RouterNinja's Dojo

A stroll down the path of Nerdlighenment.

Best Alternative To Negotiation Agreement

Company A, for example, makes a US$20 million takeover bid to Company B. Nevertheless, Company B thinks they are worth $30 million in valuation. Company B quickly declined the offer. However, what Company B has not taken into account is increasing competition in the sector and stricter rules, all of which will limit growth in the coming year and reduce its valuation. If Company B had taken the time to include these factors in the current assessment and had clearly followed the four batna steps, including #2, assessing the alternative to staying the course in a challenging business environment, management could have been persuaded to accept it. At the same time, you determine your BATNA, you should also consider alternatives on the other side. Sometimes they may be too optimistic about their options. The more you know about your options, the better you`ll be willing to negotiate. They will be able to develop a more realistic view of results and reasonable offers. Guy Burgess and Heidi Burgess have slightly adapted the BATNA concept to emphasize what they call “EATNAs” – popular alternatives to a negotiated agreement” instead of “better alternatives.” Although the parties to the dispute do not have good options outside of negotiations, they often think they do. (For example, both sides believe that they can impose themselves in court or in the military struggle, even if some of them are significantly weaker or if the relative forces are so balanced that the outcome is very uncertain.) But the decision whether or not to accept an agreement depends on perception.

If a contestant thinks he or she has a better option, she will follow this option very often, even if she is not as good as she thinks. The appeal of EATNA often leads to a failure of last-minute negotiations, especially when many parties are involved. Disputes can negotiate for months or even years and ultimately develop an agreement that they deem acceptable to all. But at the end of the day, all parties must carefully consider the final result and decide: “Is this better than all my alternatives?” Only if all parties say “yes” can the agreement be reached.

December 4, 2020 - Posted by | Uncategorized

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