Strong internal pressure to make an agreement, as they will be unaware of what would happen should the negotiation fail; They will be over optimistic about proposed agreements which can then result in the associated costs not being fully appreciated; They will face the peril of becoming committed to reach an agreement, as they will be unaware of alternatives outside the negotiation. Fisher, Ury & Patton conceived the term BATNA. Not to mention the economic ties and heavy investments of the Brits. The article explains this well in the conclusion. Since its usually the last resort, the other party involved has to accept the BATNA presented or lose the negotiation. Qing government had no alternatives (so they thought), and unwilling to create new BATNA, led to the concession of Hong Kong. Why Use BATNA (Best Alternative to a Negotiated Agreement)? If you look at your situation in the absence of a negotiated agreement, and find it almost unthinkable, you will be pressed to enter negotiations in the hope of getting a satisfactory agreement. Also, for focusing on purposeful negotiations, your WATNA is crucial. It’s a bit of both – identifying a negotiator’s BATNA is a necessary skill for developing the best strategies to use at the bargaining table.       The word “satisfactory” is important here. It allows the parties to create perspective on the options that they are thinking about. It has no external reference point. Regards - Josh". Negotiation: A process by which two or more people come to agreement on how to allocate scarce resources. In particular, one party's assessment of their best case outcome may look quite different from the other party's assessment of their worst case outcome. If a negotiator has a strong BATNA, it may be beneficial to disclose it, as this would prevent the other party/ parties from acting as if a viable alternative didn't exist. With regards to William Li's response, the first Anglo-Chinese 'Opium' war was fought in the late 1830s/early 1840s. Reading comprehension - ensure that you draw the most important information from the lesson on BATNA and WATNA, such as which concept is employed in a given scenario Should a negotiator learn that the other party is over-estimating its BATNA before the start of a negotiation, then they will be able to effectively use this information to lower the negotiation expectations of the other party. In other words, what, realistically, is the best outcome if you went to court, and what would be the worst outcome. However, once negotiation starts, the BATNA is a dynamic element, changing as you derive information about the interests of other parties and their constituencies and as you compare the resources each party (including you) has available to bring about and fulfill an agreement. Question: Can you please explain BATNA to me and tell me how it is useful in negotiating?. Judgments and Decisions Psych 253 Negotiations 2. However, if a negotiator has a weak BATNA, it would be better not to disclose the BATNA, especially if the other party indicates they are over-estimating their own BATNA as this would prove to be a bonus that should not be squandered through disclosure. "Zone of Possible Agreement (ZOPA)" is the range in which an agreement is satisfactory to both parties involved in the negotiation process. This kind of skill and strategy has already been recorded in the Chinese history books 2000 years ago. 29 of 42 people found the following comment useful: "When Qing Dynasty negotiated during post Opium War, they did not have any BATNA and the Brits knew. When creating a BATNA, a negotiator should: Although it would be absurd to start a negotiation with a predetermined decision not to find an agreement, a viable BATNA acts as an essential insurance policy. WATNA Practical Law UK Glossary 7-205-6261 (Approx. It also began an analysis by providing a list of possible alternatives that the parties may consider as they begin to evaluate their position. The solution is to know your BATNA and WATNA. Your walking-in BATNA may be the first cards you are dealt. A war would be a painful one. It explains what a BATNA is and then contrasts it to a bottom line. They will be exposed to: We welcome the republication of this page's contents in part or full - we just ask that you include a clean link back to this site, to our www.negotiationtraining.com.au/training/ page. ", © Copyright 2017 Negotiation Training | E-mail us It is not supported by the evidence presented.". To deal with the situation of pendency of cases in courts of India, ADR plays a significant role in India by its diverse techniques. 1) Increases negotiating power Having a BATNA increases your negotiating power and brings to a consensus which is more in favor of the party holding BATNA. WATNA stands for the Worst Alternative to a Negotiated Agreement. Get The Other Side Talking. In this scenario, both parties would be better off to seek elsewhere to pursue their business. Analysis and discussion of how to determine what each party’s BATNA and WATNA is and then the best ways to utilize this knowledge will be the focus of this set of articles. However, the Chinese learnt their lessons on the importance of maintaining good relationship after negotiation, thus gave the Britts plenty of economic manoeuvring room to continue their prosperity. 