BATNA And Deal Making

When I migrated to the United States from Kenya, there were many (obvious) differences between the two environments-nay-cultures. The first time I was called for a job interview, I was not sure how it would go. This was my first time negotiating to a salary quoted in dollars. In Kenya, the currency used is the “Shilling.” I was not sure what the interviewer was looking for. When she asked me what I was looking to earn in base pay, I froze. I had not prepared adequately to answer the question. Concurrently, I was eager to get the job; an eagerness that may have pushed me to a position where I poorly negotiated the terms of employment.

As elucidated elsewhere on this blog, negotiating is part and parcel of  our everyday chores. Most of the times we are not aware that we are negotiating, or looking for the best deals. In the above-given example, as much as this was a job interview, we should look at it from the prism of negotiation and while at it, explore what could have led to the possibility of a better deal, or the satisfaction of the interests at hand. To achieve this, one has to possess a set of alternatives. This ideally, brings to focus the idea of BATNA.

BATNA means the Best Alternative to Negotiated Agreement. BATNAs are critical to negotiation because you cannot make a wise decision about whether to accept a negotiated agreement unless you know what your alternatives are.

In the above example, in the final analysis, I was short changed because I did not have at hand alternatives. A BATNA is a shield that protects one from accepting unfavorable terms. It makes it easy for you to reject terms that do not satisfy one’s interests.  Many are the instances where people concede to bad deals for lack of alternatives, making it impossible to push hard and get a better deal.

It is imperative to understand the difference between BATNA, MLATNA, and Bottom Line. While they are all geared towards reaching a compromise with another party, the application of each could mean different payoffs. MLATNA means the Most Likely Alternative to a Negotiated Agreement. In my example above, since there were no alternatives at my disposal, the deal I ended up with was the most likely given the circumstances, and therefore serves MLATNA. If I countered the offer on the table by asking for bonus-pay, and ceded ground in another area, this could have been my BATNA.

Did I have a bottom-line?  Absolutely. There was a deal I was not going to agree to. For example, if I was told the job was mine, but with no pay, I would have said no!

Knowing what alternatives one has before entering into any negotiation helps give the discussion a productive direction, one that will help satisfy as many interests as possible.


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