Best Alternative to a Negotiated Agreement

In talks opening, the beaver alternative to a talk termsd balance or BATNA is the wrinkle of action that will be taken by a company if the current negotiations fail and an commensurateness cannot be r each(prenominal)ed. BATNA is the key focus and the driving force behind a successful negotiator. A caller should generally not accept a worse resolution than its BATNA. C ar should be taken, however, to ensure that deals atomic number 18 accurately valued, taking into account all considerations, such as relationship value, time value of property and the likelihood that the early(a) phonationy will live up to their side of the bargain.These another(prenominal) considerations are a lot difficult to value, since they are frequently based on uncertain or qualitative considerations, so unmatchedr than good measurable and quantifiable factors. The BATNA is often seen by negotiators not as a safety net, but rather as a point of leverage in negotiations. Although a negotiators alt ernative options should, in theory, be candid to evaluate, the effort to understand which alternative represents a partys BATNA is often not invested.Options need to be real and unjust to be of value,1 however without the investment of time, options will frequently be included that fail on one of these criteria. citation needed Most managers overestimate their BATNA whilst simultaneously investing too little time into researching their real options. citation needed This can allow for in poor or faulty decision making and negotiating outcomes. Negotiatiors as well need to be apprised of the other negotiators BATNA and to identify how it compares to what they are posting. 2 BATNA was developed by negotiation researchers Roger Fisher and William Ury of the Harvard Program on negotiation (PON), in their series of books on Principled negotiation that started with getting to YES, unwittingly duplicating a game theory concept pioneered by Nobel Laureate John Forbes Nash decades earl ier in his early undergraduate research. citation needed Contents hide 1 Definitions 2 Examples 2. 1 Selling a railroad car 2. 2 Purchasing 3 See also 4 References 5 External links editDefinitions BATNA An acronym defined by negotiation researches Roger Fisher and William Ury which means best Alternative to a Negotiated Agreement. 3 It is the alternative action that will be taken if your proposed agreement with another party result in an un equal agreement or when an agreement cannot be reached. Historical Theories The Nash Equilibrium as developed by John Forbes Nash, the father of Game scheme, is described in getting to YES3 as the be idea for the concept of BATNA in negotiation (Roger B. Myerson, April 1996). 4 In a nutshell, Nash Equilibrium theory explains that, if in a group of players, each player has in consideration the other players decisions, then no one will benefit from altering their decisions, if the other players give birthnt either. 5 Example of Nash Equilibri um Theory Amy and Phil are in Nash Equilibrium if Amy is making the best decision she can, taking into account Phils decision, and Phil is making the best decision he can, taking into account Amys decision. Likewise, a group of players are in Nash Equilibrium if each one is making the best decision that he or she can, taking into account the decisions of the others. We cannot think of BATNA without first-year understanding the notion of negotiation. Negotiation has been part of the business mentality of human beings as we hold out it, since the set-back of mankind.Take for example the Israeli-Palestinian conflict, one of the longest ongoing negotiations of the kind, based primarily on the dispute over disgrace (UN, 1948). We negotiate every single day of our lives whether it is goods, commodities, ideas, positions, or money. The list could be endless. For this reason knowing how to negotiate is very important. The idea is to have all parties mutually satisfied with the results a chieved through the highest standards of (Ethics) and legitimate standards.In no other time of world history as the modern days, has the ability and the necessity of knowing how to negotiate, using civilize tools and civil discourse been so essential to society. As explained in Getting to YES, We are each participants in a pioneering generation of negotiators it is central to human life and the survival of our species. 3 Negotiations Concepts Leading to Good BATNA A ruthless, high-pressure and cold blooded negotiation style is the framework approach most people have when it comes to negotiation,6 a theoretical example of that is Adversarial Approach Style Negotiation. 6 But in reality, as mentioned by experts and researchers such as Fisher and Ury 3 it doesnt have to be that way. As the world moves to more sophisticated platforms of communication, negotiation follows the apparent movement and Problem-Solving Approach(citation) is in a way, the antidote of Adversarial Approach Sty le Negotiation. Getting to YES3 suggest an Interest-Based sit around for the spend of Problem-Solving Approach. Interest-Based Model focus on separating the person (positional) from the problems (resolution) and then concentrate on the resolution.This way allowing for both parties in a distributive way to get the results they both want. ABCs of BATNA Having a BATNA (Best Alternative to a Negotiated Agreement) as part of the negotiation is imperative as the name explains. No one should come to the negotiation table without a BATNA. 