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.

See full description

For Greater Value Creation, Look Beyond Your BATNA

PON Staff   •  08/31/2023   •  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

Business Negotiation Strategies for Managing the Tension Between Claiming and Creating Value

PON Staff   •  12/22/2022   •  Filed in BATNA

business negotiation strategies

When it comes to great business negotiation strategies, there’s no better example than the cast of Friends in their heyday.

David Schwimmer, the actor who played Ross on the hit NBC sitcom Friends, famously convinced the show’s five other leads in the early years of its run to negotiate their contracts with NBC as a team. … Learn More About This Program

Would you like us to inform you when new posts become available?

We hate spam as much as you do. You have our promise not to sell or share your email address — ever! Please read our privacy policy.