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.

Deal-Making Negotiation Strategies: Short on Cash? Try Bartering

PON Staff   •  10/20/2020   •  Filed in Dealmaking

bartering

In an economic downturn, negotiation opportunities sometimes dry up because parties think they have nothing left to give. During times like these, bartering flourishes. This article will help you decide how and when to include bartering as a component of your negotiations. Here are four guidelines to help you bargain successfully at the negotiation table. … Read More 

Negotiation In The News: The Art of the Compromise

PON Staff   •  09/30/2020   •  Filed in Dealmaking

Planning is key in negotiation. That doesn’t mean memorizing a predetermined script, but being ready to roll with the punches. The negotiators who worked to transform the hit Broadway musical Hamilton into a feature film learned that lesson at a couple of different points in the process. Their resourcefulness—and ability to stand by their principles—should inspire … Read More 

What’s so great about small talk?

PON Staff   •  09/01/2020   •  Filed in Dealmaking

This spring and summer, professional sports leagues scrambled to negotiate deals with players’ unions to start or resume their seasons with health, financial, and logistical accommodations for the Covid-19 pandemic. Most reached mutually agreeable deals, with some bumps in the road.

Then there was Major League Baseball (MLB).

As they tried to work out when the 2020 … Read More 

Negotiation research you can use: In price negotiations, make them happy with less

PON Staff   •  03/31/2020   •  Filed in Dealmaking

Price negotiations and other distributive (single-issue) negotiations often seem to come with a built-in Catch-22: If you get a great deal on price, your relationship with your counterpart may suffer because they feel as if you’ve won and they’ve lost. In a new study, Singapore Management University professor Michael Schaerer and his colleagues identify a … Read More 

Should You Really Negotiate?

PON Staff   •  03/31/2020   •  Filed in Dealmaking

Imagine that you’re about to hire someone to provide a service—say, to repair your leaky roof, design a new website for your business, or cater a family event. When you receive a price quote, should you try to negotiate a better deal?

Conventional wisdom would answer with a resounding yes. Opening up price negotiations could very … Read More 

Business Contract Mistakes—and How to Avoid Them

Katie Shonk   •  03/16/2020   •  Filed in Dealmaking

When negotiating a business contract, parties are often so focused on reaching agreement that they don’t think enough about how the deal will unfold after the ink has dried. This type of short-term thinking leads to real problems down the road. The following three business negotiation tips can help you adopt a long-term perspective the … Read More 

Negotiation Update: For Amazon in the Big Apple, No Carrots Required

PON Staff   •  02/29/2020   •  Filed in Dealmaking

For some New York politicians, Amazon’s announcement on December 6, 2019, that it was leasing office space in Midtown Manhattan for more than 1,500 employees offered an irresistible opportunity to say, “I told you so.”

“Won’t you look at that,” tweeted New York representative Alexandria Ocasio- Cortez. “Amazon is coming to NYC anyway—*without* requiring the public to … Read More 

Negotiating organizational breakups

PON Staff   •  02/29/2020   •  Filed in Dealmaking

For decades, the United Methodist Church (UMC) has grappled with internal disagreement over its doctrine on LGBTQ rights, which prohibits same-sex marriage and noncelibate gay clergy. Methodists in the United States, who comprise more than half of the church’s 12.5 million members, increasingly have found those positions untenable, particularly after the U.S. Supreme Court legalized … Read More 

When High Prices Are a Bitter Pill to Swallow

PON Staff   •  01/31/2020   •  Filed in Dealmaking

There’s at least one thing that politicians as ideologically dissimilar as President Donald Trump and Senator Elizabeth Warren have agreed on: Prescription drug prices are too high in the United States. Americans pay about $1,200 per year, on average, for their medication, according to the Organization for Economic Cooperation and Development— about twice as much … Read More