Abbreviated as BATNA, it is elaborated as Best Alternative To a Negotiated Agreement. It was first explained in their book “Getting to Yes: Negotiating Without Giving In” by authors Roger Fisher and William Ury. In other words, it is the best available alternative that you are bound to follow since the negotiated agreement is not in anyone’s favor or since you do not agree with the agreement.
It is not necessarily something that someone looks forward to in a negotiation but it can be used as a last resource. Ideally, BATNA should be avoided as much as possible and nobody aims to end the negotiations with BATNA and for that, it is the responsibility of both parties to ensure that their sides are conveyed properly in the process.
Your BATNA is your best alternative if the other party does not accept your terms and conditions, which means you do not require the other party agreement for your BATNA. It is simply the ultimate option and way which you will be suitable with. BATNA cannot be a negotiated agreement since it is an Alternative To negotiated agreement.
Once BATNA has opted, there cannot be any negotiation. Of course, negotiation is always advisable because, after BATNA, there cannot be any mutual agreements between the parties and both should – preferably – clarify at the beginning of negotiation – implicitly – that what their BATNA would be so that both negotiating parties can determine their minimum acceptance threshold.
If you realize that your BATNA has a leverage over them, you can negotiate toughly during entire session realizing that the opposite party will do everything possible in their hands to avoid BATNA.
Consider you have a fairly good BATNA in your hand, there can be three rejections which you can give in order to have a leverage:
- First rejection would be a strategic rejection in the hopes of generating an, even more, better option.
- Second rejection would be to re-start and can occur at any stage of negotiation. You realize that options presented to you are not good so you reject them and reinitiate putting forth your better deal
- This would a final rejection after which negotiation stop and BATNA may be used since any of the alternatives provided, does not suit you
Importance of BATNA
1) Increases negotiating power
Having a BATNA increases your negotiating power and brings to a consensus which is more in favor of the party holding BATNA. Since its usually the last resort, the other party involved has to accept the BATNA presented or lose the negotiation.
2) Added Confidence
Knowing that you have prepared BATNA, you can be persistent and assertive about your facts since BATNA is an added leverage. This does not mean that you can bully the other party. It is not advisable to consider everything suitable for you since you are here for a negotiation and not heckling.
3) Being Prepared
If you don’t have a BATNA, the other party can present any options which may not be suitable to you but beneficial to them and in that case, however incorrect those options may be, you have to accept. This would be the worst case scenario and another party may bully you into accepting the solution.
4) Last resort preparation
Having a BATNA can be a leverage, an escape plan, and the last resort.
5) Chance to win
There are two categories of negotiators. Hard and Soft negotiators. While the earlier ones almost bully into getting their way, whatever the case may be, the latter ones are easy victims and usually lose the negotiation. If the hard ones meet soft ones in a negotiation, it would be unfair on soft one’s part since it would be obvious that hard negotiators will win. Having a BATNA, in case you turn out to be a soft one, presents a chance to win.
BATNA process – How to determine your BATNA?
Although the BATNA may differ from situation to situation, here are few steps to determine BATNA:
1) Enlist actions that you would undertake, if the negotiation does not go in your favor or if it fails. The positive as well as negative actions that you would undertake in order to convey your dismay to the opposite party. It can be getting court involvement, strikes, making a new or breaking the existing association or any such action points which would prove your leverage, add weight and assert your dominance. This step is only about enlisting, however improbable or impossible the steps may seem, the sifting part comes later
2) Focus upon and improve the most possible ideas and convert them into executable options. Remove the rest of the ideas and focus on the shortlisted ones. Develop them practically and check their implications. For example, if you choose court involvement, you have to check the availability of the lawyer, expenses for the court, the presence of documents etc. List out all the necessary steps to be executed in order to carry that shortlisted idea.
3) Finally, choose one which is best. For example, if you enlist court and strikes but find out that there is a festival around the corner and both options would be redundant, you have to think about next one like making a new alliance. Strikeout such practically impossible and select one. It is very important that selection should be of only one and not multiple.
Example of BATNA
Consider there are two persons A and B. A wants to sell his old iPhone X to person B who wants to buy iPhone X. Person A offers his iPhone X for $600 to person B. Person B then browses through eBay and finds exactly same iPhone for $500. So BATNA of person B is $500. Now person B will show that to person A and try to get his phone for $450. In that case, A can choose either of the two: a. He can deal with another person C who is willing to buy his iPhone for $550 or b. He can use that as his BATNA to bring up the price offered by person B and settle for $525.
8 Types of BATNA you can use :
Here is the possible list of BATNA’s you can use :
- Walking out on the deal: The fairly common one in which after negotiations, things don’t work they were supposed to and you decide to walk out on the deal.
- Alternative option: Supposing the deal is about contracts, you can always abandon the negotiations and choose an alternative – it may be vendor, supplier or any other entity.
- Buying a different product or availing another service: This, in turn, means abandoning the negotiation process.
- Delaying the conclusion: This is a less used method wherein either of the party delays the negotiation process or the deal for so long that other party gets the message and either abandon them or agree to the theme.
- Remodelling: Remodeling the entire agreement can be considered as effective, formal way of implementing BATNA
- Modification: If redoing the entire agreement is not possible due to any reason, then certain things can be modified in the agreement to suit your purpose
- Personalities: Sometimes it so happens that everything turns out good except the negotiator. In these rare cases, the company can keep everything same and only replace the negotiator or any other person who they feel is affecting the deal.
- Cascading: If things are not working in any possible way, you can try to reach superiors of the person negotiating or cascade issue with seniors of opposite party.