Transcript Three Essential Elements: BATNAs, Issues, and Priorities

Preparing To Negotiate
MEET U.S. Program
Professor David Schkade
Rady School of Management
University of California, San Diego
Three Essential Elements:
BATNAs, Issues, and Priorities
• BATNA = Best Alternative To a Negotiated Agreement
– What will you do if you don't reach an agreement?
– Your negotiating power depends on your BATNA
– Can be a sure thing or a risky prospect
– May take time and effort to develop a good one
– Lay groundwork ahead of time; obtain backup
agreement, if possible
MEET U.S.
BATNA Strategy
• Don't over-estimate your BATNA
– "I have lots of options”
– "I can always get my old job back"
• Don't under-estimate your BATNA
– "What's the worst thing that can happen?"
– "How bad would it really be?”
Strong BATNA  Be sure to let the other side know
Weak BATNA  Keep it to yourself!
• What is their BATNA?
– Can I weaken it?
– Have they over- or under-estimated their BATNA?
MEET U.S.
Issues and Priorities
• Issues — What are the underlying problem dimensions?
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–
–
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Issues vs. positions
Sometimes not explicitly stated
Usually there are several issues
Is the other party concerned with the same issues as
you?
• Priorities — What really matters to you?
– Which issues are most, and least, important to you?
– Your priorities are probably different than theirs
– Options may (will) change during a negotiation
MEET U.S.
Other Key Considerations:
The Bargaining Zone and the Problem
• Bargaining Zone
– Buying vs. selling prices
– Resistance point = your “limit” on a given
issue
– Reservation price vs. BATNA
MEET U.S.
A Salary Negotiation
Min Selling Price
Max Buying Price
Reservation Price
Resistance Point
Reservation Price
Resistance Point
$100,000
$80,000
The Bargaining Zone
MEET U.S.
A Two-Issue Job Negotiation
Days of Vacation
($85K, 14 days)
21
The
Bargaining
Zone
7
($95K, 7 days)
$100,000
$80,000
Salary
MEET U.S.
Other Key Considerations:
The Bargaining Zone and the Problem
• Know Your Problem
– A key to creative solutions is knowing what's possible
– Helps to develop more attractive BATNAs, offers
– Know your resources
• budget
• know what you can and can't deliver
MEET U.S.
Preparing to Negotiate: Summary
1. Know yourself.
• BATNA, issues, priorities, resistance points
2. Know your opponent.
• BATNA, issues, priorities, resistance points
3. Know your problem.
"Successful" agreement  Both sides exceed their BATNAs
If you can’t beat your BATNA, the best agreement is no agreement!
MEET U.S.
Notes on Negotiation Exercises
•
In these exercises your job is to assume the role of the person described in your packet to
the fullest extent possible.
•
Inevitably, your own personality, feelings, and knowledge will influence how you play your
role (you can't have a personality transplant every week). This is OK. But do your best to
stay “in character”.
•
It’s hard work to play the role of a person who isn’t you and who you don’t know. But it is
important to the learning process of your fellow students, as well as to your own.
– Try not to invent information or circumstances that are not described in your role.
– You may make reasonable inferences, e.g.,
o a company has more than one customer
o people in the same company or industry may need to deal with each other again
in the future
o it is sometimes possible to make a case for an exception to company policy
– Try to look at things through the eyes of your role, even if it seems at odds with your
own personal thinking.
MEET U.S.