BATNAs are essential to negotiation because you cannot make wise decisions about whether or not to accept a negotiated agreement, unless you know what your alternatives are. If you are offered a used car for 7500 $US, but there is a better one at another dealership for $6,500 – the car is your BATNA. Another term for the same thing is your “walking point.” If the seller does not drop their price below $6500, you will walk AWAY and buy the other car. When balancing these different alternatives to see what is “best,” community members need to consider a number of factors. Negotiations are more than the definition of a number of alternatives. Understanding the nuances of negotiating tactics can help improve industrial relations by terminating difficult conflicts. Understanding the negotiations can also help you assess personal strengths and weaknesses in the event of a conflict and learn how to manage your negotiating tendencies. Finally, studying the common and potentially manipulative negotiating tactics used by some people can help negotiators neutralize their effects. These types of questions must be answered for each alternative before a BATNA can be identified in a complex environmental conflict such as this. Contracting parties can adapt BATNAs to any situation that requires negotiations, from discussions on wage increases to resolving more complex situations such as mergers. BATNas are essential to negotiation because a party cannot make an informed decision on whether to accept an agreement unless it understands its alternatives. Although a BATNA is not always easy to identify, Harvard researchers have outlined several steps to clarify the process: the best alternative to a negotiated agreement (BATNA) is the procedure that a negotiating partner will take if talks and agreement fail. Negotiators Roger Fisher and William Ury used the term BATNA in their 1981 bestseller “Getting to Yes: Negotiating Agreement Without Giving In.” A party`s BATNA refers to what a party can rely on if a negotiation proves unsuccessful.
Third parties can help thinkers accurately evaluate their BATNas through reality tests and calculations. During the reality tests, the third party helps to clarify and welcome each party`s alternatives to the agreement.