Batna: Negotiation

BATNA “Don’t put all your eggs in one basket. ” To a negotiator, this wise old proverb illustrates that if you bring only a single proposal to the table, you may likely end up with a rotten deal, or no deal at all Your Assignment Will Be Arranged Without Trouble! – check out here  . You need to have an alternative plan waiting in the wings. BATNA is an acronym described by Roger Fisher and William Ury which means Best Alternative to a Negotiated Agreement.

It is the alternative action that will be taken when your proposed agreement with another party results in an unsatisfactory agreement or when an agreement fails to materialize. If the result of your current negotiation only offers a value that is less than your BATNA, there is no point in proceeding with the negotiation, and one should use their best available alternative option instead. Prior to the start of negotiations, each party should have ascertained their own individual BATNA When developing a BATNA, a negotiator should: Brainstorm a list of alternatives that could be considered if the negotiation failed to deliver a favourable agreement: * Select the most promising alternatives and develop them into practical and attainable alternatives: and * Identify the most beneficial alternative to be kept in reserve as a fall-back during the negotiation. A BATNA does not concern what should be achieved, but what the course of action should be if an agreement is not reached within a certain time.

The question as to whether a BATNA should be disclosed to the other party depends on the strength (attractiveness) of the BATNA. If a negotiator has a strong BATNA, it may be beneficial to reveal it, as this would prevent the other party from acting as if a good alternative does not exist. Where a party has a weak BATNA, non-disclosure may be the preferred approach, as this may prove to be a bonus that should not be squandered through disclosure. The more a negotiator knows about the alternatives available to the other party, the better that negotiator is able to prepare for a negotiation.

If a negotiator before a negotiation has access to information that the other party is over-estimating its BATNA, such information could very effectively be used to lower its negotiation expectations. Where both parties to a negotiation have a strong BATNA, negotiation would seem rather meaningless, as there would be very little incentive to come to an agreement. In such cases the parties should rather look elsewhere to pursue their business. It is crucial to think of BATNA as having two stages in a negotiation.

You start off with your ‘walking-in’ BATNA; the things you can influence or control before the negotiation begins. However, once negotiation starts, the BATNA is a dynamic element, changing as you derive information about the interests of other parties and their constituencies and as you compare the resources each party (including you) has available to bring about and fulfil an agreement. BATNA doesn’t come in a package. It comes from planning and preparation. It is a twofold process. First, you have to determine all your available options.

Then, you must also realistically estimate your counterpart’s alternatives. Each is equally important. Otherwise, it will be impossible to gauge the strength of your best alternative in relation to their best alternative. Your plan should be a flexible approach. It is important to keep in mind that both your approach, and your alternatives, should be able to bend in the wind and weather the unexpected storm. A negotiator may enter the talks with a preconceived idea of the best alternatives available to both parties, but must not be bound by them. Circumstances can alter rapidly.

Unexpected changes can be anything from new information on the table; a sudden rise in costs due to political upheaval; new legislation: or, even a climatic intervention such as an unexpected and untimely frost. A sudden shift in conditions can immediately affect the strength of either party BATNA during the negotiation process. What’s in Your BATNA? How do you determine your best alternatives to a negotiated agreement? First, you have to dissect both your position and your interests. Then, look at the sum of these parts relative to all the alternative options available.

Pick the best option. Finally, do the reverse from your counterparts perspective. A well prepared negotiator looks at the whole picture. Some of the most crucial factors which should be considered include; * The cost – Ask yourself how much it will cost to make the deal relative to the cost of your best alternative. Cost estimation may entail both the short term and the long term. It boils down to figuring out which of your options is the most affordable. * Feasibility – Which option is the most feasible? Which one can you realistically apply over all the rest of your available options? Impact – Which of your options will have the most immediate positive influence on your current state of affairs? * Consequences – What do you think or estimate will happen as you consider each option as a possible solution? Examples: Let’s illustrate BATNA by using a simple example. In the first scenario, let’s say that you are a buyer who goes to a supplier to purchase some badly needed parts to complete a project. The supplier senses your urgency. You want the lowest price possible while he wants the higher price. You have no fallback position.

You’re both in the boat, but it’s the supplier who’s holding the oars, so guess who decides where the boat makes land? On the other hand, say you go to the meeting prepared. Before arranging the meet, you set up talks with 2 other suppliers who are ready and able to handle all your needs. When you meet with the first supplier in this second scenario, you can calmly sit back in your chair, and allow the supplier to finish his offering. Now look at the reaction when you tell him about his competitors willingness to solve your problem. You have BATNA! The talks suddenly become more amenable. So, who’s holding the oars now?