BATNA

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.


Discover how to unleash your power at the bargaining table in this free special report, BATNA Basics: Boost Your Power at the Bargaining Table, from Harvard Law School.


Negotiation Examples in Real Life: BATNA and Negotiation Scenarios Where Alternatives are Preferable to Negotiated Agreements

PON Staff   •  06/21/2016   •  Filed in BATNA

One of the most popular questions concerning negotiation strategy and an area of negotiation research that draws heavily on negotiation examples in real life is how do negotiators identify their BATNA, or best alternative to a negotiated agreement, and even better, how do they identify their counterpart’s BATNA? Consider the saga of a company that … Read More 

For Modern Farmer Magazine, a Bad BATNA

Katie Shonk   •  06/06/2016   •  Filed in BATNA

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. … Read More 

BATNA: Examples of 10 Hard Bargaining Negotiating Skills and Negotiation Strategies

Keith Lutz   •  06/01/2016   •  Filed in BATNA

Negotiating skills for dealing with situations as they arise at the bargaining table are always in high demand. Strategies prepared before coming to the bargaining table are one way to anticipate events during negotiations, but expert negotiators know that the bargaining style of their counterpart will impact, positively or negatively, even the best laid plans. … Read More 

Exercising Its BATNA, American Apparel Ousts Dov Charney

Katie Shonk   •  05/12/2016   •  Filed in BATNA

On June 18, the board of retailer American Apparel informed the company’s controversial founder, Dov Charney, that it was ousting him from his roles as chairman and CEO. For years, Charney had fended off sexual-harrassment lawsuits and rumors of inappropriate behavior. But only when the company’s creditors grew anxious about its long-term liability did the … Read More 

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