The principle-agent model

In theory the principal-agent model is bilateral but in real life the agents is sometimes faced with a set of dilemmas. One of the main dilemmas that come about is when an agent is motivated to benefit only one of the sides or himself rather than acting on behalf of both principals or is unable to benefit any principle at all. One situation in which I acted as the agent to a multi-principle is this semester where I’m acting as a project director for a team of consultants for an RSO I’m involved in called the American Marketing Association. My team’s job is to gather research on how companies use Instagram to promote themselves in order to achieve higher followers and to advice Busey Bank on how to manage their Instagram account. My job as a project director is to hold weekly meetings with my team in order view their progress and to update them on what work needs to be done while also reporting such progress to the president of the organization. Once the presidents has reviewed our internal progress and approved our work I am too contact a representative of Busey Bank to offer our advice.

            The work my team and myself produce has to be precise and professional, and I am required to keep an optimistic and friendly environment within the team in order to maximize their efforts. It has been said multiple times that people are more willing to do something efficiently and right if they like what they do, so I allowed each member of the team to choose what topics they could research within our project to encourage them to work hard on their part. Though that promoted internal efficiency I am required to achieve our main goal, which is to keep our client happy by providing them with precise advice.

            The first issue that came about after our first meeting with our client (which included my team, the president, and myself) was that the president and some of the members of my team held different perspectives on what the client wanted from my team. The president wanted us to come up with advice on how to manage an Instagram account as efficiently as possible with a deep analysis on how other companies utilize social networks, while some of the team members thought that we needed to explain why Instagram is better than other social networks with less emphasis on analyzing other companies; a perspective that was incorrect since I had messaged the client and I had received the same interpretation as the president had.

            As the agent between the president and my team, I was put in a difficult situation because I had to keep internal peace within my team while making some of my team members understand that their perspective was inaccurate. It wasn’t easy making those specific individuals understand the actual scope of the project specially due to the fact that many people get defensive when they are told they are wrong. After sitting down with those members and openly communicating with them that the client specifically asked for certain steps to bet taken, and that both the president and myself had the same interpretation those individuals were swayed to take my stance. Though maybe not the best way to get my point across, I did use some of my authority and threatened to cut of the members that weren’t cooperating to our interpretation of the project. Using my authority in that way could have gone bad and may have resulted in unwanted tension, but they did not take it to heart and decided to fallow my lead.

            If the two principals don’t see eye to eye, the best thing to do is to realize what the issue is, communicate with those who hold opposing viewpoints and analyze the situation in order to resolve it. For example, the issue with my team was that some of the members misinterpreted what our job actually was. Once proper communication was achieved everyone agreed to the same terms and things began to get done. There probably was other ways to resolve the tension; I could have offered the members that weren’t fully cooperating to join another project since they were doing more harm than help when they went on their stint of doing their own work.

            In my case, I could have failed by just satisfying one principle while ignoring the others. For example, had I worked just to please my team I would have failed the ultimate goal of our project and the client would have gotten irrelevant advice. On the other hand, if I had worked to just please the client and the president without bringing internal peace within my team, I would have created tension that would have led to inefficient work. Overall, what accounts for a good performance by an agent is his ability to get the job done while having everyone on the same terms. Being able to accomplish that feat maximizes efficiency since each member is more willing to communicate without tension.