Organizational Conflict

We can always find brokers in our daily life. When you buy something as a consumer, you may negotiate with a broker to reduce the price and costs. When you are an employer, the broker you employed needs to guarantee your interests. However, these two aspects are always in a conflict. So it is rather difficult for a broker to handle the relationship between the two and solve the conflict. 

In a simple model, the board of directors will hire brokers, and those professional brokers should be responsible for the interests of the board of directors and guarantee the smooth operation of the subsidiary enterprises. And this is a simple model of entrusted agents. As a good professional broker, one needs to consider the demand of the market so as to develop the enterprise. An enterprise can ensure its development and interests only through meeting the market demand, that is to say, meeting the demand of consumers. For consumers, saving the cost, choosing high cost performance and satisfying their desire are the basic appeal, which, sometimes, may go against the demand of the board of directors. So the work of brokers contributes greatly to the success of an enterprise. 

A recent example impressed me most. Luo Yonghao, a former English teacher in China, began to engage in the business of mobile phones. He released the first mobile phone t1 in May this year and achieved a big success. He mentioned such a conflict in the launch event of his mobile phones. He believed that an aesthetically outstanding mobile phone should not change desktop wallpaper, and that placing the photos of his wife and kid on the desktop was an aesthetic mistake. Meanwhile, he also held that mobile phones with 800w pixel were more mature in imaging technology than those with 1300w pixel. However, forced by the market demand, the mobile phones launched this time adopted 1300w pixel and their desktop wallpaper was also changeable. He expressed that once his enterprise grew big enough, he would be loyal to his own idea, because he believed that the aesthetical standard and user experience of the public should be guided by the elite. I quite agree with this idea, and believe this is one of the marvelous measures of a broker. We have been consistently guided by Apple since its birth. In contrast, HTC and Samsung have never surpassed the position of Apple even though they directly target for the market. An enterprise can be called successful if it is able to satisfy the needs of its users, but it can be called great only when it is able to guide the consumers. 

Let’s see another example in my daily life. I have a good friend in Nanjing and his family runs a snacks factory. When he was a child, the factory had an accident and caught fire, but their insurance company didn’t want to shoulder the responsibility. Judging from the characteristics of China’s insurance, there is inducement and soil for insurance companies to infringe the rights and interests of insurance consumers. For instance, insurance products are very complex, the insurance market has information asymmetry, and the status of the two sides are not equal. Relative to the insurance company, insurance consumers are at a weak position. At this time, a professional broker should act on behalf of the spirit of contract, and solve problems in accordance with the contract. They shouldn’t seek profits by taking advantage of consumers’ weakness. Such behaviors will only bring negative effects to the insurance industry, and do harm to the reputation and development of the enterprise or even the whole industry in the long run. 

efficiency and fairness

New York Times reported a hypothetical case: when two men did equal work, how to let the one that had occupied more benefits share the benefits. The article points out “the same labor, the same salary” and I agree this idea. This indicates that the author also agrees with the basic principle of more pay for more work. But when such two men cooperate with each other and accordingly get more benefit than that when they work separately, things change and unequal distribution appears. This topic leads me to think more about efficiency and fairness. 

First of all, the benefits distributor in this experiment is a machine. Naturally, I will wonder how to distribute benefits in a team in real life. And firstly, I think of contracts. Contracts decide the proportion of the benefits each person gets in distribution. If so, on the premise of contracts, the rich should get more payment. This is because he took an upper hand when entering into the contracts. Maybe he commands more key resources (such as funds, technology, more favorable chances). This time, if the rich is willing to share more benefits with the fellow men or society, this will be a moral question --- contract allocation, I believe, is fundamental. Secondly, the government has exerted a considerable impact on redistribution, such as the universal health care by Obama in the last term, high welfare in Nordic countries and the heavy taxes for high-income earners. Someone would say such behaviors can be found only in experiments; how could redistribution exert a positive impact on economic growth? Besides, we also know that any measures against inequality taken by the governments will have a negative impact on the country's GDP. For example, don’t you think a generous aid to the poor will undermine their driving force for work? Don’t you think taxes for the rich will undermine their efforts to become wealthier? You are all right, but I believe that the driving force is not the only thing that matters. The resources are equally important. In a highly unequal society, many men are in short of resources. My uncle worked in China Post. Although they have government support but their performance is not as good as the private courier companies. This is exactly because private courier company offers an additional incentive policy for each delivery staff. Such distribution promotes efficiency but it loses equity. 

Before my high education, I received all of my education in China, where once a time there was absolute fairness. When I was a kid, in my textbooks, western capitalism was frequently criticized for intensifying social contradictions and enlarging the gap between the rich and poor. I deem that, in future society when there is great wealth, this problem may be solved. Maybe at that time, people will not satisfy their humane demands by materials. Only then can men have a equal status and income in its real sense. This society is somewhat similar to Switzerland nowadays. Therefore, I consider that it is better to pursue an equal chance than an equal benefit so that people may have better choices when concluding contracts. 

