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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Negotiation research you can use: Promoting cooperation between teams

PON Staff   •  06/30/2018   •  Filed in Dealmaking

When a team negotiates on behalf of an organization, it can often achieve more than an individual would thanks to the team’s cumulative knowledge and experience. Yet team negotiations can create new problems. Groupthink—the tendency to go along with the dominant point of view rather than challenging it—can promote simplistic decision making in teams. And … Read More 

Deal Design: Strategies for Complex Dealmaking

Katie Shonk   •  06/18/2018   •  Filed in Dealmaking

complex dealmaking

As experienced negotiators well know, the more parties involved in a negotiation, the more difficult it often is to come to agreement, due in part to the logistical challenge of making sure each voice is heard. Yet multiparty negotiation offers considerable benefits. Most notably more opportunities for making tradeoffs and creating value in negotiation than … Read More 

Deal Design Guidelines: Set Yourself Up for a Better Deal

PON Staff   •  03/26/2018   •  Filed in Dealmaking

deal design

Without realizing it, we leave many of our most important decisions in negotiation up to chance. When talking to a potential negotiating partner, we may assume that we have met the best person possible to do this particular deal. We make tacit assumptions about whether we’ll negotiate in person, what we’ll discuss, how long the … Read More 

In the room where it happened: A tale of two meetings

PON Staff   •  02/28/2018   •  Filed in Dealmaking

March-18-1

On September 5, 2017, President Donald Trump announced that in six months he would phase out Deferred Action for Childhood Arrivals (DACA), the Obama-era policy that has shielded from deportation about 800,000 people brought to the United States illegally as children. Members of Congress seeking permanent protections for the so-called Dreamers covered under DACA then … Read More 

Create value by collaborating with competitors

PON Staff   •  12/31/2017   •  Filed in Dealmaking

In the business world, organizations take competition for granted. Companies and their employees work so hard to outperform and outsell their direct competitors that they often overlook opportunities to meet their goals by working with one another. But recent high-profile negotiations highlight ways in which competitors might be able to benefit from innovative partnerships that allow … Read More 

Successes & Messes: With a switch in focus, migrant activists gain ground

PON Staff   •  11/30/2017   •  Filed in Dealmaking

In the U.S. agricultural industry, the migrant workers, many of them undocumented, who toil long hours on fields and farms have long faced abuse, low wages, substandard living conditions, and even enslavement. But a new model of negotiating for better working conditions developed by a group of migrant workers in Immokalee, Fla., is beginning to bring about improvements … Read More 

Success & Messes: “Chuck and Nancy” find their leverage

PON Staff   •  10/31/2017   •  Filed in Dealmaking

What’s our leverage? U.S. Senate minority leader Chuck Schumer asked himself that question continually during the congressional recess this August, he told the New York Times, following the Republicans’ multiple failed attempts to repeal the Affordable Care Act. By answering that question, Schumer and House minority leader Nancy Pelosi were able to set up their party … Read More 

Back up your offer with a strong rationale

PON Staff   •  09/30/2017   •  Filed in Dealmaking

Imagine that you are a café owner who is soliciting quotes for a redesign of your space. One of the interior designers you’ve been talking to is known for being affordable, if not innovative. But the designer’s initial estimate, $20,000, is well over your $16,000 budget for the project and, you believe, excessive. As you … Read More 

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