Meaning Of Alternative To Agreement

Attractive alternatives are needed to develop a strong BATNA. In the bestseller Getting to YES: Negotiating Agreement Without Giving The authors make three suggestions to achieve this: in this case, there is a potential agreement zone – $6,000 to $7,500. Somewhere in this area, the two sides should be able to agree. A BATNA is not pre-packaged. A BATNA is the result of a two-step planning and preparation process. First, it is worth determining all the alternatives available. Then choose your most attractive and achievable alternative. Then you will evaluate the other negotiator`s alternatives realistically. These two steps are just as important. Find out which better alternative is stronger and more feasible. Contracting parties can adapt BATNAs to any situation that requires negotiations, from discussions on wage increases to resolving more complex situations such as mergers. BATNas are essential to negotiation because a party cannot make an informed decision on whether to accept an agreement unless it understands its alternatives. While a BATNA is not always easy to identify, Harvard researchers have outlined several steps to clarify the process: BATNA is often not seen by negotiators as a safety net, but as a bargaining lever.

Although a negotiator`s alternative options should theoretically be easy to assess, the attempt to understand what alternative BATNA represents for some is often not invested. Options must be real and achievable to be of value,[5][source of third party required] however, without the investment of time, often contain options that fail any of these criteria. [6] [Quote required] Most managers overestimate their BATNA while investing too little time in the search for their real options. [Third-party source required] This can lead to bad or wrong decisions and negotiations. Negotiators must also be aware of the other negotiator`s BATNA and determine how they compare to what they offer. [7] [Page required] For example, Company A made a US$20 million takeover bid to Company B. Nevertheless, Company B thinks they are worth $30 million in valuation. Company B quickly declined the offer. However, what Company B has not taken into account is increasing competition in the sector and stricter rules, all of which will limit growth in the coming year and reduce its valuation.

If Company B had taken the time to include these factors in the current assessment and had clearly followed the four batna steps, including #2, assessing the alternative to staying the course in a challenging business environment, management could have been persuaded to accept it.

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