Free Best Alternative To A Negotiated Agreement Essay Example
There are numerous situations in life where strong negotiation and persuasion skills can be of great help In Jack’s case, for example, we can identify several key aspects that may greatly benefit from his apparently above average negotiation skills. He thought that he would not only benefit from a raise but would most likely have a need for it—because after all the size of his family is about to increase over the next couple of months. He was able to foresee what he and his family would need in the future and thanks to his foresight, he was able see that at his then present salary, he would not be able to provide for everything that his family needs.
In this case, the main stakeholder would be Jack. However, the list of stakeholders in this situation would most likely include his wife and his would-be children as well. Jack’s present dilemma is that he cannot find any person who wants to buy his used sports car. Specifically, he wants to sell his sports car for a price of $19,000. The good thing is that there were already a few people who responded to his sales advertisement but the best offer he currently has requires him to let go of his car not for the price he initially set but for $1000 less which is $18,000. A Best Alternative to a Negotiated Agreement or BATNA can be defined as “the course of action that will be taken by a part engaged in negotiations if the talks fail and no agreement can be reached” .
What is the best course of action that Jack must pick or must have picked? Firstly, when trying to sell something, the seller must set an initial price for the merchandise that he is trying to sell (i.e. his sports car) considerably higher than his target price. In this example, his target price appears to be $19,000 for his sports car. If he really wants to be able to close a future negotiation at that price, he should have not set the initial price at his last price point. It should have been way higher than that. For example, he could have set it to $28,500 which is 50% more than his initial price. Of course, people who are looking to buy a used sports car would find that offer to pricey and so they will try to negotiate for a lower price.
When that happens, Jack may not be able to sell his car for the hypothetical $28,500 price that we set but there is a greater chance that he would be able to sell his used sports car for $19,000 or even more than that depending on how aggressive he wants his pricing strategy to be. In any case, this course of action is not available anymore because he already posted the initial price. So, the best deal that he can have would be $18,000 deal. However, he can still negotiate for something higher than that price offer but the chances of it going above the $19,000 line would most likely be low, if at all possible.
Another alternative action, if Jack cannot really be satisfied with a price range of $18,000 to $19,000 would be reposting the advertisement for his sports car for a different price, using the strategy that we explained above. After all, in order to get the best alternative deal in a negotiation, the person has to make a lot of preparations . And in most cases, those preparations, fused with superb BATNA and persuasion skills, can make a lot of difference . The same principles can, in fact, be applied by Jack in the future if in case he wants to negotiate an even higher level of salary increase from his employer.
Investopedia. (2015). Best Alternative to a Negotiated Agreement. Investopedia.
Nebenzahl, D. (2006). Your BATNA determines your worth. Price George Citizen.
Rich, C. (2011). Successful Negotiation is 80% preparation: How to get more of what you want by preparing properly. Strategic Direaction, 3-5.