Monday, 1 July 2013

[ADR] BATNA, WATNA, ZOPA in negotiation

Importance of BATNA, WATNA, ZOPA in Negotiation

"BATNA": Best alternative to negotiated agreement
"WATNA": Worst alternative to negotiated agreement
"ZOPA": Zone of potential agreement

It is important that a successful negotiator identifies BATNA, WATNA and ZOPA.

Firstly, BATNA and WATNA have great relevance and is one of the determinate factors of a party's bargaining power. A party with a BATNA or BATNAs are more capable of positional bargaining and make less favourable proposals to parties that have no or unsound BATNA(s). The source of one party's confidence usually comes from having a BATNA because they can at least work away out of the negotiation without having to lose all the opportunity cost.

Secondly, ZOPA is also a factor that needs to be identified by a successful party. By identifying ZOPA, the parties are happy to negotiate the terms that are within that area and hence reduce time and costs related to the dispute resolution.

There are at least two ways to identify ZOPA.
1) a party can assess the outcome values and costs of termination to other party and;
2) manage other party's impressions and perceptions

1 comment:

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