Aetna (Estimated Alternative To Negotiated Agreement)


BATNA is often not seen by negotiators as a safety net, but as a lever in negotiations. Although a negotiator`s alternative options are theoretically easy to evaluate, the effort to understand the alternative of a party`s BATNA is often not invested. Options must be real and feasible to be of value,[5][third-party source needed], but without investment in time, options that fail any of these criteria are often included. [6] [Citation needed] Most managers overestimate their BATNA while not investing enough time in researching their real options. [Third-party source required] This can lead to bad or wrong decisions and negotiations. Negotiators should also be aware of the other negotiator`s BATNA and determine how it compares to what they offer. [7] [Page required] For example, Company A is offering a $20 million takeover offer to Company B. However, Company B estimates that they are worth 30 million $US in valuation. Company B quickly refused the offer. However, what Company B did not take into account was the increasing competition in the sector and stricter rules that will limit growth in the coming years and reduce valuation.

If B had taken the time to incorporate these factors into the current assessment and had clearly gone through BATNA`s four stages, including the #2, to assess the alternative of being able to travel in a challenging business environment, management could have been persuaded to accept it. The parties can adapt the BATN to any situation requiring negotiations, from discussions on wage increases to the resolution of more complex situations such as mergers. BATNs are essential to negotiations because a party cannot make an informed decision about whether or not to accept an agreement unless it understands its alternatives. While a BATNA is not always easy to identify, Harvard researchers have outlined several steps to clarify the process: Fisher and Ury offer a job search as a fundamental example of determining a BATNA. If you don`t receive an attractive job offer from Company X by the end of the month, what will you do? Inventing options is the first step in determining your BATNA. .