In negotiation, BATNA refers to your “best alternative to a negotiated agreement,” or the best outcome you can expect if you fail to reach agreement at the bargaining table with your counterpart. An evaluation of your BATNA is critical if you are to establish the threshold at which you will reject an offer. Effective negotiators determine their BATNAs before talks begin.
When you fail to determine your alternative, you’re liable to make a costly mistake—rejecting a deal you should have accepted or accepting one you’d have been wise to reject. In negotiation, it’s important to have high aspirations and to fight hard for a good outcome. But it’s just as critical to establish a walkaway point that is firmly grounded in reality.
There are four steps to assessing your BATNA: List your alternatives; evaluate these alternatives; establish your BATNA based on these alternatives; and calculate your reservation value, which is the lowest-valued deal you are willing to accept. If the value of the deal proposed to you is lower than your reservation value, you’ll be better off rejecting the offer and pursuing your BATNA. If the final offer is higher than your reservation value, you should accept it.
One drawback to exploring your best alternative is in spending too much time and money in researching it. This can lead to a feeling of entitlement in negotiation, which may cause the negotiator to expect too much from the bargaining process.
Articles offer numerous BATNA examples and explore the concept of one’s BATNA, as well as how to effectively identify your BATNA in negotiations and how to use this knowledge effectively in any type of negotiation, whether in business, international, or personal negotiations.
In negotiation, your best source of power is typically your best alternative to a negotiated agreement, or BATNA. Having a strong outside alternative enables you to walk away from a deal that doesn’t meet your needs or that would compromise your vision or ethics.
But when you are dealing with a negotiating partner who seems irreplaceable, … Read More
What should a business negotiator do when she feels that her BATNA is weak or that the only issues on the bargaining table involve issues of price, or “haggling” scenarios? In this article, the Program on Negotiation offers business negotiation tips for negotiators grappling with a “weak BATNA.” … Read More
A negotiator’s BATNA, negotiating with the knowledge of her best away-from-the-negotiation-table options, is essential information that every effective bargainer seeks to learn about herself, and her counterpart, prior to engaging in negotiations. … Read More
What is BATNA? Negotiations in which each counterpart has a best alternative to a negotiated agreement are scenarios in which the incentive to work together must exceed the value of alternatives away from the negotiation table. One negotiation example, labor strikes highlight common conflict-resolution pitfalls.
The latter half of 2012 has seen a slew of labor … Read More
Sources of power at the negotiation table involve information and in BATNA negotiations, knowledge of that alternative to a negotiated agreement is a source of power during negotiation scenarios … Read More
In dealmaking, knowing your BATNA is the first step to claiming value and effective negotiation strategy. Learn how BATNAs work in negotiation examples from real life, along with advice on negotiation techniques to use at the bargaining table. … Read More
Knowing your BATNA, and your counterpart’s best alternative to a negotiated agreement, is at the core of effective negotiation strategy. Learn how important your BATNA, and your counterpart’s BATNA, can be in this story drawn from negotiation examples from real life. … Read More
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Understanding how to arrange the meeting space is a key aspect of preparing for negotiation. In this video, Professor Guhan Subramanian discusses a real world example of how seating arrangements can influence a negotiator’s success. This discussion was held at the 3 day executive education workshop for senior executives at the Program on Negotiation at Harvard Law School.
Guhan Subramanian is the Professor of Law and Business at the Harvard Law School and Professor of Business Law at the Harvard Business School.