The Negotiation Checklist - Simons and Tripp.pdf

4 what is your batna before you begin a negotiation

Info icon This preview shows pages 6–7. Sign up to view the full content.

4. What is your BATNA ? Before you begin a negotiation, you need to have a backup plan in case you fail to reach an agreement with the other party. Negotiation scholars refer to this backup plan as the Best Alternative to Negotiated Agree- ment, or BATNA , for short. Are you, for instance, negotiating with the only supplier in town, or do you already have several attractive bids in your pocket? Alternatives make all the difference. Each side’s BATNA is a key factor in determining negotiation power. The better your BATNA , the better an offer the other party must make to interest you in reaching an agree- ment.Your BATNA —what you get if you leave the table without an agreement—determines your will- ingness to accept an impasse, which in turn tells you how hard you can press for a favorable agreement. You can negotiate hard for a job if you already have a few offers in your pocket. The better your BATNA , the more you can demand. Having a clear BATNA helps pro- tect you from accepting a deal that you would be better off not taking. Often people get caught up in the negotiation process and accept a contract they should have rejected. Knowing your BATNA can keep you from accepting an agreement that would make you worse off than you were before you started negotiating. Having identified your BATNA , calculate its value based on the scor- ing system you developed for step 3. That is, if the other party were to make an offer that was identical to your BATNA , how many points would that offer achieve under your scoring system? Use that score as a reference point to identify those agreements that are worth less to you than your BATNA . Even if it is difficult to assign a score to your BATNA because it is qualitatively different from the deal under negotiation or because it in- volves risk or uncertainty, you should nevertheless assign it a rough score for comparison purposes. 5. What is your resistance point? Your resistance point is the worst agreement you are willing to accept before ending negotiations and resorting to your BATNA . The resistance point is the point at which you decide to walk away from the table for good, and the BATNA is where you’re headed when you take that walk. You should choose your resis- tance point based primarily on how good your BATNA is. If your BATNA is great, you shouldn’t accept anything less than a great offer; if your BATNA is poor, you may have to be willing to accept a meager final offer. Don’t forget to factor into your resistance point the switching cost and the risk of the unknown that you would be taking if your BATNA involves chang- ing suppliers. To illustrate the effect of switch- ing costs, put yourself in the “buy- ing” position of the conference or- ganizer described in Exhibit 1.
Image of page 6

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Image of page 7
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern