Principal Agent


 Sorry didn't mean for this to be late, my apologies I have been caught up with other stuff. 

I worked at an Indian restaurant back in high school around a few years back. Now this was my first job, so I was not particularly good at it. This may not be a professional setting, but the principal-agent model is still there. So I would be the agent, and my manager and the customers would be the two principals. I honestly got orders mixed up at different tables quite a few times as I felt really frantic to try and get the orders out and was just in a general a bit of mess there. Granted I was 16, but the customers do deserve a good service. I am not sure what exactly happened, but my manager pulled me aside and talked to me about how he noticed from observation that I was not exactly performing well. I was failing to properly appease the customer in my duties and apparently I wasn't being friendly as I thought as. I do think I wasn't trying very much as I was I think about other things going in my life such as college applications and things of the sort. I was essentially told that if I wanted to keep working there that I needed to pick up the slack and do my job properly. 
I did want to keep it, so going forward after that talk I did try and focus my concentration and I think I performed better. I made sure to do a better job being friendly and keeping a better track of the orders and just in general giving it my best. 

Regardless I was still cut a few weeks later as my performance apparently just wasn't good enough. I believe I was let go to due more adept and trained workers coming in and I was not essentially needed any more. To answer the question in the prompt, yes, I do think the agent might fail if he aims to please one party over another. I think in a sense that I did satisfy the customers (one of the masters) while not satisfying my manager. The customers enjoyed my service for them, but I simply could not get manager to. So maybe the two principals didn't agree as to what they would define as a good performance. I think the best way to resolve the tension is proper communication at all levels between the principals and agents. This group dynamic is different from that in a proper workplace, but if any customers thought I did a really good job they could potentially communicate that to my manager.

            To transition a bit in a more professional manner, my brother works at consulting firm in New York City. So, on a weekly basis or so, he meets with clients with and then also his team and higher ups such as project managers and the likes of that. I am not sure if I can say I know all the events witnessed from afar as I mostly learned about this through talking with him. So, if the clients specifically like his performance within they can also relay that to the project manager or a higher up. The project manager may potentially not like what he does but he would maybe resolve the tension by offering guidance to improve his performance as to his expectations. But it might potentially be better to please the clients versus another master as it could prove to be beneficial to everyone. I think more often than not though, the agent has to choose to satisfy one master over the other as not everyone has the same expectations and it is impossible to please everybody. 

Comments

  1. Professor ArvanDecember 12, 2019 at 5:24 AM

    The first story about being a waiter, it would have helped to talk some about your pay. What fraction was wages and what fraction was tips. Also, it might help to consider output from your manager's point of view. If you confuse an order and have to get a new order for the customers, then they are at the restaurant longer. If the restaurant is full at certain times of the day, the manager should have a preference for having the table turn over frequently, so more customers are serviced in a given period (say three hours) per table. The waiter should want that too, if it means more tip income. However, if customers feel rushed or the service is slipshod, then rapid turnover might not produce more tips overall.

    So, the manager should want happy customers, but not want them to linger (unless they ordered extravagant items that are quite pricey). The customers may not care about the lingering part or may actually want it, because conversation over a meal is a pleasant thing. If the restaurant is not full, the two principals have preferences that are aligned. But if the restaurant is full, there is some opposition to these preferences. That needed to come out in your discussion.

    It was okay to stick with that first example and not briefly throw in the other one about your brother. But you needed to push that first example more to get at the economics of the triangle situation.

    ReplyDelete
    Replies
    1. Paul MilgromDecember 12, 2019 at 1:30 PM

      Yeah that is true, I should have mentioned the situational differences in having a full restaurant versus an empty one, and how preferences change for both. When the restaurant was busy the manager seemed to be more frustrated which makes sense.

      Delete

Post a Comment

Popular posts from this blog

Group Dynamics

In the movie "The Social Network", director David Fincher explore the origins of the social media company Facebook, at Harvard and chronicles the early years of the company. Co founders, Mark Zuckerberg and Eduardo Saverin seem to be good friends and have a good professional relationship starting out. They start off with Eduardo giving Mark a $1000 dollars so that he can make the initial site titled "Thefacebook". It starts off at just a few top tier universities, limited to just college students. Their site proves to be pretty popular, as it's being talked around campuses quite a bit. They later meet with the co-founder of Napster, Sean Parker, giving them some advice on how to expand their company and have a greater reach beyond universities. Saverin has a bit of disdain about Parker, and objects to many of the business decisions that he was making for the company. For example they accepted $500,000 from the investor Peter Thiel (who is also the founde
Read more
Image
Description: \ Paul Milgrom is an economist who has been instrumental in a lot of economic theories that are widely used today. Dr. Milgrom is the Shirley and Leonard Ely (a fellowship that he is a part of) professor in Stanford's department of economics and teaches humanities and science. He has numerous degrees from Univ ersity of Michigan, Stanford. His work is quite important as he researched and made quite a few contributions to game theory. I read up on the some of the work he did and it is quite relevant to the course. He applied his previous search of game theory to the research of organizations. He utilized several methods to describe about how manufacturing has evolved over time and how they can be more efficient. I did not know Dr. Milgrom at all before I was assigned this alias but after researching I understand now how important he is to the field of economics.
Read more

Punishment

I believe that punishments can have their place here or there, but I often find that people take these a little too far sometimes. From what I recall, the president of my fraternity reprimanded our vice president of finance for losing track on some of our funds that we had allocated for our formal dance that was upcoming. The person in authority did appear to be a little hostile towards the member while disciplining them. The president had raised a voice quite a bit and was practically yelling. The receiving member just stood there, quite unsure of what to say in the moment and seemingly not wanting to make the other person more upset by talking.  They did show how the problem was to be fixed though, just in an angry demeanor. The president frequently described it as unacceptable and unbecoming of him and things of the sort. I thought his words were a little harsh, and did not accept the way he was taking care of the problem. It definitely was not the most productive way to han
Read more