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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Redoing the deal: Lessons from the NAFTA renegotiations

PON Staff   •  09/30/2018   •  Filed in Dealmaking

During the 2016 presidential campaign, then-candidate Donald Trump blamed the trilateral North American Free Trade Agreement (NAFTA) among Canada, Mexico, and the United States for the U.S. trade deficit with Mexico and lost American manufacturing jobs. Upon taking office, Trump said he was determined to either renegotiate NAFTA or walk away from the pact. Mexican president … Read More 

Building Consensus, One Justice at a Time

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

When U.S. Supreme Court Justice Anthony Kennedy announced on June 27 that he would retire at the end of July, many conservatives were jubilant, while many on the political left were devastated. These opposite reactions grew out of shared beliefs: that President Donald Trump will nominate a right-leaning judge to replace Kennedy, the frequent swing … Read More 

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 … Read More 

Ask A Negotiation Expert: Dealmaking Secrets from Henry Kissinger

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

Recently, more than 1,600 international relations experts from across the political spectrum overwhelmingly rated Henry Kissinger, who served under former presidents Richard Nixon and Gerald Ford, the most effective secretary of state of the last half-century. In their new book, Kissinger the Negotiator: Lessons from Dealmaking at the Highest Level (Harper, 2018), James K. Sebenius, … Read More 

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, … Read More 

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 More 

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