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Prasanna .Sap
BATNA (Best Alternative to a Negotiated Agreement) and WATNA (Worst Alternative to a Negotiated Agreement) are two important concepts that can significantly impact the negotiation outcome.
BATNA refers to the best possible outcome that can be achieved if the negotiation fails and no agreement is reached. It is the alternative that a negotiator can fall back on if the current negotiation fails. A strong BATNA gives a negotiator more bargaining power and can help them set higher goals and negotiate more aggressively.
"Your BATNA is your Best Alternative To a Negotiated Agreement. The more attractive your BATNA, the more confident you can be about asking for more in the current negotiation. If you can't reach a satisfactory agreement in the current negotiation, what will you do? Your answer to this question is your BATNA. The better your BATNA, the greater your power. If you have a very attractive alternative,you may not need the agreement as much as the other side does." (Book 'Getting to YES')
Why it is important to identify your BATNA before a negotiation?
Provides clarity: When you know your BATNA, it provides clarity on your options and the outcomes that you are willing to accept. It helps you assess the value of the agreement that is on the table and whether it is better than your alternative options.
Gives you leverage: If you have a strong BATNA, it gives you leverage in the negotiation. You can use this to negotiate a better deal or to walk away from the negotiation if the terms are not favourable.
Reduces anxiety: Knowing your BATNA before negotiation can reduce anxiety and increase confidence in your negotiation position. It helps you prepare for potential outcomes and be more strategic in your negotiation approach.
Saves time: By identifying your BATNA, you can quickly determine whether the negotiation is worth pursuing or if it is better to focus your time and resources elsewhere.
On the other hand, WATNA refers to the worst possible outcome that a negotiator could face if no agreement is reached. It is important to consider WATNA because it can help a negotiator determine the minimum acceptable agreement and avoid agreeing to a worse outcome.
"Negotiators should assess their WATNA carefully before entering into a negotiation. Knowing your WATNA allows you to determine the point at which you should walk away from the negotiation. By identifying the point at which you are better off without a deal, you can protect yourself from agreeing to a bad deal simply because you fear that the alternative is worse." (book 'Negotiation Genius')
Conclusion:
It is important to note that while BATNA and WATNA are important concepts in negotiation, they may not always be the most effective or appropriate approach. In some cases, relying too heavily on BATNA and WATNA can limit a negotiator's ability to create value and build long-term relationships. Additionally, the use of these concepts assumes that the negotiator has a good understanding of their own and the other party's alternatives, which may not always be the case.
Therefore, negotiators should approach BATNA and WATNA with caution, and consider other strategies and tactics that may be more effective in different situations. This may include focusing on creating value, building relationships, and engaging in collaborative problem-solving. Ultimately, the key to successful negotiation is to remain flexible and adaptable and to be open to a range of different strategies and approaches.
References:
1)'Getting to YES'.(Roger Fisher and William Ury).Second edition by Fisher, Ury and Patton .RANDOM HOUSE BUSINESS BOOKS(1977).(Online).https://www2.hawaii.edu/~barkai/HO/GTY.pdf
2)'Negotiation Genius' (Deepak Malhotra and Max Bazerman).Harvad Business School.2012(p.22).
3) WATNA: Worst Alternative To A Negotiated Agreement.Business / By Gennaro Cuofano / December 21, 2022. https://fourweekmba.com/watna/
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5 Comments
Congratulations! You were affected by a different implementation and in a different area. The benefit of having your best alternative to a negotiated deal is that it gives you a backup plan in case negotiations fail. That gives you clout in negotiations. It chooses the location of your reservation (the worst price you are willing to accept)
ReplyDeleteBATNA stands for best alternative to a negotiated agreement
WATNA is the worst alternative to a negotiated agreement
Thanks.You can go for a win-win negotiation ,when BATNA and WATNA on your hand.
ReplyDeleteI agree with your points, but applying these ideas to the bargaining process might have certain drawbacks.
ReplyDelete1. Too much reliance on your BATNA or WATNA might restrict your concentration and creativity when trying to come up with solutions that benefit both parties. Additionally, it may cause you to become rigid during negotiations and keep you from considering different options.
2. Unreasonable expectations: People can overestimate the effectiveness of their BATNA or underestimate the possible expense of their WATNA, which can result in unreasonable expectations and results that may not be feasible.
3. Competitive attitude: Concentrating too much on your BATNA or WATNA might lead to a competitive mindset when one side is seeking to gain an advantage over the other and the negotiation turns into a zero-sum game. This may eventually result in a less pleasant conclusion for both parties and might cause a breakdown in communication and confidence.
Overall, BATNA and WATNA can be useful negotiating tools, but for the greatest results, it's vital to combine them with other negotiation methods and strategies.
The article discusses the importance of identifying BATNA (Best Alternative to a Negotiated Agreement) and WATNA (Worst Alternative to a Negotiated Agreement) in negotiations. BATNA refers to the best possible outcome if the negotiation fails, while WATNA refers to the worst possible outcome. Identifying these alternatives can provide clarity, give leverage, reduce anxiety, and save time. However, relying too heavily on these concepts can limit a negotiator's ability to create value and build long-term relationships. Therefore, negotiators should approach BATNA and WATNA with caution and consider other strategies and tactics that may be more effective. Well done ..!! Prasanna.
ReplyDeleteHaving a BATNA and WATNA in a negotiation can provide valuable information and leverage, helping organizations to make better decisions and achieve favorable outcomes. Attractive article. Well done.
ReplyDelete