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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Dear Negotiation Coach: Negotiating Upgrades

PON Staff   •  04/12/2017   •  Filed in Dealmaking

Q: My company, a large multinational, contracts with an outside vendor for some of our software infrastructure. Due to new regulatory requirements, we have asked the vendor’s team to upgrade certain features of the software. We think that we should get these upgrades for free because these enhanced features may be needed by their other clients … Read More 

Dealmaking: Don’t Wait for Them to Blink

PON Staff   •  04/06/2017   •  Filed in Dealmaking

dealmaking

In labor disputes and dealmaking, negotiators on both sides are likely to overestimate the odds that the other side will view their proposals as fair. In fact, however, self-serving perceptions of what constitutes a fair settlement can cause negotiators to remain miles apart. These factors appear to have come into play when the National Hockey … Read More 

Dealmaking: Dealing with the Other Side’s Constituents

PON Staff   •  04/03/2017   •  Filed in Dealmaking

Dealmaking: Dealing with the Other Side's Constituents

During a meeting with a potential customer, a new salesperson leaves the room several times to make phone calls. Each time when she returns, she tells the customer she can’t accept the terms they just negotiated. Exasperated by her apparent lack of authority, the customer ends the meeting abruptly. … Read More 

When Forming First Offers, Take Precision into Account

PON Staff   •  03/14/2017   •  Filed in Dealmaking

What should your first offer be in a negotiation?

The question doubtless has led to sleepless nights for negotiators who understand that the first offer in a negotiation tends to have a strong anchoring effect on the haggling that may follow. Because even extreme offers can pull the discussion in their direction, the question of how … Read More 

BATNA: Negotiation Preparation to Help Avoid Giving Up at the Bargaining Table

PON Staff   •  03/07/2017   •  Filed in Dealmaking

batna negotiation preparation to help avoid giving up at the bargaining table

When you expect an opponent to be competitive, your confidence in the outcomes you can achieve in negotiation is likely to plummet. In negotiation research with Adam Galinsky of Northwestern’s Kellogg School of Management, negotiators were provided with some background about their counterpart including information on how competitive their counterpart has been in previous negotiations. … Read More 

Successes & Messes: Painting a Suspicious Picture

PON Staff   •  02/08/2017   •  Filed in Dealmaking

In negotiation, a good agent can be hard to find. Three New York art dealers and a Russian billionaire learned that lesson the hard way in negotiations over the sale of a painting by Leonardo da Vinci, as reported by Bloomberg and the New York Times.

A case of mistaken identity
The strange saga began in 2005, … Read More 

A Dealmaking President’s Opening Moves

PON Staff   •  02/08/2017   •  Filed in Dealmaking

As a lifelong dealmaker, Donald J. Trump will enter the Oval Office with considerable bargaining experience in the business world. But his blank slate as an elected official combined with his fluctuating positions on key issues such as immigration and tax policy throughout the presidential race have left many wondering what kind of negotiator he … Read More 

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