What is Best Alternative to a Negotiated Agreement ?

Definition

The Best Alternative to a Negotiated Agreement (BATNA) refers to the course of action that a party will take if negotiations fail and no agreement can be reached. It represents the best option or alternative available to a negotiator if the negotiation breaks down.

Origin

The concept of BATNA was first introduced by negotiation researchers Roger Fisher and William Ury in their 1981 bestseller, "Getting to Yes: Negotiating Agreement Without Giving In." The book emphasizes the importance of understanding and preparing a BATNA in negotiations to have a stronger bargaining position at the table.

Categories and Features

BATNA can be categorized into various types depending on the context and goals of the negotiation. For instance, in business negotiations, a BATNA might involve seeking other suppliers or partners. In personal negotiations, a BATNA could be pursuing other career opportunities. The main feature of a BATNA is that it provides a clear alternative, ensuring that the negotiator is not left in a vulnerable position during negotiations.

Case Studies

Case Study 1: In 2010, Apple and Samsung were engaged in negotiations over patent issues. Apple's BATNA was to continue legal proceedings, while Samsung's BATNA was to seek other technology partners. Ultimately, both parties reached a settlement agreement as their respective BATNAs were less favorable than reaching an agreement.

Case Study 2: In 2016, the UK and the EU were negotiating the Brexit agreement. The UK's BATNA was a no-deal Brexit, while the EU's BATNA was to continue trade negotiations with other countries. After multiple rounds of negotiations, both parties reached an agreement to avoid the risks associated with a no-deal Brexit.

Common Issues

Common issues investors face when applying the BATNA concept include underestimating their own BATNA or overestimating the opponent's BATNA, which can lead to a disadvantageous position in negotiations. To avoid these issues, it is recommended to conduct thorough preparation and research before negotiations to accurately assess each party's BATNA.