Negotiating Without a BATNA
Chloe Xu, Australia, Premium Member
As discussed in my post “BATNA: Should You Accept or Reject a Deal”, having an established BATNA is fundamental to negotiation strategy as it helps people to determine when to walk away from a negotiation. But what would happen if the negotiation involved a sole supplier or no strong outside alternative is available? Is it possible to negotiate in business without having a (good) BATNA?
It is obvious that the likelihood that such at-the-negotiation-table strategies will succeed with an uncooperative negotiator is small. Negotiation researcher David Lax proposed in his book “3-D Negotiation” some alternate approaches that aim to achieve leverage from deal set-up and deal-design:
TIPS FOR MOVES IN EACH DIMENSION
- SETUP MOVES. Begin by setting the table favorably. Invite the right people, dealing with the right group of issues and interests, and facing the right outside alternatives. Such setup moves increase the possibility that the other party will perceive your proposals as more attractive than those of your competitors.
- FOCUS ON INTERESTS. Find out the stakeholders within the other party who might be affected by an agreement, and their interests.
- EVALUATE THE OTHER PARTY’S ALTERNATIVES. In this step, you may be able to worsen the other party’s BATNA. And if you currently do business with the other party’s company in another area, you could move that business elsewhere.
- THINK FOR LONGER TERM. And if the benefits of having a better alternative exceed the cost of getting it, make investment now to create a BATNA for the next round of negotiation.
- DEALMAKING STRATEGIES AND DEAL DESIGN. Before the negotiation even starts, look for ways to engineer more value for everyone involved.
For example, if you help the other party cut manufacturing costs, you may hurt a sales team that receives revenue-based bonuses. Thus, you might target people who have the organization’s broadest interests at heart.
To allow a lower price, you might suggest additional areas in which you could do business.
⇒ Have you had any additional experiences in negotiation without a BATNA and how did you deal with it?
Sources: Lax, D. "Negotiation in Business Without a BATNA - Is It Possible?", Program of Negotiation, Harvard Law School, January 2008.