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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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 What to Do Before the Deal Breaks Down 

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 … Learn More About This Program 

A Win Without Regrets: Winning an Auction and Not Feeling Disappointed

PON Staff   •  04/09/2012   •  Filed in Dealmaking

We have all been in situations in which we are pitted against others in competition for a certain item, whether an award, a promotion, or even in an auction. Often, this competitive atmosphere pushes you to ‘play’ harder than you normally would, overvaluing your objective and over-assessing the importance of victory. Often when a group … Learn More About This Program 

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 Sellers: Set the right price 

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