What is BATNA?

The concept of “BATNA” was developed within the Harvard Negotiation Project by Roger Fisher and William Ury. BATNA (short for Best Alternative To a Negotiated Agreement) is the best solution reached outside the negotiation process. BATNA is crucial to the negotiation process. Why? Because you can’t make a wise decision or the best deal if you don’t know your alternatives.

In a situation where no agreement is reached with the other party, one’s interest can be realized through the most favorable alternative. BATNA is also useful during ongoing negotiation talks. It should be the benchmark or evaluation criterion for us. The offers or proposals received during negotiations should be compared precisely with BATNA. Why? It may turn out that negotiations have to be stopped, because the result will be less favorable than taking advantage of the best solution, which we can get “right away”, without having to participate in a time-consuming negotiation process.

Preparation for BATNA

The authors of the concept describe three stages of preparation for BATNA:

1. Using creative thinking (for example, using brainstorming) and proposing all possible actions that can be taken if an agreement with the other party is not reached.
2. The result of step one is to make a list of several ideas that we think are the best and meet our needs. We then convert the best ideas into practical options for action.
3. Refining the provisional selection of one of the best ideas that seems to be the best solution – that is best alternative to a negotiated agreement.

 Why should you prepare a best alternative to a negotiated agreement?

If the negotiator does not have a BATNA prepared then there is a risk during negotiations:

• The negotiator will be too optimistic about his own alternatives.
• He will be too hesitant to refer to the various options for a negotiated agreement.
• He will become too committed to reaching an agreement.

Examples of BATNA

Negotiations:

• For a salary increase – finding a job at another company (I will earn more, but the transportation to the new job will be worse).
• With a landlord for rent – finding another apartment (I will rent an apartment at a lower price, but it will be of a lower standard).
• With a retailer (price negotiations) – to shop at another store (I will buy the same thing cheaper, but I have to go to a store in another city).

In summary, an effective negotiator should know the BATNA tool and how to use it during negotiations. Being aware of having the right BATNA, can be our great negotiating advantage. As the authors of the concept say, “The better the BATNA, the more powerful the negotiator.”