When should you walk away in negotiation? That’s a common question that negotiation experts pose of professional negotiators. We are typically advised to walk away from the bargaining table when we haven’t been able to get a better deal than we can get elsewhere. But in intercultural negotiation, particularly in international negotiation in certain countries other than the United States, there may be another factor to consider: whether you are legally obligated to stay at the table.
The BATNA (best alternative to a negotiated agreement) concept, popularized by Roger Fisher, William Ury, and Bruce Patton in their book Getting to Yes (Penguin Books, second edition, 1991), has been disseminated all over the world and doubtless helped thousands avoid settling for less than what they want in negotiations. Fisher, Ury, and Patton described BATNA as the path you’ll follow do if you don’t reach agreement in your current negotiation.
When you have identified your BATNA, you can compare it to the offers you receive, turn down subpar offers, and exercise your BATNA instead. Knowledge of your BATNA will help you avoid accepting a worse outcome than you could get elsewhere, and it will also keep you from rejecting an agreement that’s better than your BATNA. When renegotiating a deal with a supplier, for example, you will be in a better bargaining position if you have a strong offer from one of their competitors.
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BATNA in Intercultural Negotiation
We tend to assume that the BATNA concept translates equally well across cultures. But in a 2017 article published in the Berkeley Business Law Journal, Facultad Libre de Derecho de Monterrey, Mexico professor Gregory J. Marsden and University of Michigan professor George J. Siedel argue that in some nations, resorting to your BATNA could get you into legal hot water if you’re not careful.
Why? Because the BATNA concept was developed in a common-law country, the United States, where courts rely heavily on precedents. By comparison, most other nations have a civil-law system that relies more on statutes and codes. In common-law countries, including the United States, parties are expected to understand that they face the risk of not reaching agreement. If you decide not to accept a deal and turn to your BATNA, typically there’s no harm, no foul.
By contrast, in civil-law countries, laws often prohibit negotiators from walking away from a negotiation without just cause after talks have progressed to a certain point, such as when a party has reason to believe a contract is imminent, write Marsden and Siedel. The nature and extent of this obligation differ from one country to the next.
While negotiators in a common-law country need only consider their own interests when deciding whether to abandon talks in favor of their BATNA, those in a civil-law country may have a duty to also consider their current counterpart’s interests before breaking off a negotiation. A 2004 analysis prepared by the International Association of Young Lawyers concluded that in many European countries, if the abandoned party can prove that a contract appeared to be forthcoming, the departing party can be required to compensate him or her for damages and certain expenses. Failure to do so could result in intercultural conflict between negotiating counterparts and even a lawsuit.
Preparing for Intercultural Negotiation
This doesn’t mean that you and your organization aren’t allowed to turn to a better deal when negotiating in civil-law countries. Rather, it means fine-tuning your diplomacy and negotiation skills to the intercultural negotiation. Specifically, before negotiating, you might consider stipulating in writing that you reserve the right to break off talks during the process, keeping in mind that you could still be liable for doing so in certain situations. Moreover, there may be circumstances in common-law nations such as the United States where you would be bound to an agreement that hasn’t yet been finalized.
Above all, this risk highlights that your international negotiation strategies may need to be different from those you use at home. In particular, it can be smart to consult with experienced contract lawyers in the nations where you are doing business before you negotiate to ensure that you know when and how you can resort to your BATNA—and consult with a lawyer again before you declare an impasse.
What other adaptations do you make when preparing for an intercultural negotiation?
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