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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To better understand other negotiators, consider the context

PON Staff   •  03/15/2013   •  Filed in Dealmaking

Imagine yourself in the following scenarios:

You are given the opportunity to choose between two colleagues to be your teammate on a lengthy negotiation. As part of your decision-making process, you contemplate which individual you will be likely to get along with best.
One of your children accuses you of siding with her brother in … Read More 

From negotiation to auction: The rise of real-time bidding

PON Staff   •  02/15/2013   •  Filed in Dealmaking

Because of a technological innovation called real-time bidding, or RTB, more and more online-advertising transactions are being completed through auctions rather than negotiations. The transformation could foreshadow similar changes in other realms, as negotiations gain the potential to become more automated.

How RTB works
In the dark ages of the Internet, websites would negotiate individually with potential … Read More 

Sellers: Stay out of legal hot water

PON Staff   •  01/09/2012   •  Filed in Dealmaking

When it comes to business negotiations, you probably understand the importance of being as principled as possible to protect your reputation and ward off legal trouble. You probably expect your counterparts to follow the straight and narrow as well. Yet negotiators often have only a fuzzy grasp of which claims and strategies are legal and … Read More 

Sellers: Set the right price

PON Staff   •  10/10/2011   •  Filed in Dealmaking

Adapted from “Why Your Selling Price May Be Too High,” first published in the Negotiation newsletter, October 2007.

Imagine that you are moving from one city to another and putting your home on the market. How would you determine the true value of the residence? Now imagine that you are in the market for the same … Read More 

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