16 February 2010

Negotiation Series: Best Alternative to Negotiating an Agreement (Part II)

Early this year, I introduced to you the term BATNA, or rather the Best Alternative to Negotiating an Agreement.  Whether or not this was the first time you’ve encountered this terminology, it was probably a good reminder of certain key behaviors to exhibit when negotiating agreements in both your professional and personal lives.  Let’s continue the introduction here with an analysis of other key BATNA skills.

In Part I, I discussed a number of BATNA Do’s and Don’ts—

  • DO enter a negotiation knowing what your BATNA is.
  • DO seek to improve your BATNA over time.
  • DON’T reveal your BATNA too soon or ever, except if negotiations are stalled or you don’t mind accepting your BATNA over a more agreeable negotiated offer.

One more important Don’t is do not lie about your BATNA.  First and foremost, lying is unethical and immoral and will reflect on your ethical and moral values if uncovered.  Also, in a contractual setting, lying may be illegal and may result in a lawsuit or other criminal proceedings.  Besides, what if your bluff is called?

Now, with the Don’ts out of the way, let’s think a little more about other acceptable BATNA behaviors.  You should probably do some research to try to uncover more about your counterparty’s BATNA.  The more information you have about your counterparty’s BATNA, the better you will be able to plan your offers and counteroffers during the negotiation process.

You should also be prepared to signal, but not reveal, that you have a BATNA.  Times to signal your BATNA are

  • If you are asked if you have a BATNA, go ahead and answer yes without revealing what it is.
  • If you suspect that the counterparty is underestimating your negotiating potential, signal that you have a BATNA without revealing it.
  • Also, signal your BATNA to correct misinformation and to defend against lowball offers and counteroffers.

Next, determine the monetary value of your BATNA.  This value is your reservation price during a negotiation.  Reservation prices are generally subjective and depend on such things as your risk tolerance, your values, your time commitments, etc.  Use your reservation price to direct you in an assessment of your BATNA’s tangible value.

This brings us to understanding that in every negotiation there is a zone of possible agreement, or ZOPA.  The ZOPA is the bargaining zone that bounds your reservation point and your counterparty’s.  Another way to define ZOPA is the range from the least amount the seller is willing to accept to the most the buyer is willing to pay.  It is likely that an agreement will be made somewhere within the ZOPA.

Beware that you do not accept the first offer that is better than your BATNA, because you may not be maximizing the ZOPA.  In order to avoid doing this, you should try envisioning your ideal offer and shoot for this aspiration point during your negotiation.  If you have an aspiration point in mind, it is unlikely that you will settle for the first offer above your BATNA.

Now that you have a few more skills in your negotiations toolbox, try using them during your next negotiation and see how far a little upfront planning will carry you in reaching beyond your BATNA to your ideal offer.

Posted by: Tamboura Gaskins at 16 February 2010 7:12 pm | Category: Negotiation | Tags: ,

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