BATNA

Best Alternative to a Negotiated Agreement. The true measure by which you should judge any proposed agreement. It is the only standard which can protect you both from accepting terms that are too unfavorable and from rejecting terms it would be in your interest to accept. (Roger Fisher and William Ury, Getting to Yes [Penguin Books, 1991], 100-01)

The following items are tagged BATNA.

Negotiating for Continuous Improvement: Monitor and Assess Your Negotiation Skills

Posted by & filed under Negotiation Skills.

Many organizations subject their executives to rigorous performance reviews, yet few companies include negotiation effectiveness as one of the core competencies they track. Instead, negotiation is usually subsumed under categories such as “emotional intelligence,” or “persuasiveness.” The negotiator-related questions posed in most “36-degree assessments” don’t measure the right skills and abilities, such as preparation. When evaluators do assess negotiations, they typically rely only on post hoc accounts and overlook the details of the bargaining experience.

The Enduring Power of Anchors

Posted by & filed under Negotiation Skills.

In past issues of Negotiation, we’ve reviewed the anchoring effect – the tendency for negotiators to be overly influenced by the other side’s opening bid, however arbitrary. When your opponent makes an inappropriate bid on your house, you’re nonetheless likely to begin searching for data that confirms the anchor’s viability. This testing is likely to affect your judgment – to the other party’s advantage.

Psychologists Amos Tversky and Daniel Kahneman identified the anchoring effect in 1974. Participants watched a roulette wheel that, unknown to them, was rigged to stop at either 10 or 65, the estimated the number of African countries belonging to the United Nations. For half of the participants, the roulette wheel stopped on 10. They gave a median estimate of 25 countries. For the other half, the wheel stopped on 65. Their median estimate was 45 countries. The random anchors dramatically affected judgment.

When Umbrella Agreements Spring Leaks in Dispute Resolution

Posted by & filed under Dispute Resolution.

Negotiators tend to want the best of both worlds. When reaching an agreement, they want to nail down parties’ respective rights and responsibilities, but they also want to retain the flexibility to deal with ever-changing business conditions.

One solution to this apparent dilemma is to craft umbrella, or framework, agreements. (The term umbrella is more commonly used in the business world, while framework is more widely used in legal and diplomatic circles.) Such agreements set out general principals that will apply to more specific give-and-take contracts in the future. An umbrella agreement between a soft-drink company and a grocery chain, for example, would typically cover issues such as exclusivity, invoicing, confidentiality, and termination. Subsequent short-term contracts would set prices and promotional allowances for specific products.

Crisis Negotiations – Rolling the Dice in Court

Posted by & filed under Crisis Negotiations.

Going to trial, it’s said, is like rolling the dice. That proved true when an exasperated federal judge, the Honorable Gregory A. Presnell, ordered litigants to play a game of Rock Paper Scissors if they could not privately resolve their differences over a procedural issue. The lawyers were stalemated on where to depose a witness in the case, despite the fact that their offices were located just four floors apart in the same building. The judge didn’t want to waste public resources resolving such a trivial matter.

Many took the order as yet another exhibit in the case against shortsighted lawyers – and an attempt to shame them and their clients into more constructive behavior. Judge Presnell’s ruling also established a new best alternative to a negotiated agreement, or BATNA, for the parties: The matter would be decided by chance rather than on its merits, an unsettling prospect if each side was convinced of the righteousness of its position.

Conflict Management – Evenhanded Decision Making

Posted by & filed under Conflict Management.

As discussed in past articles, anchoring and framing can bias important decisions in negotiation. A buyer may make a more generous offer than she intended, for example, after a seller drops anchor on a bold demand. A litigant who focuses on his chances of winning in court – a positive frame – may be less likely to settle than if he concentrated on a negative frame: his corresponding chances of losing.

Many researchers have studied how such biases are amplified or moderated by mood, expertise, and personality. Groundbreaking work by professors John D. Jasper and Stephen D. Christman of University of Toledo now suggests that our susceptibility to decision biases is hardwired.

Blessing or Curse: The Right of Refusal

Posted by & filed under Business Negotiations.

When transferring property, sellers sometimes insist on rights of first refusal – the chance to be first in line to repurchase the property if their buyer later decides to sell. Rights of first refusal can be obvious advantages if your financial circumstances later change. If you’re keeping adjoining land, you may wish to protect yourself against the risk of something unattractive being built next door.

Great Negotiator Award 2012

Posted by & filed under Negotiation Skills.

The Program on Negotiation at Harvard Law School, in conjunction with the Future of Diplomacy Project at Harvard Kennedy School, honored distinguished statesman and former Secretary of State James A. Baker III as the recipient of their Great Negotiator Award for 2012. Secretary Baker served under President George H.W. Bush from 1989 to 1992.

A panel discussion was held on the afternoon of March 29 and included Program on Negotiation faculty members James Sebenius and Robert Mnookin, as well as Harvard Kennedy School faculty member Nicholas Burns. The Great Negotiator Award was created twelve years ago by the Program on Negotiation to recognize an individual whose lifetime achievements in the field of negotiation and dispute resolution have had a lasting impact.

Specific versus Abstract Negotiation Skills Training

Posted by & filed under Negotiation Skills.

Researchers have argued that negotiators learn more from cases and real-world experiences when they can take away an abstract version of the lesson. Such abstractions come from analogies developed across two or more different negotiation contexts, say Leigh Thompson and Dedre Gentner of Northwestern University and Jeffrey Loewenstein of the University of Texas, who propose that such analogical reasoning be incorporated into negotiation training.

But researchers Simone Moran and Yoella Bereby-Meyer of Ben Gurion University and Max H. Bazerman of Harvard Business School argue that teaching people more general negotiation principles – such as “value can be created” – enables a more successful transfer to a broader range of new negotiation tasks than focused analogies.

Fostering Cultural Intelligence in International Negotiations

Posted by & filed under International Negotiation.

In a Harvard Business Review article, P. Christopher Earley and Elaine Mosakowski describe the value of improving your cultural intelligence, or the ability to make sense of unfamiliar contexts and adapt to them. Some people are naturally skilled at determining whether a person’s behavior is unique to him or determined by his culture. For others, this process requires more effort. Regardless, this ability is important for successful international negotiations.

Earley and Mosakowski illustrate this point through a domestic and an international example. Peter, a Los Angeles-based sales manager for Eli Lilly pharmaceuticals, was transferred to the company’s Indianopolis headquarters. In L.A., Peter’s confrontational, high-pressure style was the norm and effectively motivated his sales staff. In Indianopolis, his new team disliked his hard charging ways and avoided the challenges he set for them.