7 This will allow for intelligent negotiation and bargain zones. In addition to having a BATNA, parties should have a Bottom Line or Reservation Price. What this prevents is that neither party will come out with agreements they adoptt need3 Often, parties go to the negotiation table with what they figure is a great BATNA.For example, how many times have you walked into a job interview with no other solid job offers in hand, let but perspective of soli d salaries, benefits and other great things you are looking for in a job. 3 The ability to be in a powerful position so the negotiation can be intelligent and satisfactory to both parties requires preparation and research. So do not cut yourself short for the lack of having a correct BATNA at all times. 3 If having a good BATNA in essential, developing a BATNA is equally important. Lets assume that you are going to work for a company that is not offering you the salary you desire.Instead, you know that they offer other perks such as, company cars, luxurious vacation homes, and state-of-the-art computers and laptops to their employees. In other words, Alternatives. 3 cute Alternatives is what you want to explore in order to develop a very strong BATNA. In Getting to YES, the authors give 3 suggestions of how you can accomplish this Inventing a list of actions you might take if no agreement is reached Converting some of the more promising ideas and transforming them into tangible an d partial alternatives Selecting the alternative that sounds bestBATNA rules Parties should never disclose their BATNA, unless, the alternative is better. In other words, if your best alternative to a negotiated agreement is better than what the other party is offering, then disclosing it, is to your advantage. If on the other hand it is worse, then do not disclose it. BATNA in Cross Cultural Frameworks shortly in the United States and due to recent world events, thither are more and more individuals with a different cultural background and approach to negotiation.When individuals come to the negotiation and bargaining table ready to use their BATNA, and one of the parties is from a different culture, there is a tremendous game change in approach. some(prenominal) parties need to think and account for cultural cognitive behaviors. Both parties must expand their thinking negotiation hats by not allowing external judgment and biases to affect the negotiation. As mentioned earlier, se parate the individual from the objective3 For example imagine you are negotiating with a party from an Arab Nation. Is this going to effect your view of how you are going to negotiate?Or even if you are the party from that nation, are you prepared to receive an offer lower than your BATNA because you know you are from a different culture. The previous is a very simple example, but the purpose here as Gulliver8 mentioned, is for negotiation parties to be aware. Disclosure This is a very new topic in negotiation and there arent many frameworks in place to help this scenario. Nonetheless, preparation at all levels, including prejudicial exculpate thoughts, emotional free behavior, biases free behavior are just a few ways match to the Handbook of Negotiations and Culture9 that can helps in the right direction. editExamples The following examples illustrate the basic principles of identifying the BATNA and how to use it in just negotiations to help value other offers. editSelling a ca r If the seller of a car has a compose offer from a dealership to buy the sellers car for $1,000, then the sellers BATNA when dealing with other potential purchasers would be $1,000 since the seller can get $1,000 for the car even without reaching an agreement with an alternative purchaser. In this example, other offers that illustrate the difficulty of valuing qualitative factors might include An offer of $900 by a close relativeAn offer of $1,100 in 45 days (what are the chances of this future commitment falling through, and would the sellers prior BATNA (the $1,000 offer from the dealership) assuage be available if it did? ) An offer from another dealer to offset $1,500 against the price of a new car (does the seller want to buy a new car right now, and the offered car in bad-tempered? ) editPurchasing Buyers are often able to leverage their BATNA with regards to prices. This is done through buying from the lowest cost or best value seller. editSee also Getting to YES Getting past No Conflict resolution researchAlternative fray stoppage in a Nutshell editReferences Best Alternative to a Negotiated Agreement Negotiation Experts Negotiation, Readings, Exercises and Cases, Roy J. Lewicki a b c d e f g h i j Fisher and Ury, Roger and William (2011). Getting to YES. Penguin Books. pp. 1170. ISBN 978-0143118756. Myerson, Roger B. Nash Equilibrium and the History of economic Theory. Nash Equilibrium and the History of Economic Theory. Journal of Economic Literature. Retrieved 1 October 2012. Hawkins and Steiner, Jeff and Neil. The Nash Equilibrium Meets Batna.Gamed Therory Varied Ueses in ADR. Harvard University Press. Retrieved 1 October 2012. a b Nolan-Haley, Jaqueline M (2001). Alternative Dipute Resolution in a Nutshel. Thomson West. pp. 3950. ISBN ISBN 978-0314180148. Honeyman and Schneider, Andrea and Chistopher (2006). The Negotiators Fieldbook Desktop Reference. American Bar Association. pp. 200300. ISBN 978-1590315453. Gulliver, P. H (1979) . Disputes and Negotiation A Cross Culture Perspective. Academic Press. p. 287. Brett and Gelfand, Jeanne and Michael (2004). The Handbook of Negotiations and