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.

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 

With Patient Approach, FBI Steered Oregon Occupiers Toward Their BATNA

Katie Shonk   •  03/10/2016   •  Filed in BATNA

The 41-day armed takeover of the Malheur National Wildlife Refuge in Oregon ended on February 11 when the last occupiers surrendered. Federal authorities in six states also arrested seven others accused of being involved in the occupation, according to the Associated Press. The standoff had begun when Ammon Bundy and his followers took over the … Read More 

The High Cost of Bad Advice at the Negotiation Table

PON Staff   •  02/18/2016   •  Filed in BATNA

If you’re thinking about buying a house, one of your first moves may be to choose a real estate agent who can advise you through the process. If you want a big-name publisher to buy your book, you probably will try to sign on an experienced literary agent as your counselor and advocate. Less formally, … Read More 

In Negotiations with Ben Affleck, No Appealing BATNA

Katie Shonk   •  02/02/2016   •  Filed in BATNA

In negotiation, your best source of power is typically your best alternative to a negotiated agreement, or BATNA. Having a strong outside alternative enables you to walk away from a deal that doesn’t meet your needs or that would compromise your vision or ethics.

But when you are dealing with a negotiating partner who seems irreplaceable, … Read More 

Negotiation Frontiers: Exploring New Opportunities to Negotiate

PON Staff   •  02/12/2015   •  Filed in BATNA

Many U.S. law schools are in crisis, to hear some tell it. During the recent recession, many law firms instituted mass layoffs and pay cuts, and few have fully recovered. As a result, college graduates are thinking twice about becoming lawyers, and many law schools have fewer high-quality applicants to choose from. In the past … Read More 

Too eager to close?

PON Staff   •  01/14/2015   •  Filed in BATNA

This past November, word got out that toy maker Hasbro was in advanced talks to purchase DreamWorks Animation. Purchasing an animated-film studio would move Hasbro CEO Brian Goldner closer to his goal of transforming the successful toy company into a global entertainment powerhouse, as the Lego Group has done in recent years, write Andrew Ross … Read More 

Searching for a Debt Ceiling: Boehner’s Uncertain BATNA

Katie Shonk   •  09/24/2013   •  Filed in BATNA

As the U.S. government approaches a potentially catastrophic default on its debt in October, President Obama remains determined to avoid negotiations with Republican leaders on the issue, the New York Times reports, a situation that leaves House of Representatives Speaker John Boehner with an uncertain BATNA, or best alternative to a negotiated agreement. … Read More