What If They Are More Powerful? (Develop Your BATNA—Best Alternative To A Negotiated Agreement)
Rabia Mustafa* and Sharafat A. Chaudhry**
Chapter 6 of the book ‘Getting to Yes Negotiating an Agreements without Giving in” is about knowing if they are powerful and influential and about developing your BATNA—Best Alternative to a Negotiated Agreement
Negotiation methods cannot guarantee success if all leverage lies on the other side. Powerful negotiations can be challenging to navigate, as they are influenced by factors such as wealth, connections, and resources. Two factors are important for the most effective negotiation method, firstly to protect against rejecting an agreement and secondly maximize the use of available assets to satisfy interests.
1. Protecting yourself
Negotiators often face the risk of being too accommodating to the views of the other side, leading to a bad agreement. To protect themselves, they often establish their ‘bottom line’ in advance, which is the highest price they would pay or the lowest amount they would accept. This helps resist pressure and temptations of the moment, and limits the authority of agents. However, adopting a bottom line has high costs. It limits the ability to benefit from what you learn during negotiation, inhibits imagination, and may be set too high. For example, if a family member suggests a lower price for their house, it may be hard to change and prevent the sale when it should have been. Moreover, a bottom line may be too low, as renting would be a better. Adopting a bottom line may protect you from accepting a bad agreement but may also prevent you from inventing and agreeing to a solution that would be wise to accept.
Knowing your Best Alternative To A Negotiated Agreement (BATNA)
The Best Alternative To a Negotiated Agreement (BATNA) is the standard against which any proposed agreement should be measured, protecting against unfavorable terms and rejecting those in the family’s interest. Comparing a proposal with BATNA can help determine if it better satisfies the family’s interests. When deciding on a house price, it’s crucial to consider the family’s future plans, not just what they want. They should consider options like renting, tearing down, or renting the house. The best offer received may not reflect the family’s interests, so negotiating should produce better results than obtaining them without.
In negotiations, it is crucial to consider your BATNA and avoid being too optimistic about your options. This can lead to a lack of appreciation for potential consequences, such as lawsuits, strikes, or wars. Psychologically, it is common to view alternatives in the aggregate, considering various options like moving some other place, going south, returning to school, writing, working on a farm, or living in Paris. However, it is important to remember that you cannot have the sum total of all these alternatives, and if you cannot reach agreement, you will have to choose one. Therefore, it is crucial to consider all options and make an informed decision. However, it is essential to develop alternatives and be willing to face the question of what to do if negotiations fail. A tentative answer to this question is essential for conducting negotiations wisely, as the best available alternative depends on your personal preferences.
The concept of trip wire
The concept of a ‘trip wire’ in negotiation is an early warning system to alert you when a potential agreement is becoming unfavorable. While your BATNA is your primary measure, a trip wire helps identify a less-than-perfect deal that is still better than your BATNA. If negotiations approach this point, you should pause and reassess before accepting anything worse. This tool also limits the authority of agents by setting a minimum acceptable threshold, ensuring they consult you before proceeding. Moreover, it provides some room for negotiation, allowing flexibility for mediators to work with, thus maintaining a strategic edge in the process.
2. Making the most of your assets
Protecting yourself against a bad agreement is one thing. Making the most of the assets you have to produce a good agreement is another. The answer to this lies in your BATNA.
Negotiating power is not solely determined by resources like wealth, political connections, physical strength, friends, and military might. The relative negotiating power of two parties depends on how attractive each side is to the option of not reaching agreement. For example, a wealthy tourist might be weak in a negotiation if they don’t know the cost and difficulty of finding a comparable pot elsewhere. The difference in power is determined by the best alternative for each side. This is also true for negotiations between individuals and organizations. For example, a small town could negotiate a company with a factory outside its limits from a ‘goodwill’ payment. The town had no alternative to reaching an agreement, and the corporation’s assets, such as jobs and taxes, proved of little use. A good BATNA allowed the small town to affect the outcome of the negotiation more effectively than a large corporation.
Developing your BATNA
Develop a BATNA to strengthen your hand in negotiations. This involves three operations:
(1) inventing a list of actions you might conceivably take if no agreement is reached;
(2) improving some of the more promising ideas and converting them into practical alternatives; and
(3) selecting, tentatively, the one alternative that seems best.
Inventing options like taking a job with another company or starting a business can help assess the merits of a negotiated agreement. Improving the best ideas can lead to real alternatives, such as turning ideas into drafts of operational decisions. Finally, selecting the best alternative can help you judge every offer against it. Knowing your BATNA will give you additional confidence in the negotiating process and make it easier to break off negotiations. The desirability of disclosing your BATNA depends on your assessment of the other side’s thinking. If your best alternative is better than they think, disclosing it will strengthen your hand.
Knowing the other side’s BATNA
When negotiating, it is essential to consider the other side’s BATNA and the available alternatives. This helps in estimating what can be expected from the negotiation and helps in avoiding unduly optimistic expectations. If the other side’s BATNA seems to be better for them than any fair solution, consider changing it. For example, if a community group is concerned about the potentially harmful gases from a power plant, their BATNA may be to ignore protests or keep them talking. To get them to take your concerns seriously, you may need to file a lawsuit to have their construction permit revoked. If both sides have attractive BATNAs, the best outcome may not be to reach an agreement. A successful negotiation is one where both parties agree to look elsewhere and not try further to reach an agreement. In such cases, a successful negotiation is one where both parties amicably and efficiently find the best way to advance their respective interests.
When the other side is powerful
When dealing with a powerful other party, it is crucial to avoid turning the negotiation into a gunfight. The stronger the other party’s physical or economic power, the more benefit you can gain from negotiating on the merits. Establishing a good BATNA can help you negotiate on the merits by converting resources into effective negotiating power. By applying knowledge, time, money, people, connections, and wits, you can devise the best solution for yourself, independent of the other party’s assent. The more easily you can walk away from a negotiation, the greater your capacity to affect its outcome. Developing your BATNA not only determines a minimally acceptable agreement but also likely raises that minimum.
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* The writer is a Linguist and Senior Research Fellow at the School for Law and Development
** The writer is an Advocate, an internationally accredited Mediator, and the author of Law and Development.
