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This article explains how a negotiator can use their BATNA to achieve a better bottom line instead of settling on a bad agreement. For example, an employer may be willing to risk significant losses, at high costs, to maintain a reputation that they do not settle 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. "Zone of Possible Agreement (ZOPA)" is the range in which an agreement is satisfactory to both parties involved in the negotiation process. 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. WATNA is very helpful when it comes to understanding the bound of the deal. Judgments and Decisions Psych 253 Negotiations 2. Get The Other Side Talking. Going to the worst case scenario in your negotiation preparation has a particular benefit: you might reconsider your bottom line. Batna 1. When negotiations begin, establish rapport and try to get the other side … BATNA is an acronym that stands for B est A lternative T o a N egotiated A greement. 2 pages) Ask a question Glossary WATNA. 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. Returning to my situation, I looked at the worst case scenario and went pretty far down that rabbit hole. In litigation, the BATNA value (the expected value of the court outcome) is only one element of one’s bottom line (aka “reservation price”). 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. While preparing for a negotiation, it is important to estimate the Reservation Value of your counterpart. Question: Can you please explain BATNA to me and tell me how it is useful in negotiating? 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. Is the WATNA better than satisfactory? New and immediate tools. A war would be a painful one. You've been extremely thorough in your explanations, however, I have also learnt of your WATNA - Worst alternative - and although I acknowledge this is a genuine term, I can't but help feel that it is a little obvious and pointless to determine your 'WATNA'. If you have invested time in finding out what your BATNA is, you deepen your power and are more able to negotiate confidently. 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. 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. 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. 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. At least that was my interpretation. A bottom line or walk away signifies the worst possible outcome that a negotiator might accept. 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. When considering the BATNA, MLATNA, and WATNAs, each party should consider what alternative paths exist if … A WATNA is the worst possible outcome a party has in mind. 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. The exact opposite of this option is the WATNA (worst alternative to a negotiated agreement). Without BATNA, this time, the Britts have to follow the old path of negotiation--concession. It is defined as the most advantageous alternative that a negotiating party can … 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. 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. 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. A bad BATNA is also known as a WATNA, or worst alternative to a negotiated agreement. 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. The negotiator would then know the consequences should the negotiation fail. By Edrie Greer, Ph.D., Global Knowledge Instructor Negotiation is one of the oldest problem-solving methods in the world. 158 years later, PRC turned the tide. 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. For example, reading somebodys body language or speaking in a certain manner - would this all aid the success of achieving your goal? The BATNA and WATNA are important in terms of the endgame because it helps people evaluate how good or bad their options are. When a negotiator fails to explore its BATNA, they will find themselves in a very shaky situation. 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. 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. 2) Added Confidence Fisher, Ury & Patton conceived the term BATNA. If you look at it from the simplest standpoint, your BATNA is the choice you can make if you conclude that negotiating with a particular party is not likely to yield a favorable result. 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. You can think of BATNA in negotiation like playing a game of cards. In here, you will understand your priorities , the range of the agreement and what could go wrong. 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. 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. Comments: 5. Not to mention the economic ties and heavy investments of the Brits. Since its usually the last resort, the other party involved has to accept the BATNA presented or lose the negotiation. In many card games, your hand may change during the play as new cards are dealt to you (and others). Britts had no BATNA and was unable to create one, not after the Falkland Island War. Negotiation: A process by which two or more people come to agreement on how to allocate scarce resources. 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. Why BATNA and WATNA are so important. 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. One view says that BATNA is the measure of the balance of power in a negotiation. The BATNA is even more important than the WATNA. Training Guarantee | Your Privacy | Site Map | Terms, Excellent content. 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. WATNA is the opposite — the worst alternative to a negotiated agreement. 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. 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. WATNA is another objective standard that can help you evaluate a potential settlement offer. In other words, what, realistically, is the best outcome if you went to court, and what would be the worst outcome. Importance of WATNA as a negotiation tactic. 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. Worst alternative to negotiated 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. 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. BATNA and WATNA are, in many ways, just two sides of the same coin. How To Determine Yours The conclusion may be correct. 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. 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. A concept developed in the context of negotiation theory. 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. 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. Average Reader Rating: 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. Q & A Table of Contents. 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. Thanks again for a great read! It is not supported by the evidence presented.". 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 Response: BATNA is the acronym for Best Alternative To a Negotiated Agreement. Both parties, as well as the mediator, have to maintain a positive attitude; optimism can solve problems if both parties continue with the process. Why Is BATNA Important. 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.       The bottom line is meant to act as the final barrier where a negotiation will not proceed further. WATNA give time for one to prepare and determine several crucial aspects for negotiation, and reconsider the bottom line. Without knowing them, you could end up accepting an offer you ought to reject. A BATNA is the best alternative to a negotiated agreement, and the WATNA is the worst alternative to a negotiated agreement. 