Triangle Model

In real life, principal-agent model is more like a triangle than bilateral and I can think of one example that I was involved in a triangle. Currently, I am working as an consultant/intern at the consulting company and there are project director(representative of the consulting firm), 2 program managers, and the client for the project. Each of them have different interests, goals, and thinkings toward their works and I thought that this example might be a good one to explain any problem in a triangle-form principal-agent model. 
For project director, his goal would be manage that project is going well without any problem and result has to be perfect. Since the director gives consulting project presentation to the head of the client, program director will need project to be errorless, in time, accurate, and critical. Therefore, our team worked very hard (we reduced sleep and worked) to meet the deadline and make a perfect result. Because of his goal, team managers and interns have some complaints and thus have some negative effects. For 2 program managers, their goals are producing perfect and successful consulting project results in order to receive high benefits such as salary and fame. Because their benefits depend on the team's success, he would manage how team works, how project is going, and how to guide to bring a successful result. Because there are two program managers and they want to gain favor with one's superior, it is inevitable to create a competitive environment. Because of that, interns in each team would have to work very hard to make better and more successful outcome than another team. The last one would be our client, one of logistics company in Korea. They wanted us to conduct a business consulting on strategies to enter the U.S. market and get helpful consulting without spending too much money of efforts. Each of them have different goals and it is very hard to adjust and accomplish the result that everyone would favor. 
We have been working on this project for a month and I think we made a lot of progress. Our team had to make strategies on supply chain management and some new technologies to apply in logistics.  Since it was a new topic for all of us and we did not know the current status of any information about the client, we asked for RFI to make a complete proposal to begin the project. If we do not know what they transport, where to transport, what kind of technologies or systems they use, we had a hard time to even begin research of write a project scope. However, because company was too busy on what they are working and they had a lot of departments to go through to get complete RFI, we were not able to get RFI for 3 weeks. Company might thought that what they are doing is more important and consulting project by students are not so important. I do not know the reason behind a long time for RFI to come to us, but we were very desperate to get RFI to properly begin the research. Our project director tried to reach the client to get RFI but he failed to receive it in advance. But he wanted to start the project to successfully make some outcomes at the end of the month, he told our project manager to just begin research on 'logistics' and 'SCM'. It is important to learn about logistics and SCM but it was tremendous amount of research, but program director checked what we researched on, he said many of them are useless for the project. Our program manager was worried and anxious about the project because we could not work on the project well for a long time. After 3 weeks, we finally got RFI and could complete the project scope and research on what we should do.
I think there could have been some ways to resolve this problem. If program director made a video call arrangement, it would have not taken so long. Also, if people communicated to find out the sole goal and purpose of the project, we might have had a better outcome. I hope that this project goes well and make a successful outcome at the end.

Comments

  1. Professor ArvanNovember 22, 2019 at 2:09 PM

    After reading this I'm unsure where the triangle actually is. Also, I didn't see how the paragraph where you described the project manager's motives connected to the paragraph where you talked about the RFI. So I'm going to try to retell your story, and see if this makes sense.

    Why would a for-profit company seek consulting from students, who are inexperienced as consultants instead of going to a well-known consulting company? One possible answer is that the company is small, doesn't have a lot of revenue at its disposal, so needs inexpensive consulting. Another possible answer is that even if it can afford to pay a well-known company, the type of work it has in mind is more for benchmarking than for implementation, perhaps to compare with some in-house plans that have already been developed. I'm sure there are still other reasons.

    In the second case, it may be that the company decides to go ahead with the in-house plans before the consulting has completed the work. At this point, they'll ignore the consultant, who no longer is providing value to them because they've made their decision already.

    I don't know if this is exactly what happened but it sounds like something along these lines did occur. If so, it is unfortunate for the consulting team you were on, but I'm not seeing this as illustration of the triangle problem.

    ReplyDelete
    Replies
    1. Simon Kuznets Econ 490 fall 2019December 2, 2019 at 7:38 PM

      The reason why this company is requesting a business consulting to us is that one of our consulting team's executives father is this company's president. So I think they requested to just try because there would be no harm even if they try it. Also, we have some successful work experiences and I think we are approved and credible. So that would be another reason they seek consulting from us.

      Delete

Post a Comment

Popular posts from this blog

Gift Exchange

After reading three articles, I think all three articles are trying to explain and demonstrate that every people are caring towards each other. But when there is an increase in competition(demand) and decrease in supply, one tends to think in one's shoes and try to satisfy one's own desires. Human being's nature is to protect oneself and earn benefit by caring and helping out others. I found all three articles interesting and I could relate various concepts such as altruism and fairness in articles to my experiences. Altruism by definition is the unselfish acts to better the well-being of others disregarding the well-being of self. Altruism, gift exchange is voluntary act because people do not expect anything in return but do a favor for others. One of experiences that I could relate to altruism is my experience with TACS team. TACS (Tax Advisors for Champaign Society) is a volunteer team which helps people to report taxes. TACS is the registered student organization with...
Read more

Illinibucks

If the Campus gave out each student an allocation of "Illinibucks" which could be used for sole purpose of moving to the head of the line, there would be various benefits and problems at the same time. University has many systems that are priority basis or first-come-first-serve basis. I think both basis have different pros and cons, but I like priority basis better when it comes to academic areas. People might complain about things that are based on priority, but it definitely has some good sides and if Illinibucks beome a thing, many people would think the same way I think. There are a lot of classes to choose and take in U of I and people value every classes differently. As a Statistics major, at the time of registration, I want to register specific stat courses that I want to learn about. Also, there are some courses that are interesting to me or some gen-eds that I am required to take. Usually, registration is based on priority basis: grade, honors, and major. Usually,...
Read more

Opportunism

'Opportunistic' means the taking of opportunities as and when they arise, regardless of planning or principle. As I grow older and older, I learned that there are sometimes whether you should be an opportunist or visionary. Usually I choose to be an opportunist when opportunity comes up to me. I think opportunity doesn't always come when I want and it might never come when I don't grab it. However, there were some moments that I didn't take opportunity even though I had a chance. To come to college and adjust to college life, there were visionary decisions I made. It was a time to decide which college I should apply and which to attend among accepted colleges. I was still undecided which college I should apply as early decision or early action. I had to be careful and cautious because if you get accepted to college applied as early decision, you must attend that school no matter what. So if there is a college that I am desperate to attend, I should apply as early ...
Read more