Preparing for a Negotiation: BATNA or Bottom Line?




Negotiating and Bargaining
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Chloe Xu
Director, Australia

Preparing for a Negotiation: BATNA or Bottom Line?

It is important to prepare yourself for any negotiation, including the minimum you are willing to accept. In my post on BATNA (Best Alternative to a Negotiated Agreement) I explained this concept and argued it is critical for negotiators as they cannot make a wise decision about whether to accept or reject an offer unless they are clear about what their best alternative is.

I also mentioned that in the process of developing a BATNA, reservation value (aka bottom line) needs to be considered. As BATNA is evaluated based on bottom line, are BATNA and Bottom Line in fact the same thing?

BOTTOM LINE
A Bottom Line is the least price you will accept as a seller, or the most you will pay as a buyer. The bottom line is meant to act as the final barrier where a negotiation will not proceed further. It is a means to defend oneself against the pressure and temptation that is often exerted on a negotiator to conclude an agreement that is self-defeating. Although bottom lines definitely serve a purpose, they also regrettably foster inflexibility, stifle creativity and innovation, and lessen the incentive to seek tailor-made solutions that resolve differences.

BATNA
In contrast to a bottom line, a BATNA does not concern itself with the details of any particular negotiation, but rather determines the course of action if an agreement is not reached within a certain time frame. As a gauge against which an agreement is measured, it prohibits negotiators from accepting an unfavourable agreement or one that is not in their best interests because it provides a better option outside the negotiation.

Since BATNA is the alternative to what a negotiated agreement would offer, it permits far greater flexibility and allows much more room for innovation than a predetermined bottom line. When a negotiator has a strong BATNA, (s)he also has more power because he possesses an attractive alternative that he could resort to if an acceptable agreement is not achieved.

⇒ Any further tips for BATNA? What other tools do you recommend to prepare a negotiation?

Source: Chern, C. 2014, The Commercial Mediator's Handbook, CRC Press.
 

Rating

 
6
Ohstrom
Management Consultant, United States
 

Preparing for Negotiations

BATNA is a good approach to use, since it allows a party to walk away if there is not enough "common... Sign up

 
4
Colin Goodluck
Student (University), Guyana
 

BATNA & Bottom Line

BATNA & Bottom Line have both worked for me at one negotiating table dealing with the same customer.... Sign up

 
3
Josephat Olwal Ngesah
Kenya
 

BATNA or Bottom Line

Personally, I think what matters is if the agreement is meeting my or my company's interests. Howev... Sign up

 
3
Paul A Ford
Project Manager, United States
 

BATNA versus Bottom Line

This subject was part of my Communications for Project Managers graduate class. I learned that there... Sign up

 
1
Colin Goodluck
Student (University), Guyana
 

Leaving Money on the Table is Sometimes Necessary

@Paul A Ford: I feel that leaving money on the table is sometimes necessary, because the opportunity... Sign up

 
1
Carlos Espinosa Fernandez, Mexico
 

Batna versus Bottom Line

The best negotiation is the one in which both parts feel "it could be better". The price balances w... Sign up

 
0
Kiruba Nagini R
Student (MBA), India
 

BATNA versus Bottomline

Choosing between BATNA or Bottom line must not go against the organization's interest. So a negotiat... Sign up

 
2
Jaap de Jonge
Editor, Netherlands
 

Meaning of Bottom Line in Negotiating

@Kiruba Nagini R: Be careful not to mix up the term "bottom line" as it is used here, in the context... Sign up

 
4
David Miller
United States
 

Most Desired Outcome(MDO) and Least Acceptable Agreement (LAA)

When preparing for a negotiation, it is critical to also determine your Most Desired Outcome (MDO), ... Sign up

   

More on Negotiating and Bargaining:
Summary
Discussion Topics
Four Principles for Effective Negotiation
Communication Style in Negotiations: Tough or Nice?
👀Preparing for a Negotiation: BATNA or Bottom Line?
Negotiating for Personal Purposes (Kolb)
Negotiating while Making Multiple Equivalent Simultaneous Offers: THE MESO STRATEGY
Negotiation Strategies and Tactics
Issues in the Negotiation Process (Manning & Robertson)
Negotiating Without a BATNA
Asking Advice to your Counterpart in Negotiations
Different Negotiating Types / Bargaining Styles
Negotiation Intentions of Mastenbroek
Tripartite Social Dialogue to Build Trust and Collaboration Among Government, Business and Labour
Rules and Tips for Price Negotiations
Negotiation: The Final Offer Arbitration Challenge
BATNA: Should you Accept or Reject a Deal?
The Ethics of Negotiations
Stages in the Negotiation Process (Manning & Robertson)
How to Avoid Legal Pitfalls of Negotiating Contracts?
🔥What is a Pre-Negotiation Agreement? Good Faith
Collective Bargaining : Role of Chairman?
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