Deadlock: Definition, Example and Related Terms
What is a Deadlock ?
Imagine you and your friend both want the same thing, but you can't both have it at the same time. You both refuse to give up until the other one does. You're stuck in a situation where no one is winning - this is what we call a 'deadlock'.
Now, let's think about this in a business scenario. In business, a deadlock is a situation where two or more parties are unable to proceed or come to an agreement because each party is waiting for the other to give in or make a move. This can happen in commercial contracts when two companies, or parties, can't agree on certain terms of the contract and neither is willing to compromise or back down. This can result in a standstill where no progress can be made.
Deadlocks can be very harmful to businesses as they can lead to delays, increased costs and can even ruin business relationships.
Example(s)
Scenario Description Two companies A and B are negotiating a supply contract. Company A wants a 10% discount for bulk orders, but Company B is only willing to give a 5% discount. In this scenario, a deadlock has occurred because neither company is willing to compromise on the discount rate. The negotiation is at a standstill because neither company is willing to move from their position. This deadlock could potentially delay the contract and result in lost business opportunities for both companies. A software development company and a client are in disagreement over the scope of a project. The client wants additional features added, but the software company is unwilling to do so without additional payment. This is another example of a deadlock, where neither party is willing to budge from their position. The software company won't add additional features without further payment, and the client is unwilling to pay more. This deadlock could lead to delays in the project and a breakdown in the relationship between the client and the software company.