How BATNA Influences Power During Negotiations

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  • 0:04 What Is BATNA?
  • 1:11 The Other Side's BATNA
  • 1:42 Using Your BATNA
  • 2:45 Lesson Summary
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Lesson Transcript
Instructor: David Whitsett

David has taught computer applications, computer fundamentals, computer networking, and marketing at the college level. He has a MBA in marketing.

Your BATNA (best alternative to a negotiated agreement) can be the ace up your sleeve when you walk into the bargaining room. In this lesson, we'll examine the best way to use your BATNA for maximum power in a negotiation.

What Is BATNA?

Imagine how you'd feel if you walked into a bargaining session knowing you had a great Plan B just in case. Your BATNA, which stands for best alternative to a negotiated agreement, is your Plan B, and having a good one is a powerful thing. Remember, though, you'd still rather come to an agreement. The BATNA is just in case things don't work out. It's the best you can do without your counterpart in the negotiation.

How do you determine your BATNA and prepare? Here's a process you can use:

1. Make a List

Put some thought into your possible alternatives and make a list. For example, if you're buying a car, make a list of models available at other dealerships.

2. Prioritize

Run your numbers on the alternatives and put them in the order that you want to pursue.

3. Pick The BATNA

Choose the one that represents the best value. Congratulations, you have a BATNA!

4. Figure Your Walk-Away Number

Now that you have your BATNA, calculate the lowest possible offer you would be willing to accept from the other party. If you don't get that number in the negotiation, it's time to use your BATNA or reopen negotiations.

The Other Side's BATNA

During preparation for the negotiation, you should be trying to assess what the other side's BATNA might be as well. Thinking about their BATNA can give you a more realistic view of what the possible outcomes might be and help you frame a reasonable offer. When you think about the other side's BATNA, remember that you're dealing with an individual negotiator and an organization. The negotiator might have a BATNA that's different than the organization's BATNA in some respects. Think about the other negotiator's incentives. How are they compensated?

Using Your BATNA

The BATNA can influence the balance of power in a negotiation. If the other party really needs you in order to reach their objectives, it makes your BATNA stronger. If both sides believe they have a strong BATNA, it may result in a power struggle at the bargaining table. For example, if both legal teams trying to negotiate a settlement believe they could go to court and win, the bargaining might end in a stalemate.

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