Negotiation is a crucial aspect of our daily lives, as we frequently engage in conversations aimed at resolving disagreements or achieving a desired outcome. It is a process that involves two or more parties attempting to reach an agreement through communication and compromise.
Negotiations can be emotionally charged and can evoke a range of sentiments such as frustration, disappointment, anxiety, suspicion, optimism, relief or resentment depending on the context and the individuals involved.
That is exactly how the 5 sessions of the negotiation course led by professors Koos Vos and Jeroen Van Zoggel were. Throughout the course, participants were paired against each other, group or individual, and were supposed to negotiate their way towards “Deal” or “No Deal”. Sometimes competitive and other times collaborative, students mainly learned two types of negotiations:
Distributive negotiation (Win/Lose) is a competitive style of negotiation where the parties involved are trying to maximize their gains at the expense of the other party.
Integrative negotiation (Win/Win) is a collaborative style of negotiation where both parties work together to create value and maximize their joint benefits.
Furthermore, the success of a negotiation often depends on each party’s power to influence the other and their ability to identify their Best Alternative to a Negotiated Agreement (BATNA) and the Zone of Possible Agreement (ZOPA).
BATNA, or Best Alternative to a Negotiated Agreement, is the course of action a party will take if a negotiation fails to produce an agreement. Understanding your BATNA is essential because it provides a benchmark for evaluating the potential outcomes of a negotiation. A party with a strong BATNA has more power in the negotiation because they have more leverage to walk away from the negotiation and pursue other options. In contrast, a party with a weak BATNA has less power in the negotiation because they have fewer alternatives and may be more willing to accept a suboptimal agreement.
How to use BATNA to your advantage?
Identify and evaluate your options before entering the negotiation.
Consider your alternatives and determine their value and feasibility.
Also assess the other party’s BATNA and try to identify areas of overlap or divergence. By doing so, you can use your BATNA to strengthen your negotiating position and achieve a more favorable outcome.
On the other hand, ZOPA, or Zone of Possible Agreement, refers to the range of outcomes that are acceptable to both parties. The ZOPA is the area in which the parties can reach an agreement that benefits both sides. A negotiator’s goal is to find a solution that falls within the ZOPA and maximizes the value for both parties. If the ZOPA is narrow, the negotiation may be more challenging because there is less room for compromise. If the ZOPA is broad, the parties are more likely to find a solution that meets their needs.
How to use ZOPA to your advantage?
Identify the other party’s interests and preferences.
Look for areas of overlap or mutual benefit and try to expand the ZOPA by finding creative solutions or creating additional value.
Also try to build rapport and trust with the other party, which can help to increase the size of the ZOPA and improve the likelihood of a successful negotiation.
In conclusion, the power of BATNA and ZOPA in negotiations is undeniable. Understanding your BATNA and that of the other party’s can help you to assess your options and identify areas of leverage. Identifying the ZOPA and finding ways to expand it can help to create a mutually beneficial agreement that meets the needs of both parties. By using these tools effectively, negotiators can improve their negotiating position and achieve more favorable outcomes.
Written by
Bhavya Swaroop
Participant of International MBA, class of 2023
About Bhavya
A curious mind, critical thinker and a driven individual, Bhavya Swaroop is currently pursuing an International MBA. She graduated with a Bachelor's degree in English Literature in 2016. She has worked in a market research company where she was in charge of sales, content and constant innovation of a Spanish platform for customers. She has a keen interest in sustainable businesses and is looking forward to creating, leading and promoting sustainability initiatives. In her free time, she loves to go out and discover new places and experiences in Barcelona, read fiction and work on her novel.
Feel free to contact Bhavya with any questions regarding the International MBA: bswaroop@eada.net