7 of 11 people found the following comment useful: "HYour article has been extremely helpful in clearing up exactly what the uses of assessing your BATNA can achieve, alongside the pitfalls if you don't realise your BATNA. A negotiator who knows more about the alternatives available to the other party/ parties will be more able to prepare for a negotiation. Worst alternative to negotiated agreement. A concept developed in the context of negotiation theory. As most business negotiators are already aware, BATNA is an acronym for (Best Alternative To a Negotiated Agreement). It is a negotiation tool which outlines the course of action to be taken when negotiations fail … Getting to a BATNA usually involves several steps: If mediation appears to be fruitless, it is helpful to provide a fresh perspective on the problem. If negotiated agreements are absent, you will be forced to enter negotiations hoping to get just a satisfactory agreement. BATNA is Only Part of the More Important Focus, Negotiators’ Bottom Lines Because BATNAs are so dang shiny, people often think that they should be the main focus of negotiators’ analysis. As a gauge against which an agreement is measured, it prohibits a negotiator from accepting an unfavourable agreement or one that is not in their best interests because it provides a better option outside the negotiation. Is the WATNA better than satisfactory? In any negotiation, it is important to make sure that you establish your best alternative, but also your worst so you can weigh your options with greater accuracy, and, hopefully, better results. BATNAs are critical to negotiation because you cannot make a wise decision about whether to accept a negotiated agreement unless you know what your alternatives are. In contrast to a bottom line, a BATNA is not interested in the objectives of a negotiation, but rather to determine the course of action if an agreement is not reached within a certain time frame. This will foster pessimism about their prospects if the negotiation fails; and. So your BATNA changes as new cards come into your hand. Average Reader Rating: If you are offered a used car for $7,500, but there's an even better one at another dealer for $6,500- … It is defined as the most advantageous alternative that a negotiating party can … WATNA is the opposite — the worst alternative to a negotiated agreement. Alternative Dispute Resolution mechanism provides scientifically developed techniques to Indian judiciary which helps in reducing the burden on the courts. Both parties, as well as the mediator, have to maintain a positive attitude; optimism can solve problems if both parties continue with the process. Using negotiation lingo, alternatives are what you could do to meet your interests if you walked away from the current negotiation. 33 of 37 people found the following comment useful: "Having read and put into practice the Harvard Negotiation Project's 'Getting To Yes: Negotiating Agreement Without Giving In', I believe the article here is well written. Identify the best of the alternatives and keep it in reserve as a fall-back during the negotiation. BATNA stands for ‘Best Alternative to Negotiated Agreement’ and WATNA stands for ‘Worst Alternative to Negotiated Agreement’, first conceived by Roger Fisher and William Ury in 1981. Although bottom lines definitely serve a purpose, they also regrettably foster inflexibility, stifle creativity and innovation, and lessen the incentive to seek tailor-made solutions that resolve differences. isn't that just common sense? The conclusion may be correct. If you have invested time in finding out what your BATNA is, you deepen your power and are more able to negotiate confidently. If you have any time, I've just written a blog on BATNA and negotiation http://rolesrelations.wordpress.com/2013/03/18/buying-with-batna-gone-in-60-seconds/ It explains the process, related to selling a car. A significant reality check on any party's BATNA/WATNA analysis is the other party's assessment of the same case from the other side. Here’s a classic illustration of the BATNA negotiation skills concept: Negotiation skill or negotiation strategy? When a negotiator has a strong BATNA, they also have more power because they possess an attractive alternative that they could resort to if an acceptable agreement is not achieved. Let’s suppose you’re buying widgets from your supplier for $1,000 a widget. Thanks for clarifying!". You should always consider the worst case scenario before negotiating. I highly recommend it. We know what we will do if the deal falls through, which makes us less likely to dip below our bottom line, make desperate or unwise concessions, or