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.

See full description

Top Ten Business Deals of 2013: Office Depot – Office Max

PON Staff   •  01/14/2014   •  Filed in Dealmaking

Office Depot’s $976 million, all-stock acquisition of OfficeMax, announced on February 20 and completed on November 5, was widely praised as an important step toward consolidating the office-supply industry, which has suffered from a glut of stores amidst competition from online retailers and declining demand for paper and ink. … Read More 

Top Ten Business Deals of 2013: The “Burgers and Ketchup” Acquisition

PON Staff   •  01/14/2014   •  Filed in Dealmaking

On February 14, 2013, the news broke that Berkshire Hathaway, the conglomerate run by Warren Buffett, was planning to purchase H.J. Heinz—and its iconic Heinz ketchup—for $23 billion. Joining Berkshire Hathaway in the acquisition was 3G Capital Management, a Brazilian-backed investment firm that owns a majority stake in Burger King. As such, the deal marked … Read More 

Top Ten Business Deals of 2013: William Morris and IMG

PON Staff   •  01/14/2014   •  Filed in Dealmaking

In early December, super-agent Ari Emanuel’s William Morris Endeavor talent agency and private equity backer Silver Lake won a bidding war for the sports and media talent agency IMG Worldwide in a $2.3 billion deal.
Emanuel, whose notoriously ruthless negotiating and management style was parodied in Jeremy Piven’s Ari Gold character in the TV show Entourage, … Read More 

Dealmaking: Why It’s Tempting to Trust Your Gut

Max Bazerman   •  12/05/2013   •  Filed in Dealmaking

In his best-selling novel Blink, Malcolm Gladwell scans the psychological literature and uncovers fascinating nuggets of knowledge.

He describes people who can assess the integrity of a work of art within seconds, predict the likelihood that a couple will get divorced based on a short conversation, and assess their romantic interest in another on a “speed … Read More 

What If We Have the Same Social Motive at the Bargaining Table?

PON Staff   •  10/21/2013   •  Filed in Dealmaking

When two people share the same motive, they fall prey to the same flaws and reinforce each other’s failings. Consider a labor negotiation in which the chief management negotiator withholds information about revenue projections, while the labor leader holds back details about workforce sentiment. Impasse is the predictable result. When you’re negotiating with a fellow … Read More 

When You Shouldn’t Go It Alone

Lawrence Susskind   •  09/13/2013   •  Filed in Dealmaking

A five-year old American manufacturer of medical equipment has just secured a patent on its primary product, a new kind of heart monitor. The potential market is even stronger than the company imagined, yet its second round of venture capital funding is coming to an end. A few other manufacturers are about to go public … Read More 

Deal Making Without a Net: Yahoo’s Tumblr Acquisition

Katie Shonk   •  07/02/2013   •  Filed in Dealmaking

On May 19, Internet company Yahoo announced that it was purchasing the blogging service Tumblr for about $1.1 billion in cash. The acquisition could put a fresh face on the aging Internet company and provide it with a profitable revenue source—or it could turn out to be another instance of the Web pioneer overpaying for … Read More 

What to Do Before the Deal Breaks Down

Jeswald Salacuse   •  06/20/2013   •  Filed in Dealmaking

Whenever one side fails to meet its contractual obligations, renegotiation is more likely to succeed if the parties have a strong relationship. Ideally, the aggrieved party will value long-term relations more than potential gains from a claim for breach of contract. For example, a bank will be more willing to renegotiate a loan with a … Read More 

Would you like us to inform you when new posts become available?

We hate spam as much as you do. You have our promise not to sell or share your email address — ever! Please read our privacy policy.