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CS Professional · Arbitration, Mediation and Conciliation · Negotiation Skills and Communication

Rohit Pharma and a distributor, Gupta Agencies, negotiate over unpaid dues. Rohit's best alternative if talks fail is a lawsuit likely to recover about ₹8 lakh net of cost after three years. Gupta offers ₹9 lakh payable in instalments over six months, with security. Considering the negotiation concept of BATNA, how should Rohit reason?

Rohit should compare the offer with his BATNA. The lawsuit alternative yields about ₹8 lakh net after three years, while the offer gives ₹9 lakh, secured and sooner, so the offer beats the BATNA and acceptance is rational.

  1. AReject, because a BATNA must always be exceeded by double the amount
  2. BAccept only if the offer equals the full claim
  3. CIgnore the BATNA, since it matters only to the mediator
  4. DCompare the offer to the ₹8 lakh BATNA; the offer is better, so Rohit should be inclined to accept itCorrect

Explanation

BATNA is the best alternative to a negotiated agreement and serves as the benchmark for a reasonable deal. An offer better than the BATNA, here ₹9 lakh secured and sooner against ₹8 lakh net after three years, is worth accepting. No rule requires doubling or full claim recovery, and BATNA is for each party's own decision.

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