BATNA (Best Alternative to a Negotiated Agreement)

We all have some level of knowledge about negotiation. We know about the different types of negotiation, we know we need to always look for a win-win solution, but how do you do it especially in this time when you can’t meet with a person and have a face to face conversation? What happens if you can’t reach an agreement?

What is BATNA ?

BATNA stands for, “Best Alternative to a Negotiated Agreement.”

It’s part of the preparation process before any negotiation. But what does this actually mean? Why do we need to develop this concept before any negotiation takes place? Besides saving headaches on both sides, it gives us a better understanding on how much we are willing to “lose” but still get a win-win solution.

How do we Define the BATNA ?

One approach people might think to define BATNAs is the one that we call the “bottom line”. If you are selling, it is the lowest price that you are willing to sell a certain item. If you are buying, it is the highest price that you are willing to buy a certain item. The bottom line will protect you from making bad decisions and ending up with a bad deal. But! This approach is not the best given that you can’t change those bottom lines, and of course it limits creativity and imagination. Avoid this approach as much as you can.

Remember that BATNA means your alternative in case you can’t reach an agreement and with that defined, you have to be able to leave without the agreement and the BATNA has to be enough and surpass what you got
if you reach the agreement.

Develop your BATNA

To develop your BATNA you have to follow two steps:
1. Determine your and also your counterpart’s options (here you will have to make assumptions).
2. Improve your best ideas by transforming them into alternatives.

These two steps will help you to define your BATNA. Please remember to take into account for your alternatives the cost, feasibility, pros, and cons.
For example: Let’s say we have a big factory that is not within the limits of a small town, and it is the main employer for that town. The town is suffering
economically, and if the big factory leaves there won’t be a town. In this case, the factory didn’t develop the BATNA but the town did. The town changed the town limits to include the factory and charge them the full commercial rate. This BATNA keeps the conversation open with the factory.

This article is based on a course in the Globant e-learning platform: Negotiation Training.

More on BATNA: https://www.coursera.org/learn/leadership-collaboration?specialization=organizational-leadership#syllabus