Best Alternative to a Negotiated Agreement

Bottomline Versus BATNA

•Bottomline is the worst acceptable
outcome.
•BATNA is the standard against which
any proposed agreement should be
measured.
 Best Alternative to a Negotiated Agreement

“Accept or Reject? Sometimes the Hardest

Part of Negotiation is Knowing When to
Walk Away. A Negotiator’s BATNA is the
course of action he will pursue if the current
negotiation results in an impasse. An
evaluation of your best alternative to a deal is
critical if you are to establish the threshold at
which you will reject an offer”, said Professor
Deepak Malhotra of the Harvard Business
 Best Alternative to a Negotiated Agreement

Determine BATNA before the talks begin by

tsking the following three steps.
1.List your Alternatives – all the available
alternatives if Negotiation ends in impasse
2.Evaluate your Alternatives – Examine each
option to find the value of pursuing each one
3.Establish your BATNA – Choose a course
that would have the highest expected value
 Best Alternative to a Negotiated Agreement

Reservation Value
Based on BATNA, calculate your
‘Reservation Value’ – the lowest valued deal
you are willing to accept. If the value of the
deal proposed to you is lower than the
Reservation Value, you will reject the offer
and pursue your BATNA. If the final offer is
higher than your reservation value, you will
accept it.