An Assignment Submitted by
BATNA and ZOPA are two different components of strategy of reaching an agreement in negotiations. BATNA (Best Alternative to a Negotiated Agreement) refers to an alternative course of action that one of the parties undertakes after the main course of action fails and the agreement cannot be reached as a result of it. BATNA must be based on an elaborate and considered option alternative to the main course of action that was primary in the negotiations. Typically, BATNA is the worst alternative method of resolving the conflicting interests of the two parties that may be accepted in the negotiations process (Gulliver, 1979).
ZOPA (Zone of Possible Agreement) describes an intellectual space comprising all the agreements that can be reached by both of the parties without losing their interests. Within the ZOPA the agreement for two parties is possible. Outside this zone the agreement cannot be reached due to the failure of interests of one or another party. In order to determine the ZOPA it is essential for both of the parties to determine the interests and values of each other (Morris & Gelfand, 2004). Once the ZOPA is discovered there develops a high possibility of reaching an agreement.
It is important to differentiate between the ZOPA and the settlement zone. These two terms are often confused although their meaning is different. The settlement zone refers to a total of all of the points that overlap between the two parties participating in the negotiations. In other words, some of the interests of the parties are common, others are not, and the common interests specifically form the settlement zone. If the interest points of the two parties do not overlap, their interests contravene each other and move separately, and the agreement cannot be reached. In a typical situation, where there is no overlap of interests no agreement can potentially be reached irrespective of how many negotiating effort was applied.
In the process of settlement a conflict of interests during the negotiations it is very important that every party has the so-called superior information about the other party. What should be essential to know is the very product or service that the other party produces, the market at which it operates, the resources it controls, the range of interests, and the economic conditions that are established in the sector within which the party works. This information can be in most cases learned from the Internet resources and archives, and can be worth millions of dollars if applied in a right way for the conflicting party (Nolan-Haley, 2001).
A scenario that offers a BATNA and ZOPA for both of the parties may be the following. For example, a person wants to buy a shop for $30 000. Alternatively, they have found another shop whose owner is selling it for $5000 less. This buyer will be the first party in the negotiations. So, for this party the BATNA is “buying another shop for $25 000” and in terms of the mentioned deal this is equivalent to “buying this shop for $30 000”.
The second party, the seller, is moving to another country for permanent residence; however this fact is not revealed to the first party. He has to sell the shop immediately and wants $20 000 for it, but if they can bargain for a higher price with the first party it would be the best possible option.
The ZOPA for the abovementioned negotiation is $20 000 to $30 000. Any deal within this price range can be possible. Another interesting fact is that the ZOPA usually stands as an instrument for reflection of the value that has been created in the deal: in this case it is worth $10 000.
References
Gulliver, P.H. (1979). Disputes and Negotiation: A Cross Culture Perspective. New York: Academic Press. p. 287.
Morris, M.W., and Michele J. Gelfand (2004). "Cultural Differences and Cognitive Dynamics: Expanding the Cognitive Perspective on Negotiation". In Gelfand, M.J.and J. M. Brett. The Handbook of Negotiation and Culture. Stanford University Press. pp. 45–70
Nolan-Haley, J.M. (2001). Alternative Dispute Resolution in a Nutshell. Thomson West. pp. 39–50.
