Best Alternative To A Negotiated Agreement - Definitions

Definitions

BATNA

An acronym defined by negotiation researches Roger Fisher and William Ury which means Best Alternative to a Negotiated Agreement It is the alternative action that will be taken if your proposed agreement with another party result in an unsatisfactory agreement or when an agreement cannot be reached.

Historical Theories

Nobel Prize Winner John Forbes Nash and the father of Nash Equilibrium, Game Theory Concept, echoes in Getting to Yes as the underlined idea for the concept of BATNA in negotiation (Roger B. Myerson, April 1996). In a nutshell, Nash Equilibrium theory explains that, if in a group of players, each player has in consideration the other player’s decisions, then no one will benefit from altering their decisions, if the other players haven’t either.

Example of Nash Equilibrium Theory

Amy and Phil are in Nash equilibrium if Amy is making the best decision she can, taking into account Phil's decision, and Phil is making the best decision he can, taking into account Amy's decision. Likewise, a group of players are in Nash equilibrium if each one is making the best decision that he or she can, taking into account the decisions of the others.
We cannot think of BATNA without first understanding the notion of Negotiation. Negotiation has been part of the “business” mentality of human beings as we know it, since the beginning of mankind. Take for example The Israeli-Palestinian conflict, one of the longest ongoing negotiations of the kind, based primarily on the dispute of land (UN, 1948). We negotiate every single day of our lives; whether it is goods, commodities, ideas, positions, or money. The list could be endless.
For this reason knowing how to negotiate is very important. The idea is to have all parties mutually satisfied with the results achieved through the highest standards of (Ethics) and legitimate standards. In no other time of world history as the modern days, has the ability and the necessity of knowing how to negotiate, using sophisticated tools and civil discourse been so essential to society. As explained in Getting to Yes, “We are each participants in a pioneering generation of negotiators…it is central to human life and the survival of our species

Negotiations Concepts Leading to Good BATNA

A ruthless, aggressive and cold blooded negotiation style is the framework approach most people have when it comes to negotiation, a theoretical example of that is Adversarial Approach Style Negotiation . But in reality, as mentioned by experts and researchers such as Fisher and Ury it doesn’t have to be that way. As the world moves to more sophisticated platforms of communication, negotiation follows the trend and Problem-Solving Approach(citation) is in a way, the “antidote" of Adversarial Approach Style Negotiation. Getting to Yes suggest an Interest-Based Model for the use of Problem-Solving Approach. Interest-Based Model focus on separating the person (positional) from the problems (resolution) and then concentrate on the resolution. This way allowing for both parties in a distributive way to get the results they both want.

ABC's of BATNA

Having a BATNA (Best Alternative to a Negotiated Agreement) as part of the negotiation is imperative as the name explains. No one should come to the negotiation table without a BATNA .
This will allow for intelligent negotiation and bargain zones. In addition to having a BATNA, parties should have a Bottom Line or Reservation Price. What this prevents is that neither party will come out with agreements they don’t need
Often times parties go to the negotiation table with what they imagine is a great BATNA. For example, how many times have you walked into a job interview with no other solid job offers in hand, let alone perspective of solid salaries, benefits and other great things you are looking for in a job . The ability to be in a powerful position so the negotiation can be intelligent and satisfactory to both parties requires preparation and research. So do not cut yourself short for the lack of having a better BATNA at all times.
If having a good BATNA in essential, developing a BATNA is equally important. Let’s assume that you are going to work for a company that is not offering you the salary you desire. Instead, you know that they offer other perks such as, company cars, luxurious vacation homes, and state-of-the-art computers and laptops to their employees. In other words, Alternatives . Attractive Alternatives is what you want to explore in order to develop a very strong BATNA. In Getting to Yes, the authors give 3 suggestions of how you can accomplish this:

1. Inventing a list of actions you might take if no agreement is reached
2. Converting some of the more promising ideas and transforming them into tangible and partial alternatives
3. Selecting the alternative that sounds best

BATNA rules

Parties should never disclose their BATNA, unless, the alternative is better. In other words, if your best alternative to a negotiated agreement is better then what the other party is offering, then disclosing it, is to your advantage. If on the other hand it is worse, than do not disclose it.

BATNA in Cross Cultural Frameworks

Currently in the United States and due to recent world events, there are more and more individuals with a different cultural background and approach to negotiation. When individuals come to the negotiation and bargaining table ready to use their BATNA, and one of the parties is from a different culture, there is a tremendous game change in approach. Both parties need to think and account for cultural cognitive behaviors. Both parties must expand their thinking negotiation hats by not allowing external judgment and biases to affect the negotiation. As mentioned earlier, separate the individual from the objective
For example imagine you are negotiating with a party from an Arab Nation. Is this going to effect your view of how you are going to negotiate? Or even if you are the party from that nation, are you prepared to receive an offer lower than your BATNA because you know you are from a different culture. The previous is a very simple example, but the purpose here as Gulliver mentioned, is for negotiation parties to be aware.

Disclosure

This is a very new topic in negotiation and there aren’t many frameworks in place to help this scenario. Nonetheless, preparation at all levels, including prejudicial free thoughts, emotional free behavior, biases free behavior are just a few ways according to the Handbook of Negotiations and Culture that can helps in the right direction.