BATNA stands for Best Alternative to a Negotiated Agreement. It is a term used in negotiation theory to refer to the most advantageous alternative course of action a party can take if negotiations fail and an agreement cannot be reached. BATNA was developed by negotiation researchers Roger Fisher and William Ury of the Harvard Program on Negotiation (PON) .
A party’s BATNA represents their best option if negotiations fail, whereas a reservation value represents the worst deal they are willing to accept. For example, when purchasing a bike, the BATNA may represent the option of shopping at another dealer, while the reservation value would represent the highest price you are willing to pay.
A strong BATNA can be a valuable card at the negotiating table, allowing parties to ground their positions on a factual basis rather than emotions. Strong BATNAs also ensure a backup plan, so that the organization will not be interrupted if the negotiations fail. It makes failure less likely; the stronger the BATNA, the more likely the opposing party is to seek a mutual agreement.
Knowing your BATNA is important in negotiation tactics and should always be considered before a negotiation takes place. It is never wise to enter into a serious negotiation without knowing your BATNA. The value of knowing your best alternative to a negotiated agreement is that it helps you to identify a good Plan B and keep it up your sleeve and ready to use, in case the main goal of your negotiations turns out to be impossible to achieve.
