BATNA

What is a BATNA?

BATNA stands for Best Alternative to a Negotiated Agreement. It is the best available course of action if the parties do not reach an agreement. It provides a reference for deciding whether a proposed deal is preferable to acting outside the negotiation.

BATNA versus a walk-away price

A BATNA is not the same as a target outcome or a walk-away price. The alternative may involve different timing, obligations, costs, and risks. Guhan Subramanian’s guidance for Harvard’s Program on Negotiation emphasizes translating those differences before comparing an alternative with the current offer.

BATNA example

For example, another supplier’s lower price may come with delivery terms that make it less attractive. The comparison should concern the full arrangement and whether the alternative is actually available.

How to determine your BATNA

1. List what you could do if this deal falls through.
2. Check which alternatives are actually available. Compare their costs, timing, obligations, and risks.
3. Select the best feasible option. Compare the current offer with that full alternative.
4. Reassess when new information changes your options.

Using your BATNA in negotiation

A credible alternative gives you a reason to walk away from a worse deal. Work on improving that alternative before the negotiation, where possible. Having a second quote is more useful than merely hoping another supplier will offer better terms.

Whether to disclose your BATNA depends on the situation. A strong alternative may support your position; revealing a weak one may do the opposite. Consider the other party’s alternatives too, while separating what you know from what you are guessing.