Future Income Risk

I’m a junior student majored in economics. I will be graduated within about one year. There are multiple employment possibilities after my graduation, and I may also continue my study as a graduate student. I know clearly that there are a lot I can do with to control my income risk in the future, and strict control over my own life decisions is an important means to guarantee my income and manage relevant risks. 

First of all, I believe that I will follow two main occupational directions in the future: to work for a bank or governmental department, or to become self employed or get engaged in my family business.

For the first situation, I have to admit that at the present stage, it’s essentially important for me to work hard on all the courses required by the college. While taking my economics courses, I’m spending as much time as possible in statistics, expecting to graduate with double degrees. Apparently, nowadays the society is moving forward rapidly, and the concept of BIG DATA has been widely accepted. In my opinion, statistics will become even more important in the future society. Most people will prefer data-based results in decision-making process. In addition to my learning at school, my resume is so competitive because of the social activities I attended and the internship experience I have got. I forced myself to do more practical and voluntary work in my vocations, which turns out to have enriched my working and social knowledge and made me more competitive when applying for a job and getting a stable salary. Take one of my cousins as an example. After he graduated as a major of CS from Syracuse University, he got employed by China Telecom. He has just worked for one year and the monthly pay is about $1，000, which can just support his daily life (it is a satisfactory income for graduates in China, though). But his post is quite stable, and he has very promising career prospect and very good welfares. For me, working for a bank or governmental department will be a choice. It means that I’m not allowed to commit any political mistake and I have to avoid those university associations related to as Falungong or Tibetan independence (People who work for Chinese government must receive personal background survey, which practically influences his career and post promotion.). I consider this as a risk too. 

As for the second situation, I will not have to be worried about my resume so that my learning can be more specifically oriented. If I want to become self employed in the future, it will be necessary for me to learn some basic knowledge about business starting. I also must understand the elementary composition of corporation, the control over cash flow, operation cost and profit. In that case, my income will be influenced by my personal quality and the macroeconomic environment, which is more demanding. On the one hand, I will have to learn harder to develop higher sense of responsibility in order to bear my duty. On the other hand, the macroeconomic environment becomes a critical risk factor for me in that case. Innumerable middle and small-sized enterprises were closed down under the attack of the financial crisis in 2008. Such risk is just beyond control. If I intend to get a position in my family business, I possibly have to pay more attention to learning from my parents and knowing how to handle and control interpersonal relationships. The factors influential on my income will be similar to those if I want to start my own business.   

Besides, many other factors, such as the stability of my parents’ income and my social human relations and position, will also be very helpful when I get employed. Neither I nor my family has debts or large loans. I’m in very good physical condition, except that I have congenital hepatopathy, which may worsen to serious disease if I drink or live in irregular pattern. In order to avoid such income risk, I must live in a regular pattern and stay away from alcohol. 

illinibucks

 I am a student in Professor Arvan's Econ 490 class, writing under an alias to protect my privacy, using the name of a famous economist Elinor Ostrom as part of my alias. 

As students, there are always someone who can not choose their favorite courses due to low Internet speed at the beginning of each semester; who are always snatched seats by outrageous people; students majoring economy can not find appropriate time for reserving tutors; who can not choose their favorite lawyers when dealing with tickets in legal office; who can only wait in line for long for billiards tables in union; who must order small office rooms through long term reservation in advance. As students, we are often forced into waiting list, and how can we solve this kind of problems? The answer is IlliniBucks, with which, we can free from waiting in line and find the resources we want rapidly, thus saving time.

I think the issuance of IlliniBucks must be limited. If the sales are unlimited, it will lose its practical effects under the circumstance of everyone owning IlliniBucks. And as the issuer of IlliniBucks, the school should issue equal amount of IlliniBucks to all students each year or each semester and the sales between students among be better prohibited. In general, students with better school achievements are encouraged in the old system of the school, where student who perform well in study can have the tight to select courses in priority, which I think is healthy. But if the sales of IlliniBucks by money are promoted in school, IlliniBucks will be the priority for wealthy students, leading to the transfer from study encouragement to wealthy encouragement, which is unhealthy measure. At the meantime, I think graduates should own the highest level of priority for selecting courses, which is even higher than the selection through IlliniBucks, for that only in this way, can graduates be guaranteed to select the courses they want most, avoiding the delay of graduation of graduates due to their failure in selecting courses.

The IlliniBucks is better to be reserved in i-card, with a certain amount each semester, which will be reset automatically in next semester with another time of issuance of certain amount. This measure can make students check the amount of IlliniBucks at the end of each semester and finish using all IlliniBucks before finishing of each semester. As a result, people will feel it is a waster to leave IlliniBucks so as to encourage the using of IlliniBucks. At the meantime, IllniBucks can also be used as a kind of care for vulnerable groups and award for students with extraordinary contributions, such as disabled students and core students in Basketball team.

It is inevitable for some problems arising as to IlliniBucks system, such as which one should be in priority of two who are both using IlliniBucks for selecting courses; the problem of comparison like auction arising in ordering courts by two people with IlliniBucks; someone will be forced to help seniors to occupy positions with IlliniBucks (there is the rule of obeying elders among Asian students) and so on.