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.

10 Top Business Negotiations

PON Staff   •  11/03/2016   •  Filed in Dealmaking

Looking back on the past, 2013 witnessed a series of colorful mergers, acquisitions, and other deals. Here are the 10 top negotiations and negotiation trends of that year from which business dealmakers can learn. … Read More 

In Purchasing Negotiations, Pairs of Men Lean to the Extreme

PON Staff   •  10/07/2016   •  Filed in Dealmaking

When we make decisions about what to buy, we often do so with another person. Domestic partners make joint purchasing decisions about homes, appliances, cars, and vacations. Pairs of college students often decide together what apartment to rent. Two investment bankers might select stocks together. And when two friends plan a night out, they might … Read More 

How to Avoid Faulty Negotiated Agreements

PON Staff   •  10/06/2016   •  Filed in Dealmaking

Some of the trickier aspects of designing the right contract with your agent include properly aligning her incentives and monitoring her work. Supervising your agent can be especially hard when she knows more than you do about the area of work. For example, hiring an agent who is a lawyer and paying her on an … Read More 

Are You in It to Win It?

PON Staff   •  04/08/2016   •  Filed in Dealmaking

For the New York Mets, a deal with outfielder Yoenis Céspedes is all in the timing

Just because a deal isn’t working out in the present doesn’t mean it never will. That’s the key takeaway from a recent contract agreement reached between the New York Mets and star outfielder Yoenis Céspedes this past January.

A temporary impasse

Céspedes, … Read More 

A Bidding War at Sundance

PON Staff   •  04/08/2016   •  Filed in Dealmaking

Filmmaker Nate Parker sticks to his dreams in a heated “negotiauction.”

Most sellers dream about driving up the price of a commodity in a bidding war. But how can you stay true to your nonfinancial goals in an auction fixated on price? Nate Parker, the filmmaker, star, and producer behind the film The Birth of a … Read More