What is Best Alternative To A Negotiated Agreement?

Legal Definition
In negotiation theory, the Best Alternative to a Negotiated Agreement or BATNA is the most advantageous alternative course of action a party can take if negotiations fail and an agreement cannot be reached. BATNA is the key focus and the driving force behind a successful negotiator. A party should generally not accept a worse resolution than its BATNA. Care should be taken, however, to ensure that deals are accurately valued, taking into account all considerations, such as relationship value, time value of money and the likelihood that the other party will live up to their side of the bargain. These other considerations are often difficult to value, since they are frequently based on uncertain or qualitative considerations, rather than easily measurable and quantifiable factors.

The BATNA is often seen by negotiators not as a safety net, but rather as a point of leverage in negotiations. Although a negotiator's alternative options should, in theory, be straightforward to evaluate, the effort to understand which alternative represents a party's BATNA is often not invested. Options need to be real and actionable to be of value, however without the investment of time, options will frequently be included that fail on one of these criteria. Most managers overestimate their BATNA whilst simultaneously investing too little time into researching their real options. This can result in poor or faulty decision making and negotiating outcomes. Negotiators also need to be aware of the other negotiator's BATNA and to identify how it compares to what they are offering.

Some people may adopt aggressive, coercive, threatening and/or deceptive techniques, this is known as a hard negotiation style; a theoretical example of this is adversarial approach style negotiation. Others may employ a soft style, which is friendly, trusting, compromising, and conflict avoiding. According to Fisher and Ury, when hard negotiators meet soft negotiators, the hard negotiators usually win their position, but at the cost of potentially damaging the long term relationship between the parties.

Attractive alternatives are needed to develop a strong BATNA. In the best-selling book Getting to YES: Negotiating Agreement Without Giving In, the authors give 3 suggestions of how to accomplish this:

  1. Inventing a list of actions one might take if no agreement is reached
  2. Converting some of the more promising ideas and transforming them into tangible and partial alternatives
  3. Selecting the alternative that sounds best

In negotiations involving different cultures, all parties need to account for cultural cognitive behaviors and should not let judgments and biases affect the negotiation. The individual should be separate from the objective.

The purpose here, as Gulliver mentions, is for negotiation parties to be aware.

Preparation at all levels, including prejudice-free thoughts, emotion-free behavior, bias-free behavior are helpful according to Morris and Gelfand.
-- Wikipedia
Legal Definition
The best way to handle a situation if negotiations fail. It occurs when a party won't give in. Its used as a benchmark to compare any settlement to.