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.

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How to Make a Good Deal When You Lack Power

PON Staff   •  12/02/2021   •  Filed in BATNA

make a good deal

Imagine yourself in the following negotiation scenarios and attempting to make a good deal:

You’re a chef who is having trouble finding cooks in an oversaturated restaurant market. You’re so desperate to get fully staffed that you find yourself making significant concessions on salary, scheduling, and other issues during interviews with potential hires.
You are … Read How to Make a Good Deal When You Lack Power 

How to Deal with a Hardball Strategy When You Have a Weak BATNA

PON Staff   •  11/18/2021   •  Filed in BATNA

hardball strategy

In negotiation, visions of collaborating to create new sources of value can quickly evaporate when the other party engages in a hardball strategy—such as penalizing us financially, attacking our reputation, walking away, or threatening to do all of the above. Suddenly we find ourselves on the defensive, scrambling to do more than just break even.

That’s … Learn More About This Program 

For Greater Value Creation, Look Beyond Your BATNA

PON Staff   •  10/14/2021   •  Filed in BATNA

value creation

For value creation in negotiation, you may need to look beyond your greatest source of power. You may have learned— perhaps in this newsletter or in Roger Fisher, William Ury, and Bruce Patton’s landmark negotiation book Getting to Yes: Negotiating Agreement Without Giving In (Penguin, 1991)—that your most powerful asset is often a strong BATNA, or … Learn More About This Program 

Negotiation research you can use: The irrational impact of disappearing BATNAs

PON Staff   •  04/01/2021   •  Filed in BATNA

In negotiation, a strong best alternative to a negotiated agreement, or BATNA, is generally regarded as our best source of power. When we know we can walk away and get a great deal elsewhere, we’ll insist on an even better agreement at our current bargaining table. Our BATNA powerfully anchors our targets, first offers, and … Learn More About This Program 

For Business Negotiators, Patience Can be a Virtue

PON Staff   •  12/22/2020   •  Filed in BATNA

business negotiators

Business negotiators know that persistence and tenacity can make all the difference between impasse and a game-changing breakthrough. Take the saga behind Microsoft’s 2013 announcement of its pending $7.2 billion acquisition of Finnish mobile phone company Nokia’s handset and services business. The two parties engaged in many months of fruitless talks before either side believed … Learn More About This Program 

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