Even in the simplest of situations, negotiations may be challenging. There will inevitably be some opposition and the potential for difficulties when the goals and objectives of the two companies are combined.
Being organized is the best course of action in any negotiation situation. Changing your negotiation tactics frequently results in subpar results, missed terms, and unethical activities. On the other side, preparedness makes it easier to navigate the talks and often leads to more preferable solutions.
Here is what you need to know about this vital part of negotiating strategy to help you up your game.
Negotiation Power
A BATNA negotiation, or the phrase “best alternative to a negotiated agreement,” refers to a plan of action that a party to a negotiation has decided should be followed if talks break down and no deal can be achieved.
Recognizing the Best Remedy to a Negotiated Agreement (BATNA)
Anybody in a negotiating situation, whether an individual asking for a raise or a business considering a merger, can benefit from thinking about a BATNA. A party in discussions must consider their alternatives before deciding on accepting an agreement in an educated manner.
Knowing your BATNA beforehand gives you the freedom to back out of a bad contract.
What can you do, for instance, if you’re haggling over the price of a brand-new vehicle and the dealer’s last offer is unacceptable? The obvious choices are unsatisfactory. You have two options: accept a disliked deal or leave with nothing. Instead, if you know your criteria, you can visit a different dealer who you know sells another brand and type of car you prefer.
Even if you keep your status secret during the discussions, it still gives you negotiating power. You are aware that you don’t have to accept a poor offer.
If you believe you lack a BATNA, don’t freak out.
You may not believe you have such a BATNA if you receive one offer of employment or bidding on your house. You must distinguish between possessing a BATNA and just not loving your BATNA since, in reality, you always have one. If a job offer you’ve gotten, for instance, doesn’t include what you consider to be fair remuneration, it might be wise to keep seeking alternative options, especially if it’s still early in your pursuit. This is because you may not want to stay at your current position (your BATNA).
Benefits and Drawbacks of BATNA
A solid BATNA can be a useful negotiating tool since it lets parties base their positions on facts rather than feelings. Robust BATNAs also guarantee a fallback strategy, ensuring that the organization won’t be disrupted if negotiations fail. It reduces the likelihood of defeat; the more significant the BATNA, the more probable the opposing party will look for a compromise.
The BATNA procedure does come with a price, though. Finding the right option can be a time-consuming and expensive task in and of itself, depending on how complex the operation at hand is.
However, it is not a foolproof process, and negotiators risk underestimating their options or missing opportunities.
Benefits
- Outlines a fallback strategy if discussions are unsuccessful.
- Provides a solid factual foundation for talks.
- Increases the likelihood of agreement because a stronger BATNA is more apt to be favored by all parties.
Drawback
- It can be expensive and difficult to calculate BATNAs.
- It is still possible for negotiators to underestimate the costs or advantages of some options.
- The possibility of making a poor decision still exists.
