Learning & Development

Understanding BATNA

Although many employees think only lawyers and salespeople are involved in negotiations, the reality is that these types of negotiations take place in the office all the time between departments, with customers and business partners, and between bosses and subordinates.

Unfortunately, many of those who may be required to engage in professional negotiations don’t have training in even the most fundamental negotiating skills or techniques. One key negotiating concept that should be understood is “best alternative to a negotiated agreement” (BATNA).

The Birth of BATNA

The term BATNA was coined by Roger Fisher and William Ury in their 1981 book Getting to Yes: Negotiating Agreement Without Giving In.

BATNA can be thought of as the consequence of walking away. Consider, for example, a tourist haggling with a vendor at a flea market for a decorative souvenir. The vendor is asking for $50, but the tourist is offering just $20. They may go back and forth until they find some mutually agreeable price in the middle, or they may not be able to negotiate at all.

In this example, the tourist’s BATNA is leaving the flea market without the vendor’s souvenir, and the vendor’s BATNA is not selling the souvenir to the tourist. If they’re both comfortable living with their BATNA, they’re much less likely to give in to each other’s demands.

If, however, the tourist is short on time before returning home and absolutely must have a souvenir for his or her child, the tourist’s BATNA is less appealing.

Applying BATNA

Therefore, BATNA strongly influences the parties’ leverage in the negotiation. In the corporate context, a manager’s BATNA in a salary negotiation with a key employee may be losing the employee. A potential customer’s BATNA may be settling for a less attractive product or service.

Although BATNA is straightforward, it’s a concept that’s often overlooked by those without much experience in negotiations. Understanding the other party’s BATNA is key to understanding one’s own bargaining power in any given situation.

Not every employee needs to be a seasoned negotiator, but BATNA is a useful concept for those who may face any type of negotiation.

Lin Grensing-Pophal is a Contributing Editor at HR Daily Advisor.