BATNA stands for "Best Alternative To Negotiated Agreement". Yeah, that's it. I learned about it in a course on management.
In simplistic terms, it is defined like this
In simplistic terms, it is defined like this
It is the exact point when the deal the other side is offering is no longer beneficial to you. For example, if you are negotiating about getting a job at firm A and you already have a job offer from firm B worth $40,000 per year, this salary is your current BATNA.
A management report by the Program on Negotiation of Harvard Law School says in assessing or determining your BATNA in any given organisation, follow these four steps:
- List your alternatives. Think about all the alternatives available to you if the current negotiation ends in an impasse. What are your no-deal options?
- Evaluate your alternatives. Examine each option and calculate the value of
pursuing each one. - Establish your BATNA. Choose a course of action that would have the highest expected value for you. This is your BATNA—the course you should pursue if
the current negotiation fails. - Calculate your reservation value. Now that you know your BATNA, calculate
your reservation value—the lowest-valued deal you are willing to accept. If the
value of the deal proposed to you is lower than your reservation value, you’ll be
better off rejecting the offer and pursuing your BATNA. If the final offer is higher
than your reservation value, you should accept it.
After reading up on BATNA and seeing a couple of YouTube videos, BATNA seems to be the silver bullet in Negotiation, if you understand and internalize it. Your Job negotiations, house haggling, etc would never remain the same again.
Could you share what your
But it's pretty much synonymous with "Safety Blanket", "Exit Plan" etc during negotiations.
The knowledge of BATNA just brings home the importance and the art of it.