What does the acronym BATNA refer to, and why is it important to being a successful negotiator?
The term BATNA refers to the concept in negotiation theory of the best alternative to a negotiated agreement being taken in the event an agreement is not agreed on. BATNA specifically defines the resistance point that any party in the negotiation in a party decide to leave the negotiation and pursue other options.
Having a BATNA-based strategy in place is an excellent negotiation strategy is it alleviates the need to accept aspects of a deal that is not acceptable to one side or the other of a negotiation. To make this more concrete, consider the case of a person negotiating to buy a used car from a friend. From Kelly Blue Book and other secondary sources of car valuations, the friends' care is worth $5,000. The buyer decides that given the wear and tear on the car, and knowledge of the current drivers' driving habits, the car is actually worth $4,000. BATNA would then be the $4,000 that the buyer would specifically have in mind when negotiating. If the buyer did not get the car for $4,000 there would be an impasse in negotiations. It is critical for any negotiator to have a BATNA in mind before ever beginning a negotiation so there is a limit to what they will pay for the good, service or resource.
Assume that you have the following decision making options:(1) make the decision on your own with available information, (2) consult others before making a decision, and (3) call a meeting and reach a consensus, seeking to arrive at a final decision everyone can agree on. Which approach would you use to make the following decision and why?
You are the project leader for Casino Night on campus, a charitable event organized by your group to raise money for the homeless. The event was a big success, garnering a net profit of $3,500. Before the event your team researched nearby organizations that support the homeless and to whom the money could be given. You narrowed the choices to the "Chunk of Coal House" and "St. Mary's Soup Kitchen." Eventually your group decided that the funds be given to Chunk of Coal. You are about to write a check to its director when you read in the local newspaper that the Chunk of Coal House has terminated operations. What should you do with the money?
First and foremost there is the ethical consideration if the Casino Night was promoted expressly to support the Chunk of Coal House, and as a result those students who were motivated to contribute the $3,500 were thinking they were helping this charity specifically. Clearly the director of Chunk of Coal, if not transparent about the termination of operations, needs to meet with the entire team and explain what is going on with the philanthropic organization, No other option is really available for this first step of decision making. A team member must be called to understand why the local papers are reporting operations are ceasing yet no word came from the director. Ethics need to be the primary concern on this first issue.
Secondly, if it is discovered that Chunk of Coal is in fact no longer operating, the most transparent approach to resolving this situation is to poll the student body, explaining what has happened and asking for them to vote for the top three charities in local community that the donated funds should go to. This is ethically fair and highly transparent in that it provides a clear and highly visible resolution to this ethical dilemma. The need for being overtly focused on making sure the entire community knows what is going on with the funds is critical.
Third, after the vote has been offered and taken of the student body, the $3,500 needs to be specifically turned over to the director of the nonprofit organization that the student body votes for. The critical aspect of these three steps is making sure there isn't any potential for ethical conflicts or even the appearance of unethical use of the collected funds from the student body. Asking them to vote for which nonprofit organization they want their donated funds to go to once the news of Chuck of Coal being closed also removes any potential for conflict of interest on the part of any member of the organizing committee for the Casino Night.
Ultimately what is critical is that Chuck of Coal's true status must first be ascertained, and once found out, and then there must be total transparency to the student body as to what is happening with the donations. it's much better to work towards transparency, high ethical standards, and honesty in how this situation is handled to make sure the funds end up with a nonprofit organization that can use them, and that the students also see that the Casino Night organizers are striving to resolve the conflicting news on Chunk of Coal. At a minimum, the Casino Night organizers need to require Chuck of Coal to definitely state what their status is, and be accountable for how the significant sum of $3,500 will be used to keep the charity solvent if that is the strategy defined. As everyone made significant sacrifices to ensure Casino Nights' success and given the potential for the appearance of conflict of interest for Chuck of Coal,…