That we get the best management education in IIMA would be an understatement of understatements, but it would be interesting to know that some of the best management lessons we learnt during our time in PGPX did not come from the faculty, but from a few legends in IIMA known for altogether different roles. One wonders if the teachings by the professors somehow got leaked from classrooms and were imbibed by these fellas. This ‘Decision Sheet’ talks about some of them, in no particular order of relevance.
- Yello – Principal-Agent Problem
Wikipedia defines Principal Agent issue as a problem that exists in circumstances where agents are motivated to act in their own best interests, which are contrary to those of their principals. This theory is perhaps the most common in various courses, covered in OB, FAM, LAB, SMGT, SHRM, LS, and CG to name a few. While each of the prof teaching these courses come up their own examples to explain the concept, we get to experience it right under their nose at this café situated at the CIIE premises – Yello.
The two employees of Yello, the agents, are employed to run the café to the best of their abilities, bringing in revenue for the owners and satisfaction to the paying customers. But what happens in real life is quite opposite to the expectations. Both the agents are paid a monthly fixed salary and are least bothered about the patrons, running the café based on their whims and fancies. Some of the most common dialogs heard at this café are:
We: “2 cup chai dena.” They: “Kam se kam 20 min lagega.”
We: “2 cup chai dena.” They: “Doodh khatam ho gaya hai, chai aur coffee nahi milega.”
We: “2 cup chai dena.” They: “Time lagega, baithna ho toh baitho nahi toh baad me aao.”
We: “Snack item me kya hai?” They: “Kuch bhi nahi hai”
We: “Snack item me kya hai?” They: “Cheese Chilly Toast hai par time lagega, kam se kam adha ghanta”
We: “Snack item me kya hai?” They: “Bun Maska… tha par khatam ho gaya”
We: “Snack item me kya hai?” They: “Sab kuch hai magar time lagega, main akela admi hu abhi.”
We: “Bhaiya PayTM kar du?” They: “PayTM nahi lete, cash do ya card se pay karo”
We: “Bhaiya PayTM kyu nahi lete?” They: “PayTM nahi lete”
We: “Bhaiya par aap PayTM kyu nahi lete?” They: “PayTM nahi lete”
We: “Arey par kyu?” They: “PayTM nahi lete”
Mr. Principal, are you listening?
- Bhavesh bhai – Organization Behaviour, Key Account Management, Business Relationships and Networking
Bhavesh bhai has been the saviour of most PGPXers trying to finish their assignments or project submissions on time, by just being there to provide a cup of hot coffee or a plate of hot Maggi noodles at the oddest time of the night, all with a beaming smile and a never tired face. He welcomes you with the same energy at 10 pm as he would at 3 am when zombies walk in to his Nescafé hut with bloodshot eyes, demanding coffee to be injected into their veins. It’s not that we don’t get food at other places in the campus at late nights, but the sheer warmth that Bhavesh bhai brings in giving that simple paper cup filled with coffee flavoured nectar is unmatched.
The zombie PGPXers become humans again after a few sips/bytes of coffee/Maggi, and return to their hellholes called syndi rooms. In this zombie-human transformation though, quite a few times people forget to pay the bills, forget to bring their wallets or mobiles, or simply do not care enough to make the payment. And yet, Bhavesh bhai remains unperturbed, knowing these chaps are lost in their own worlds of balance sheets, five forces, and IS-LM curves, and would come to senses tomorrow or day after. If someone has not paid him by mistake, they will pay him when they come to the café the next time. If someone has not paid him on purpose, they would still eventually pay up out of guilt because these hapless souls have nowhere else to go other than him at 3 am in the morning. Through both hot and rainy nights, through balance sheets and decision sheets, through thick and thin, Bhavesh bhai remains our true companion for the night.
- Maids/Fruit seller/Vegetable vendor – Concept of Oligopoly and Monopoly
Those who are staying in the MSH apartments would be particularly aware with this concept applicable directly in their daily living. Unlike outside campus wherever we get umpteen options to buy our vegetables, fruits or even utilize the services of maids, inside the campus we are restricted to an oligopoly of 4 or 5 maids and the monopoly of the vegetable seller and the fruit vendor.
The solitary vegetable seller comes to MSH every night at 9 pm only to sell all his leftovers, at almost double the market price. The fruit seller lady doesn’t leave a chance to command highest price possible. Since most of the residents in MSH do not have a vehicle to quickly go out and buy vegetables and fruits, both these monopolists have an entire ‘blue ocean’ up for grabs.
Coming to oligopoly, the maids have formed an implicit ‘cartel’ to not charge a rate below what they have pre-decided, colluding with each other to not encroach upon each other’s territories, and consistently providing bad quality of work, leaving the hapless spouses (or the jobless MBA candidates who have opted for MSH but stay alone) alone to do most of household chores.
You don’t need any other reason to conclude why monopolies and oligopolies are bad for consumers.
This article has been written by Swapnil Bhandarkar, PGPX Co 2018