On October 31, 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 reports. The bad news has been attributed largely to an impasse with television network CBS over fees, which led to Time Warner blacking
best alternative to a negotiated agreement
Or BATNA, describes a negotiator’s best possible outcome if the current negotiations fail.
The following items are tagged best alternative to a negotiated agreement.
At the Program on Negotiation at Harvard Law School (PON), we are dedicated to helping professionals deal with hard bargainers and resolve even the most challenging disputes. To help you understand the principles of negotiation and conflict resolution, we put together a special report: Dealing With Difficult People.
Discover how to collaborate, negotiate, and bargain with even the most combative opponents. In Dealing With Difficult People, you’ll gain actionable strategies for:
Dealing with people who won’t give you what you want
Holding your ground in difficult situations
Negotiating effectively in the face of adversity
At last, the deal is done. After 18 months of negotiation, eight trips across the country, and countless meetings, you’ve finally signed a contract creating a joint venture with a Silicon Valley firm to manufacture imaging devices using your technology and their engineering.
The contract is clear and precise. It covers all the contingencies and has strong enforcement mechanisms. You’ve given your company a solid foundation for a profitable new business. As you file the contract, a question dawns on you: Now what?
As the U.S. government approaches a potentially catastrophic default on its debt in October, President Obama remains determined to avoid negotiations with Republican leaders on the issue, the New York Times reports, a situation that leaves House of Representatives Speaker John Boehner with an uncertain BATNA, or best alternative to a negotiated agreement.
They say it pays to keep your friends close and your enemies closer, but in negotiation, keeping your enemies—or competitors—close could end you up in court, as Apple’s recent encounter with the U.S. Department of Justice suggests.
The story begins back in 2007 when, unhappy with Amazon’s low, flat price of $9.99 for e-books, five major U.S. pub¬lishers negotiated a new business model for e-book pricing with Apple, which was getting ready to launch the iPad.
Under the prevailing wholesaling model, publishers sold their books and e-books to retailers like Amazon, which could then set whatever price they liked. Apple and the five publishers agreed to switch to a so-called agency model, which would allow the publishers to set their own prices for e-books in exchange for giv¬ing Apple a 30% sales commission. At least one of the publishers then upped the ante by threatening to delay the release of its digital editions to Amazon unless it switched to an agency model. Amazon reluctantly agreed, and e-book prices rose across the industry to about $14.99.
The publishers and Apple claimed that their goal was to increase competition in the e-book market by opening up alternatives to Amazon’s Kindle reader. But the U.S. Department of Justice didn’t see it that way and accused the parties of colluding to artificially raise e-book prices. The five publishers reached a settle¬ment with the government; Apple did not.
Ever win something you wanted, then realize too late you got a raw deal? Here’s how to recognize when backing away is your best bet in a negotiation.
Imagine that while exploring an outdoor bazaar in a foreign country, you see a beautiful rug that would look perfect in your home. While you’ve purchased a rug or two in your life, you’re far from an expert. Thinking on your feet, you guess the rug is worth about $5,000. You decide to make a bid, but a low one. You engage the merchant in some pleasantries and then make an offer of $1,000. She quickly accepts, and the transaction is complete.
How do you feel as you walk away? Pleased with your purchase – which was, after all, far cheaper than you expected – or uneasy about it?
In negotiation, a combination of several negotiation skills and tactics may be needed to break past a difficult impasse. A recent protracted negotiation between North Korea and South Korea provides a case study.
In April, North Korea abruptly removed its workforce from the Kaesong Industrial Complex, a joint venture it launched within its borders nine years ago with South Korea. The complex shut down, and the two nations engaged in seven rounds of negotiations over the course of 133 days to try to reach agreement to reopen it.
With home sales heating up in some parts of the United States, homebuyers are facing competition they haven’t seen since before the real-estate bubble burst, and it’s showing up in the form of packed open houses, multiple bids above the asking price, and all-cash offers.
To take an extreme case, in New York City, low condominium inventory combined with low mortgage rates have driven prices up 12% over the past year, from $829,000 to $930,000, writes Michelle Higgins in the New York Times. Real-estate agents are capitalizing on the frenzy with tactics like one-day-only showings and tight deadlines for bidders to submit their best-and-final offers.
In such an environment, negotiation might seem futile. After all, if a seller has 20 offers, how could you possibly stand out – other than, perhaps, by overbidding? In fact, there are other ways to separate yourself from the pack, while also ensuring that you make smart financial decisions for yourself.
Some negotiations end with a plan of action rather than a signed contract – for example, a plumber agrees to fix the tile damage caused by his work. Other negotiations wouldn’t be appropriate to commemorate in writing, such as how you and your spouse decide to discipline your young child. But in virtually all significant business negotiations, parties should put pen to paper after negotiating the terms of their deal. In fact, contract law requires certain types of deals to be in writing for them to be enforceable.
In negotiation, your best source of power typically is your “best alternative to a negotiated agreement,” or BATNA. By cultivating appealing options away from the table, you free yourself up to walk away in the event of a disappointing deal.
In all likelihood, Dell Inc. founder Michael Dell found himself facing such a BATNA analysis in recent days. Back in February, Dell and private-equity firm Silver Lake Partners announced a deal to buy the company for $13.65 a share. Since then, the deal has faced one obstacle after another, including the threat of a Dell shareholder revolt, the threat of a higher offer from another private-equity firm, and efforts by billionaire activist Carl Icahn to convince Dell to pony up a higher bid. The overarching question: whether Dell would be getting a steal deal, and whether there was any way to stop him.