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.

Changing the Rules of the Game

PON Staff   •  12/31/2019   •  Filed in Dealmaking

When industry disrupters and established firms face off at the negotiating table, they’re likely to have different ideas about what’s negotiable and what’s not. Such was the case when screening service Netflix and two major U.S. theater chains tried to negotiate a wide theatrical release for The Irishman, the Netflix-financed Martin Scorsese film. Their impasse … Read More 

Don’t get schooled in your next negotiation

PON Staff   •  12/31/2019   •  Filed in Dealmaking

Chicago mayor Lori Lightfoot, a former federal prosecutor and head of the Chicago Police Board, was elected in 2018 as a reformer calling for big improvements to Chicago’s chronically underfunded public schools, including smaller class sizes, and more nurses and social workers. One of Lightfoot’s first major challenges after being sworn in on May 20, 2019, … Read More 

How to Counteroffer in Business Negotiation

Katie Shonk   •  11/11/2019   •  Filed in Dealmaking

Imagine you’ve received a salary offer for a new job that’s less than you’d hoped for, or a client has delivered a “take it or leave it” ultimatum. While there is ample advice available to negotiators on how to make the first offer in negotiation, the question of how to counteroffer in business negotiations often … Read More 

Negotiating for a brighter future

PON Staff   •  10/31/2019   •  Filed in Dealmaking

For decades, the Colorado River has been in trouble. The river supplies water to 40 million people and five million acres of farmland in seven U.S. states and Mexico. But following 19 years of drought and population growth, the water levels of the river’s largest reservoirs, Lake Mead and Lake Powell, have sunk to record lows. … Read More 

Maximizing Attention In Negotiation

PON Staff   •  08/31/2019   •  Filed in Dealmaking

The New York state Assembly and Senate are on a roll. They’ve approved 935 bills this session, 50% more than in recent years and the highest number since 2006, according to the New York Public Interest Research Group. With a wave of progressives enabling Democrats to control the state Senate for the first time since 2010, … Read More 

Making Business Deals that Thrive Across Cultures

Katie Shonk   •  06/17/2019   •  Filed in Dealmaking

The 1998 merger of German automaker Daimler-Benz and the American Chrysler Corporation at first seemed like a match made in heaven, but the honeymoon wore off as the two cultures that made up DaimlerChrysler began to clash. The Americans’ informal behavior, such as using first names rather than titles, made the Germans uncomfortable, while the … Read More 

Building Trust in Negotiations

Katie Shonk   •  03/18/2019   •  Filed in Dealmaking

Adapted from “Strike the Right Balance Between Trust and Cynicism,” by Harvard Business School professor Max H. Bazerman, first published in the Negotiation Briefings newsletter.

 Negotiators often must choose between trusting their counterparts and being cynical of their motives. The consequences of such decisions can be serious in dealmaking: trust too much, and you’ll lose big; … Read More 

Claiming Value in Negotiation: Do Extreme Requests Backfire?

Katie Shonk   •  02/11/2019   •  Filed in Dealmaking

Negotiators often wonder how they can get the biggest slice of the pie when claiming value in negotiation. Certain deal-making techniques can be useful, such as the well-known “foot in the door” technique, which is designed to get people to comply with a large request by securing their agreement to a smaller one first, and … Read More 

Case Study of Business Negotiations and Deal Making: Giving Voice to Negotiators Away from the Bargaining Table

PON Staff   •  02/07/2019   •  Filed in Dealmaking

Sometimes negotiators focus too much on the bargaining session at hand, to the detriment of bargainers away from the negotiation table, a group whose concerns and input is just as valid as those of the negotiators themselves. Here are some negotiation tips to help make sure your bargaining strategies include the voices and concerns of … Read More