fail to ask the other side for what we really want. Britts had no BATNA and was unable to create one, not after the Falkland Island War. It is a means to defend oneself against the pressure and temptation that is often exerted on a negotiator to conclude an agreement that is self defeating. Batna 1. By looking at BATNA as an ongoing, changing measure of negotiating strength, as a mechanism for deciding whether and/or when to quit, we develop a disciplined, informed approach to our negotiations. Training Guarantee | Your Privacy | Site Map | Terms, Excellent content. Brits knew how costly and risky to engage an immediate war with China that has nuclear capabilities. The BATNA is even more important than the WATNA. The previous article discussed the importance of moving through a BATNA/WATNA analysis to discover the true interests at the center of a dispute. 2 pages) Ask a question Glossary WATNA. This makes it a 170 year history - not 2,000 years. However, the Chinese learnt their lessons on the importance of maintaining good relationship after negotiation, thus gave the Britts plenty of economic manoeuvring room to continue their prosperity. WATNA is very helpful when it comes to understanding the bound of the deal. Question: Can you please explain BATNA to me and tell me how it is useful in negotiating? If other parties need you in order to reach their objectives, your BATNA is strong; your negotiating circumstances are strong. A WATNA is the worst possible outcome a party has in mind. When negotiations begin, establish rapport and try to get the other side … A bottom line is set arbitrarily. The only shortcoming of this article as I see it is that it does not shed light on the procedural differences between arriving at a bottom line and arriving at a BATNA. This article explains how a negotiator can use their BATNA to achieve a better bottom line instead of settling on a bad agreement. Without BATNA, this time, the Britts have to follow the old path of negotiation--concession. Q & A Table of Contents. If you want to buy a new car and the same model is for sale at several car dealers, you have a strong BATNA because you can benefit from their competition for your business. The BATNA and WATNA are important in terms of the endgame because it helps people evaluate how good or bad their options are. BATNA is an acronym that stands for B est A lternative T o a N egotiated A greement. They will become beholding to the whims of the law of agreement, which holds that when persons agree to something this is entirely dependent on the attractiveness of the available alternatives. As suggested earlier, BATNA/WATNA analysis can also be less influential where parties simply refuse to give it meaning because they can afford to do so and have other interests that are more important to them. When considering the BATNA, MLATNA, and WATNAs, each party should consider what alternative paths exist if … Comments: 5. 11 of 13 people found the following comment useful: "When I read "Getting to Yes with yourself", one of the latest additions to the Getting to Yes series, it introduced he BATNA concept but it wasn't until I read this article, that I truly understood the difference between the BATNA and the bottom line. Knowing this range of outcomes can be critical. Response: BATNA is the acronym for Best Alternative To a Negotiated Agreement. In negotiation, rather than looking at cards, we are assessing information about our own resources, those of other negotiating parties, and the influences on each negotiator from their constituencies. Never.” (Rivlin 2000) In the course of transforming pharmaceutical startup, Millennium Pharmaceuticals, into a multibillion dollar enterprise, then Chief Business Officer In the preparation phase of your negotiation, you need to consider what is the worst that will happen if you do not sell in a particular negotiation. Considering a WATNA means that each party thinks about what their losing scenario looks like. Going to the worst case scenario in your negotiation preparation has a particular benefit: you might reconsider your bottom line. Why BATNA and WATNA are so important. 2) Added Confidence Returning to my situation, I looked at the worst case scenario and went pretty far down that rabbit hole. It is crucial to think of BATNA as having two stages in a negotiation. While preparing for a negotiation, it is important to estimate the Reservation Value of your counterpart. observation is the importance of developing your BATNA before negotiating. It is a continuation of BATNA, except you are looking at the worst-case scenario and evaluating potential negative outcomes. It's all very well determining and assessing your best alternative, but are there any skills that you should acquire in order to achieve a positive agreement? However, it should be made clear at the outset that BATNA is not the so called bottom line that negotiators perceive as the means to guard themselves against reaching agreements where they give