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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BATNA in Negotiation: A Key Source of Power

Katie Shonk   •  07/20/2020   •  Filed in BATNA

batna in negotiation

In July 2019, the U.S. Federal Trade Commission (FTC) imposed a roughly $5 billion fine on Facebook for mishandling its users’ personal data. It was the biggest penalty the U.S. government has levied against a technology company, yet in Congress and beyond, praise for the settlement was muted. The agreement highlights the difficulty of negotiating … Read More 

More than just a game: Negotiating with integrity

PON Staff   •  03/31/2020   •  Filed in BATNA

In competitive realms, it can be especially difficult to negotiate with integrity, unity, and a long-term perspective. Two recent stories from professional sports—women hockey players’ fight for a living wage and a sign-stealing scandal in Major League Baseball—highlight best and worst practices for those negotiating in cutthroat environments.
Fighting for a league of their own
Founded in … Read More 

In BATNA Analysis, Knowledge Is Power

Katie Shonk   •  02/17/2020   •  Filed in BATNA

batnas

In negotiation, awareness of your BATNA, or your best alternative to negotiated agreement, is often your greatest source of power. What is a BATNA in negotiation? It can be thought of as the best back-up plan you can reasonably expect to achieve. Think of a solid job offer that you plan to accept if your … Read More 

Best Alternative to a Negotiated Agreement: Beyond the Basics

Katie Shonk   •  12/30/2019   •  Filed in BATNA

best alternative to a negotiated agreement

What is your greatest source of power in negotiation? In their landmark negotiation book Getting to Yes: Negotiating Agreement Without Giving In (Penguin, 1991), Roger Fisher, William Ury, and Bruce Patton write that it is often a strong BATNA, or best alternative to a negotiated agreement. Before and during their negotiations, wise negotiators determine their … Read More 

Deal-Making Techniques for When You Feel Powerless

Katie Shonk   •  06/10/2019   •  Filed in BATNA

deal making techniques

In negotiation, we’re often advised that our most important source of power is our best alternative to a negotiated agreement, or BATNA. If we feel powerless when making business deals, it’s often because we don’t have a strong alternative if the current deal falls apart or fails to meet our needs. Thus, the key to … Read More 

Negotiation Strategies for Dealing with Spoilers

Katie Shonk   •  04/01/2019   •  Filed in BATNA

batna

Amazon’s announcement on February 14 that it was backing out of a recent deal to build a major new campus in New York City was as bitter as a Valentine’s Day breakup could be. But the budding relationship between Amazon and New York didn’t have to end in acrimony and broken dreams, Harvard Business School … Read More 

A Bad BATNA for Modern Farmer Magazine

Katie Shonk   •  07/09/2018   •  Filed in BATNA

batna

In business negotiations, our mistakes sometimes end up affecting not only the current deal, but our best alternative to a negotiated agreement, or BATNA, in deals that lie down the road. That’s a lesson that Ann Marie Gardner, the founder and editor of the hip new magazine Modern Farmer, has learned the hard way. … Read More 

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