Pre-planning and establishing negotiation options allow a negotiating team to weigh alternatives and seek win-win outcomes during deliberations. Today, in both developed and developing economies, a BATNA (Best Alternative to a Negotiated Agreement) and a ZOPA (Zone of Possible Agreement) are seen as essential for successful negotiation outcomes.
Similarly, in the complex world of negotiations, seasoned negotiators stress the need also to have a position for the worst alternative to a negotiated agreement. In negotiations, the worst alternative to a negotiated agreement is simply known as the WATNA.
A WATNA is most effective during negotiations that involve high uncertainty. As Sharthak Mishra rightly pointed out, WATNA is “one of several paths that one can follow if a resolution cannot be reached.”
To the UN Commission for Economic and Social Commission, the WATNA epitomizes one tactic to be adopted during challenging and complex negotiations.
Gennaro Cuofano notes the WATNA represents the worst-case scenario if negotiation fails. In other words, all possible alternative courses of action were exhausted. To him, “it is important that the WATNA is determined before the negotiations to avoid agreeing to a sub-optimal deal.”
In the book Principles of Negotiation, Guasco and Robinson posited, “Sometimes, the deal on the table is acceptable because it is less bad than a WATNA, i.e., one is minimizing potential loss or gaining the best out of a difficult situation.”
According to Jim Hornickel, “Planning for the worst-case scenario during negotiation preparations has a particular benefit: It may prompt the team to evaluate their bottom line and plan for the worst-case scenario.
Svetlana Sergeyeva, suggested that the WATNA “may be used where all possibilities of negotiations are exhausted and when parties negotiate the worst option of the outcome, they look at the subject of negotiations from a different angle. Thus, if one offers the worst outcome option, the second party may hesitate and agree to compromise, which will benefit the offering party.”
A six-year research* into director-level perceptions of various aspects of supply chain management by PanAvest International investigated director-level perceptions of negotiations in the supply and value chain management environment.
The purposive study*, entitled “director level perceptivities on aspects of negotiations,” drew on a sample of approximately 64 international organisations, including Fortune 1000, FSTE 250, and JSE 100 companies, as well as state-owned enterprises and government departments. The study involved various CEOs, CFOs, COOs, directors, and officers from engineering, marketing, logistics, supply chain management, project management, procurement, and related industries.
Examining an array of issues relating to negotiations, bargaining, agreements, and contracts, the study revealed that in Africa*, approximately:-
- 2% of public sector lead negotiators were familiar with the term WATNA
- 16% of private sector procurement practitioners were familiar with the process to follow to determine WATNA.
- 1% of developmental project negotiations involved the pre-establishment of a WATNA
Could the lack of appreciation for WATNA be among the reasons African negotiators would instead take a deal than walk away from unfavourable transactions?
Gennaro Cuofano (2022) explains the core differences between WATNAs and BATNAs:
“A WATNA is the worst result a party could achieve if it ended negotiations, while a BATNA is the best result a party could achieve with the same action. The WATNA may cause one party to look at their predicament differently and compromise on a deal to avoid risks.” These are usually risks related to legal action, a loss of business, reputational damage, and “even bankruptcy.” He stressed.
In summary, negotiators entering negotiations without pre-planning and clearly understanding their BATNA, ZOPA, or WATNA will most likely get short-changed. A WATNA:
- gives a negotiator confidence during negotiations.
- enables agreeing to disagree when the going gets tough.
- provides another helpful benchmark against which an offer can be evaluated.
- outlines the worst-case scenario for either party if a negotiation process fails.
- gives the negotiator a platform to accept an agreement that, while not ideal, is better than the worst probable outcome.
- encourages uncertain negotiators to cut losses and move on.
To conclude, a carefully planned WATNA allows a team to be ready for the worst potential outcome, be prepared to walk away from a deal, and prepare for the consequences of the abandonment. Like a BATNA and ZOPA, having a clear understanding of your WATNA gives a negotiation team an alternative to compare against other options during challenging and complex negotiations.
Professor Douglas Boateng is an international chartered director and Africa’s first-ever appointed Professor Extraordinaire for Industrialisation and Supply Chain Governance. He is the CEO of PanAvest International and the founding non-executive chair of MY-future YOUR-Future and OUR-Future (“MYO”) and the highly popular daily Nyansakasa series. He is currently the non-executive chair of the Minerals Income and Investment Fund (MIIF). Professor Boateng was previously the non-executive chair of the Public Procurement Authority (PPA). For more information on Nyansakasa, visit www.myoglobal.org.