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, we are often confronted with the task of dealing with difficult people—those who seem to prefer to set up roadblocks rather than break down walls, or who choose to take hardline stances rather than seeking common ground.
How can you deal with such difficult people?
One tactic you might consider is avoiding the conversation altogether … Read More
Here’s a sobering BATNA negotiation example. On Oct. 31, 2013, Time Warner Cable reported a huge quarterly loss of television subscribers, the largest in its history: 306,000 of its 11.7 million subscribers dropped the company, the New York Times reported. … Read More
How can a negotiator protect herself from bias and influence negotiation strategies at the bargaining table? Knowing one’s best alternative to a negotiated agreement as well as the zone of possible agreement for the deal at hand help prevent bias from leaving value unclaimed. … 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
In negotiation, your best source of power is typically your best alternative to a negotiated agreement, or BATNA. When you are aware that you have an appealing alternative deal to the one you’re working on, you will be less tempted to accept an agreement that doesn’t meet your minimum requirements. A strong BATNA gives you … Read More
The dissolution of a partnership can be fraught with conflict, especially when the business is all in the family. But as Charles V. Bagli recently reported in the New York Times, three New York brothers recently proved that careful planning—and a willingness to trust in fate—can be keys to a peaceful breakup. … Read More
In business negotiations, our mistakes sometimes end up affecting not only the current deal, but our best alternative to a negotiated agreement, or BATNA, in deals that lie down the road. That’s a lesson that Ann Marie Gardner, the founder and editor of the hip new magazine Modern Farmer, has learned the hard way. After … Read More
Negotiating power generally comes from one of three sources, according to Adam D. Galinsky and New York University’s Joe C. Magee. Here are three sources of negotiation power that negotiators can use in negotiations. … 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.