BATNA stands for the Best Alternative To a Negotiated Agreement. It is the most advantageous course of action a party can take if negotiations fail and an agreement cannot be reached. It is not the bottom line or the least acceptable offer; it is a separate, independent plan of action.
Key Aspects of BATNA
- Source of Power – A strong BATNA gives a negotiator the power to walk away from an unfavorable deal, which is the most significant source of leverage.
- Defines Your Walk-Away Point – You should never accept an agreement that is worse than your BATNA.
- Requires Preparation – Determining your BATNA requires research, brainstorming, and a realistic assessment of all available alternatives.
- Is Dynamic – Your BATNA can change as new information becomes available or as circumstances evolve.
- Should Be Kept Private – You generally do not reveal your BATNA, though you might allude to having strong alternatives.
How to Determine Your BATNA
| Step | Description | Action |
|---|---|---|
| 1. Brainstorm Alternatives | List all possible actions you could take if you cannot reach an agreement in the current negotiation. | What will you do if this deal falls through? |
| 2. Develop Promising Ideas | Explore the most promising alternatives and convert them into practical, actionable plans. | Flesh out the details, costs, and benefits of the top 2-3 options. |
| 3. Select the Best Alternative | Choose the single course of action that would provide the most value to you or your project. | This single, best option is your BATNA. |
Example Scenarios
Procurement Negotiation
A project manager is negotiating with Vendor A, who is quoting 85,000. The PM will not accept any deal from Vendor A that is worse than the value offered by Vendor B.
Resource Allocation
A project manager is negotiating with a functional manager to get a key engineer for their project. The functional manager is reluctant. The project manager’s BATNA is to hire an external contractor with the same skills. This alternative has a known cost and timeline, giving the PM a strong position to negotiate from.
Job Offer
An individual is negotiating a salary for a new job. The company offers 85,000 but has a better work-life balance. They can use this strong alternative to confidently ask for a higher salary.
Why BATNA Matters
- Prevents Bad Agreements – It provides a clear standard against which any proposed agreement can be measured.
- Increases Negotiation Power – The better your BATNA, the more power you have. If you have a great alternative, you don’t need to concede as much.
- Reduces Pressure – Knowing you have a viable backup plan reduces the stress and pressure to reach a deal at any cost.
- Builds Confidence – It allows you to negotiate with more confidence and clarity, knowing exactly when to walk away.
See also: Negotiation, Conflict Resolution, Procurement Management, Stakeholder Management.