Alternatives and BATNA in Interest Based Negotiation - Noam Ebner

I want to introduce something that has become a very very fundamental term both in interest

based negotiation and in positional bargaining. And that is the term of BATNA or best alternative

to negotiated agreement. BATNA is an acronym but people use it as if it were a word, so

familiarize yourself with it and I'll explain what that means. When you're negotiating with

someone about something, chances are that you have alternatives with other people outside

the room meaning that sure you could seal a deal with the person you're negotiating

with now but you might also be able to go and to negotiate with someone else and receive

this same object or the same value or the same item from through a different negotiation.

For example. if I'm buying a used car from someone and we're discussing the price of

a Ford Focus I could say you know what I'm leaving this negotiation and what do I have

out away from the table: I have another negotiation with another car salesman for another Ford

Focus. So, in every negotiation I have alternatives which are things I can do on my own outside

of the negotiation. I don't need one car salesman's agreement in order for me to go and talk to

another car salesperson. So this is something I can do on my ow. So my alternatives are

basically things I can do if I decide to put this negotiation on ice. Now, in most negotiations

we have many alternatives. Some of them are desirable alternatives and some of them aren't

so desirable alternatives. For example, when we're negotiating with our boss for a raise,

one alternative we have is we can always quit and go work somewhere else. That might be

a very desirable alternative if the alternate place really exists and if they're offering

a lot more money and etc. It might not be a desirable alternative if we're not so sure

it exists or if they're offering low salaries. So, alternatives don't necessarily mean that

we can just go out and do anything, but it does mean that we have a range of choices

including the negotiation we are taking part in and we need to choose from all of these

alternatives. We need to choose what will serve us best. A BATNA is our very best alternative.

The best alternative is the one that we zoom into in our negotiation analysis. The best

alternative is if we would set this negotiation aside, again we are negotiating over the price

of 2010 Ford Focus. If we would set this negotiation outside and I would say you know what I'll

be back in a while and I would go out and I would talk to this car dealership about

that Ford and a different car dealership about a different Ford and a third car dealership

about a different Ford, then what I have now is I have three alternatives. We're not in

this game to gather as many alternatives as we can. In the end, we're only going to buy

one car, so it's not so important to have a gazillion alternatives. What is important

is to identify which of these alternatives is the best one, because that is our benchmark

for many things, so what we're going to try and do is, we try and understand which of

these three Ford Focuses is our best Ford Focus to negotiate over and buy, and then

that becomes our BATNA. So, with our BATNA, our best alternative to a negotiated agreement

with car person over here is buying a Ford Focus from car dealership number four over

there then we now know that if this deal doesn't work out this is what's in the wings. SO this

concept of BATNA, we've demonstrated how it works in negotiation. Most of our examples

so far are how it works in positional bargaining, but it also works in interest based negotiation

especially Fisher and Yuri recommend that the BATNA be a way that you avoid giving in

to power. When someone tries to squeeze or to demand just a little more out of you, you

can just say, use your BATNA as a shield, why should I do that? I can do better elsewhere.

Why would I give you what you want when I could do better elsewhere? Help me understand

what you're offering and maybe sweeten the deal a little. They also recommend that you

use your BATNA in that way. Instead of applying direct power, which is kind of a no no in

the way interest based negotiation sees things. You don't apply direct power with a threat

or an ultimatum but with sharing your BATNA, saying look I'd really love to do business

with you but Tony down the block has offered me the car for less and I think we could come

to a deal that would be beneficial to us all, but obviously I'm not going to take a deal

that doesn't work for me so let's sit down and really talk about what's important to

us. So that's how BATNA might be used in interest based negotiation.