need to come up with a concrete plan for ensuring they’ll mesh rather than clash. Facebook’s leaders and WhatsApp’s founders appeared to skip that vital step when negotiating the social media giant’s purchase of the text-messaging app in 2014—an oversight that led to mounting frustrations on both sides and, ultimately, a decisive … Learn More About This Program

Negotiation in the News: How Congress got to “yes” on new banking rules

PON Staff   •  07/31/2018   •  Filed in Dealmaking

It’s hardly news that in the U.S. Congress, bipartisan dealmaking has been virtually nonexistent for years. That’s why it was newsworthy when Democrats and Republicans came together to negotiate changes to the Dodd-Frank law, which tightened regulations on banks and other firms following the 2008 financial crisis.
Accounting for the opposition
After President Donald Trump took office, … Learn More About This Program

How to Write a Contract that Lasts

Katie Shonk   •  07/23/2018   •  Filed in Dealmaking

How to write a contract

Joint ventures, strategic alliances, purchasing agreements, and other types of partnerships between organizations often begin with a great deal of promise—and a hefty amount of risk. Serious misunderstandings and opportunistic behavior are relatively common in such relationships. Formal contracts offer a method for reducing such risk, but negotiators and their attorneys are often unsure about … Read How to Write a Contract that Lasts

Deal Design: Strategies for Complex Dealmaking

Katie Shonk   •  06/18/2018   •  Filed in Dealmaking

complex dealmaking

As experienced negotiators well know, the more parties involved in a negotiation, the more difficult it often is to come to agreement, due in part to the logistical challenge of making sure each voice is heard. Yet multiparty negotiation offers considerable benefits. Most notably more opportunities for making tradeoffs and creating value in negotiation than … Read Deal Design: Strategies for Complex Dealmaking

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