too much or receive too little. For example, reading somebodys body language or speaking in a certain manner - would this all aid the success of achieving your goal? The alternative that best meets your interests is called your BATNA (Best Alternative To a Negotiated Agreement).Understanding these concepts and how to utilize their power in negotiations will help you reach more satisfying outcomes in your negotiations. WATNA give time for one to prepare and determine several crucial aspects for negotiation, and reconsider the bottom line. I can see how BATNA is very useful in negotiation and bargaining - especially in sales - but sales is mostly about relationship building and correct communication. Their book is the most solid framework for how to approach negotiations I have read. A BATNA is the best alternative to a negotiated agreement, and the WATNA is the worst alternative to a negotiated agreement. It is thus important to also consider the other side of the coin, embodied by the concept of WATNA, or the Worst Alternative to a Negotiated Agreement [13,16, 17]. BATNA, however, covers far more than that. The bottom line is meant to act as the final barrier where a negotiation will not proceed further. Brainstorm a list of all available alternatives that might be considered should the negotiation fail to render a favourable agreement; Chose the most promising alternatives and expand them into practical and attainable alternatives; and. When a negotiator fails to explore its BATNA, they will find themselves in a very shaky situation. By Edrie Greer, Ph.D., Global Knowledge Instructor Negotiation is one of the oldest problem-solving methods in the world. From: Jackol, Hong Kong. With a BATNA and WATNA in place, we can enter a negotiation with greater confidence and approach the table with a greater sense of power. The exact opposite of this option is the WATNA (worst alternative to a negotiated agreement). Since BATNA is the alternative to what a negotiated agreement would be otherwise, it permits far greater flexibility and allows much more room for innovation than a pre-determined bottom line. Telling a supplier, for example, that you dumped your last partner and are desperate to do a new deal is a surefire way to ensure the supplier will highball you on price and resist compromising. A bad BATNA is also known as a WATNA, or worst alternative to a negotiated agreement. 9 of 12 people found the following comment useful: "Tom-if read carefully, William was not implying the Opium war was 2000 years ago, he was implicating the Chinese have had negotiation "skill and strategy" which he claims has been recorded in history books dated 2000 years ago. At least that was my interpretation. In negotiation theory, the best alternative to a negotiated agreement or BATNA (no deal option) refers to the most advantageous alternative course of action a party can take if negotiations fail and an agreement cannot be reached. One view says that BATNA is the measure of the balance of power in a negotiation. A BATNA, on the other hand, is a course of action which is available should a negotiator be unable to reach an agreement in the negotiation. New and immediate tools. The 'willingness' of a negotiator to break off a negotiation allows the negotiator to adopt a more firm and forceful stance when proposing ideas and interests as the basis for an agreement. A bottom line or walk away signifies the worst possible outcome that a negotiator might accept. You can walk away from a negotiation if your BATNA is better than the likely outcome of that negotiation. You start off with your 'walking-in' BATNA; the things you can influence or control before the negotiation begins. The worst that can happen if you lose the negotiation. In here, you will understand your priorities , the range of the agreement and what could go wrong. If those new cards are only known to you, you develop a greater understanding of your own apparent strength. The negotiator would then know the consequences should the negotiation fail. You buy upwards of 500 widgets a year or the equivalent of $500,000 of product a year. BATNA stands for best alternative to a negotiated agreement WATNA is the worst alternative to a negotiated agreement So in general, if you walk into the bargaining room with a … In litigation, the BATNA value (the expected value of the court outcome) is only one element of one’s bottom line (aka “reservation price”). In situations where both parties possess a similar or superior BATNA, then given similar negotiation skills, negotiation would seem rather fruitless because there would be very little incentive to reach an agreement. Establishing the BATNA, MLATNA and WATNA can help negotiating parties to evaluate their options. Related Content. A well conceived and clearly defined BATNA gives a skilled negotiator the advantage to break off the negotiation if it becomes clear that a beneficial outcome is not possible. 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