worst alternative to a negotiated agreement

The opposite of one’s best alternative to a negotiated agreement, or BATNA, WATNA is the worst possible outcome for you or your principal should negotiations fail.

The following items are tagged worst alternative to a negotiated agreement.

Finding the Right Process in India

Posted by & filed under Crisis Negotiations.

In 1995, a new government came into power in the Indian state of Maharashtra and canceled a 20-year power purchase agreement with the Dabhol Power Company, a joint-venture formed by Enron, General Electric, and Bechtel. Claiming that the deal was improper and even illegal, the government declared publicly that it would not renegotiate.

A Cash-Out Transaction: Cox Communications

Posted by & filed under Business Negotiations.

On August 2, 2004, Barbara Cox Anthony and Ann Cox Chambers, two sisters who together owned 73% of Cox Communications, announced that they wanted to cash out the minority shareholders of their company. Their initial offer was $32 per share, or a 14% premium to the preannouncement trading price of approximately $28 per share.

Negotiating in China: The Importance of Relationship Building

Posted by & filed under International Negotiation.

Although most Americans treat those they know better than they treat strangers, Chinese behavior towards insiders and outsiders tends to be more extreme than in the United States. A guiding principle in Chinese society is guanxi – personal relationships with people from whom one can expect (and who expect in return) special favors and services. Family ties are paramount, but friends, fellow students, and neighbors can also join the inner circle. As a foreigner, you can cultivate guanxi either by hiring people with close ties to your counterpart or by developing your own relationships with key contacts.

Keeping the Game Out of Court

Posted by & filed under Business Negotiations.

Sometimes those on opposite sides of a bitter dispute can achieve great gains – if only they can spot the ways in which they are similar.

In 2001, the Metropolitan Intercollegiate Basketball Association (MIBA), an organization of five New York-area colleges best known for staging college basketball’s National Invitation Tournament, filed a lawsuit against the National Collegiate Athletic Association (NCAA). MIBA allege that certain NCAA rules governing team participation in preseason and postseason tournaments restricted school’s participation in MIBA tournaments, in violation of various antitrust laws. After four years of litigation, the two parties announced not only that they would settle a lawsuit but also that the NCAA would purchase the rights to the MIBA preseason and postseason tournaments.

Status Anxiety

Posted by & filed under Business Negotiations.

Sometimes in negotiation we are forced to deal not only with the issues on the table but also with concerns about status.

One famous instance took place in the late 1980s, when Robert Campeau, head of the Campeau Corporation and then one of Fortune magazine’s “50 Most Fascinating Business People,” tried to acquire Federated Department tores, the parent company of the prestigious department store Bloomingdale’s.

A bidding war over Bloomingdale’s escalated between Campeau and R.H. Macy. Campeau won with an irrationally high offer – but had to declare bankruptcy shortly thereafter.

The Fiscal Cliff and the Debt Ceiling: Program on Negotiation Chair Robert Mnookin Discusses Recent and Future Negotiations Between Congressional Republicans and the White House

Posted by & filed under Crisis Negotiations.

Though Congress and the President were able to reach a deal and avoid the dreaded fiscal cliff, both sides engaged in some tough negotiating which has both bewildered and captivated the United States for months. Given all of the posturing and tough talk, some may ask: Is there a method to this madness?

A Value-Creating Condition Thwarted

Posted by & filed under Business Negotiations.

In late 1999, with its stock in free fall, NCS HealthCare, a provider of pharmacy services to long-term care facilities, began “exploring strategic alternatives” – code in the mergers and acquisitions world that NCS’s board wanted to put the company up for sale.

In 2001, Omnicare, a larger provider in the same general industry, offered to buy NCS for $270 million, a number lower than the value of the company’s debt. The deal would have left the company’s stockholders with nothing, and talks broke down when NCS demanded a higher price. In June 2002, Omnicare’s fierce rival Genesis HealthCare came to the table with an offer for NCS. Fearful of having its deal stolen away by Omnicare, which had just beaten Genesis in a bidding contest for another company, Genesis proposed a condition on the deal. It would make an offer only if NCS’s chairman and president, who together held a majority of the voting shares, committed to the Genesis deal and rejected any competing offer from Omnicare. NCS accepted this condition, and the merger was announced on July 28, 2002.

The Story of Goldman Sachs: Negotiating a Vision

Posted by & filed under Business Negotiations.

In 1986, the investment bank Goldman Sachs was a $38 billion business owned by more than 100 active and retired partners.

While the partnership structure had insulated the company from the vicissitudes of the stock market and given the company a strong culture of teamwork, it had some significant disadvantages, particularly an unstable capital base and an inability to grow by making acquisitions with stock.