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.

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

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 

Negotiation Power Plays

PON Staff   •  06/30/2018   •  Filed in BATNA

Imagine yourself in the following negotiation scenarios:

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 trying to sell a used piano online … Read More 

For Sellers, Staying Mum on Price Can Offer Hidden Advantages

PON Staff   •  05/31/2018   •  Filed in BATNA

Imagine yourself in a dilemma that only a privileged few get to experience: You’ve fallen in love with a dazzling, one-of-a-kind home that’s on the market, but it doesn’t have a listing price. Instead, the seller’s broker is encouraging you to name what you’re willing to pay. An offer well into the millions seems expected, … Read More 

Negotiation Research in the News: Adapting the BATNA strategy across cultures

PON Staff   •  10/31/2017   •  Filed in BATNA

The BATNA (best alternative to a negotiated agreement) concept, popularized by Roger Fisher, William Ury, and Bruce Patton in their book Getting to Yes (Penguin Books, second edition, 1991), has been disseminated all over the world and doubtless helped thousands avoid settling for less than what they want in negotiations. When you have identified your BATNA, … Read More 

Exercising Your BATNA: When American Apparel Ousted Dov Charney

Katie Shonk   •  04/13/2017   •  Filed in BATNA

On June 18, 2015 the board of retailer American Apparel informed the company’s controversial founder, Dov Charney, that it was ousting him from his roles as chairman and CEO. For years, Charney had fended off sexual-harrassment lawsuits and rumors of inappropriate behavior. But only when the company’s creditors grew anxious about its long-term liability did … Read More 

Negotiation Research: When Powerful Negotiators Cut Corners

PON Staff   •  04/12/2017   •  Filed in BATNA

Negotiators often are advised to seek out lots of information about their counterpart, including information about the other party’s power. One of the most important measures of power is a negotiator’s BATNA, or best alternative to a negotiated agreement—the ability to walk away, secure in the knowledge that you can get what you want somewhere … Read More 

In Platform Negotiations with Clinton, Sanders Was Victorious

Katie Shonk   •  12/20/2016   •  Filed in BATNA

With the 2016 Democratic National Convention now over, Vermont senator Bernie Sanders used the Hillary Clinton campaign’s fear of a divisive spectacle in Philadelphia to extract concessions on the party’s official platform and committee assignments. The senator’s tough dealmaking suggests an important negotiation lesson: Always know your BATNA and ZOPA in any negotiation. … Read More