Friday, November 6, 2015

Principal Agent

This topic made me think for a long time.  I am still a little bit confused about what this scenario means in practical terms, but I feel as though I am beginning to figure it all out.  A situation in which this happens all the time is in my own family.  My aunt is an interior designer, and my uncle is a contractor.  They are married and they have been running a successful business for over twenty years.  There success and overall impact on my life are truly incredible, but I am going to stick to the example.

Every time my aunt and uncle start to remodel, build or completely reconstruct a house, there is always going to be one huge problem during the process.  That problem is taste.  There is always disagreements between my uncle and my aunt on preferences about what should go where.  But there is also always tension between the client and my aunt. 

This is a principal agent scenario because of the conflict coming from both angles to my aunt.  She is receiving two completely different viewpoints and that also goes along with how she views the situation.  It is inspiring how well she can manage everyone’s different ideas and turn it all into one final idea that always turns out to be amazing. 

The way in which the problems gets resolved is crazy.  My aunt will always go through the design process first on her own to see what ideas pop into her head.  She likes to do this because of her idea that she is usually correct.  Obviously that is a very biased viewpoint, but in the end it usually is true.  My aunt will then go through the process with the client.  While doing this, she will not give any of her ideas that she came up with when she did the process.  She wants the client to see everything through their own eyes.  I love that my aunt is able to do this because it really does not let her taste conflict with the clients taste and that is very important to her clients.

My aunt will then go through the process with my uncle.  This time, she will totally listen to my uncle, but she does not shy away from giving her own opinions.  She will call out my uncle when she believes that he is wrong.  The last step in this process is when my aunt sits down with the client and my uncle.  They all talk about their ideas and usually in this one, hour long, meeting they are able to decide on how the design for that particular project is going to look. 

There are so many things that they need to think about.  Cost, material and placement are only a few of the conflicts that are resolved in this meeting, but they always are resolved.  There are obviously a few ways for these conflicts to get resolved.  In the end, if the client is very adamant about how they want the design to look, my aunt and uncle must oblige and allow them to do what they want.  That resolution obviously completely ignores what my aunt and uncle want, but in some cases, that is just how the cards are dealt. 


In the end, as long as the client ends up happy, so are my aunt and uncle.  They always want to make their jobs perfect, but sometimes their version of perfect is not the exact same version of perfect as their clients.  My aunt’s ability to compromise is amazing because she is able to put away her own personal views, to suit what the client really wants.  This is a really hard task for a lot of people to do because lots of the time, people let their own ego’s get in the way when they really should be focusing on pleasing the customer.

2 comments:

  1. Did your aunt and uncle work in the same business (she exclusively used his contractor services and he didn't work for other interior designers) or were they in separate business that often did business together? This matters on the question of what they argued about and how things got decided. Of course, it is also more complicated because they were married and probably couldn't keep business separate from family life.

    It is also the case that initial disagreement happens normally based on people's prior held views, which may not be consistent with one another. If people are willing to modify their views based on what they learn about the situation and if then the views are in alignment, that is not so much of a triangle. The triangle happens when the views remain inconsistent and the agent then feels that one principal must be betrayed to satisfy the other one. So it is unclear in your story whether this happens on occasion with your aunt and uncle. It sounded like for the most part alignment is ultimately achieved.

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  2. I forgot to state that they only worked together. My aunt would only work with my uncle in terms of contracting jobs. There would be times in which she would be hired solely for a design consultation and in that case, my uncle was not needed because it had nothing to do with building or replacing the structure of the clients home.

    You are correct. Most of the time alignment is achieved. There were times in which my aunt and uncle and their clients would disagree and in those cases, their was still alignment because my aunt and uncle had to allow their clients to do what they wanted to do even if that meant going against their own personal views.

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