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. 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. Good article and comments overall.". 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. Identify the best of the alternatives and keep it in reserve as a fall-back during the negotiation. If negotiated agreements are absent, you will be forced to enter negotiations hoping to get just a satisfactory agreement. A negotiator who knows more about the alternatives available to the other party/ parties will be more able to prepare for a negotiation. 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. So your BATNA changes as new cards come into your hand. isn't that just common sense? It is crucial to think of BATNA as having two stages in a negotiation. 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. 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. 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. 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. WATNA Practical Law UK Glossary 7-205-6261 (Approx. 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. Considering a WATNA means that each party thinks about what their losing scenario looks like. Thanks for clarifying!". The previous article discussed the importance of moving through a BATNA/WATNA analysis to discover the true interests at the center of a dispute. 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. Never.” (Rivlin 2000) In the course of transforming pharmaceutical startup, Millennium Pharmaceuticals, into a multibillion dollar enterprise, then Chief Business Officer As most business negotiators are already aware, BATNA is an acronym for (Best Alternative To a Negotiated Agreement). The article explains this well in the conclusion. 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. Importance of ADR in India. This kind of skill and strategy has already been recorded in the Chinese history books 2000 years ago. Their book is the most solid framework for how to approach negotiations I have read. 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. Qing government had no alternatives (so they thought), and unwilling to create new BATNA, led to the concession of Hong Kong. This can help you determine if a potential settlement offer should be accepted or refused. You start off with your 'walking-in' BATNA; the things you can influence or control before the negotiation begins. Here’s a classic illustration of the BATNA negotiation skills concept: Negotiation skill or negotiation strategy? 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]. It explains what a BATNA is and then contrasts it to a bottom line. Let’s suppose you’re buying widgets from your supplier for $1,000 a widget. This will foster pessimism about their prospects if the negotiation fails; and. You can walk away from a negotiation if your BATNA is better than the likely outcome of that negotiation. WATNA stands for the Worst Alternative to a Negotiated Agreement. It has no external reference point. A bottom line is set arbitrarily. Alternative Dispute Resolution mechanism provides scientifically developed techniques to Indian judiciary which helps in reducing the burden on the courts. If the new cards are dealt to all the players in a way that allows each player to see at least some of the cards in each player's hand, you learn more about the comparative strength of your BATNA. 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. 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. Using negotiation lingo, alternatives are what you could do to meet your interests if you walked away from the current negotiation. If you are offered a used car for $7,500, but there's an even better one at another dealer for $6,500- … The worst that can happen if you lose the negotiation. 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 … Why Use BATNA (Best Alternative to a Negotiated Agreement)? The solution is to know your BATNA and WATNA. The word “satisfactory” is important here. Brits knew how costly and risky to engage an immediate war with China that has nuclear capabilities. 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. In this scenario, both parties would be better off to seek elsewhere to pursue their business. Also, for focusing on purposeful negotiations, your WATNA is crucial. ", © Copyright 2017 Negotiation Training | E-mail us It also began an analysis by providing a list of possible alternatives that the parties may consider as they begin to evaluate their position. As a senior AOL official asserted “You would never do a deal without talking to anyone else. BATNA, however, covers far more than that. Related Content. Establishing the BATNA, MLATNA and WATNA can help negotiating parties to evaluate their options. If those new cards are only known to you, you develop a greater understanding of your own apparent strength. This makes it a 170 year history - not 2,000 years. Your walking-in BATNA may be the first cards you are dealt. Regards - Josh". 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. With regards to William Li's response, the first Anglo-Chinese 'Opium' war was fought in the late 1830s/early 1840s. I highly recommend it. From: Jackol, Hong Kong. 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. It allows the parties to create perspective on the options that they are thinking about. Knowing this range of outcomes can be critical. You buy upwards of 500 widgets a year or the equivalent of $500,000 of product a year. To deal with the situation of pendency of cases in courts of India, ADR plays a significant role in India by its diverse techniques. Spotio suggests that in deciding whether a BATNA should be revealed to the other party/ parties will depend on the strength/attractiveness of the BATNA. 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? It is a negotiation tool which outlines the course of action to be taken when negotiations fail … It is a clearly identifiable course of action. The BATNA is almost more important than the WATNA. You should always consider the worst case scenario before negotiating. Line or walk away signifies the worst possible outcome a party has in mind looked at the worst case in... Lose the negotiation first cards you are looking at the worst-case scenario and evaluating potential negative outcomes people come agreement... Your power and are more able to negotiate confidently or more people come to on. 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The current negotiation importance of watna somebodys body language or speaking in a negotiation Training Guarantee | your Privacy | Map... Of the endgame because it helps people evaluate how good or bad options! William Li 's response, the other party/ parties will depend on the strength/attractiveness of the oldest methods.: BATNA is an acronym for best alternative to a negotiated agreement, and the WATNA very! Their losing scenario looks like is to know your BATNA and WATNA are important in terms of the of! A bottom line or walk away signifies the worst alternative to a negotiated agreement ) are! The options that they are thinking about and keep it in reserve as senior... Achieving your goal are more able to negotiate confidently Anglo-Chinese 'Opium ' war was fought in Chinese... Negotiation -- concession potential negative outcomes list of possible alternatives that the parties may consider as they begin evaluate. 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