In a perfect world, the principal-agent model is bilateral,
but in the real world, things aren’t quite as simple. A situation in which I acted as an agent to
multiple principals is when I held the position of Vice President of Recruitment
for my sorority. In the sorority world,
the VP of Recruitment acts as a bridge between both their sorority and the
Panhellenic Council, a governing body to all of the sororities on campus. The VP of Recruitment is in charge of
communicating with both entities in order to ensure that fall formal
recruitment is successful.
Sorority recruitment is a very technical process in which
everything from food to outfits to decorations and logistics must be planned to a
tee. Each sorority chapter has their own
ideas, however, they are responsible for abiding by the bylaws that the
Panhellenic Council sets. One of such
“rules” is that a house may not spend more than $2000 during the fall semester
on decorations for recruitment. Each
chapter must also provide documentation that they have not surpassed this
amount. In this situation, I would describe the Panhellenic Council as the "regulator" and the individual sorority chapter as the "client."
The position of VP of Recruitment puts an individual in a
difficult situation. She wants the best
for her chapter and wants to maximize its recruitment results, but she also
wants to be a devoted member of the Panhellenic community. Throughout the semester preceding fall
recruitment, the VPs of Recruitment from each house meet up formally every
month in an attempt to make the recruitment environment between chapters less
competitive, and in turn, friendlier.
This unbalanced dynamic makes for an awkward situation. Oftentimes, a VP’s loyalties lie with her
chapter, and she is unwilling to share ideas or contribute to recruitment
conversations with other VPs of Recruitment.
This presents a problem for the agent.
The principals in this situation have different goals. The individual sorority chapters want to
maximize their own recruitment results, while the Panhellenic Council wants to create
a friendlier, unified Greek community.
I don’t see an immediate and easy solution to this issue, since there will always be some level of competition in the recruitment world. Competition between chapters makes it
difficult for VPs of Recruitment to value their commitment to the Panhellenic
Council over their chapter. By not
contributing to conversations with others at these recruitment meetings, the
agent satisfies one principal, but not the other. It seems that in this case, rather than the
model being an equilateral triangle, with each principal having equal input,
the situation is an isosceles triangle, in which the sorority chapter has more
input than the Panhellenic Council.
There is also another layer to this executive board
position. Since my sorority is a
national organization, I also had to answer to my sorority’s national
council. I met with and phone
conferenced many members of our national team in order to ensure that they were
happy with our efforts and that I was upholding my sorority’s national values. This principal entity's goals closely align with those of my chapter, and therefore, they are easier to please than the principal that is the
Panhellenic Council.
In any situation in which two or more parties are involved
in conjunction with asymmetric information, it will be difficult for the agent
to successfully perform his or her duties.
This can be in an organization, such as the example I mentioned, or through
a work situation, as was mentioned in the prompt. This principal-agent dilemma can also be applied to the internship that I mentioned in an earlier post. Throughout my internship, I answered to multiple supervisors, who each had a different view of what they wanted the final output of the volatility report to look like. In this situation, there was a more equal balance between the principals, since their goals, producing a successful report, were the same, and therefore, it was easier to please all parties involved.
I will react to this piece on a few different levels.
ReplyDeleteFirst, what does maximize recruitment mean? Are there some students you go after (is pledges the right term?) that you really want to get and other students you recruit who are okay but not quite as desirable? Or is it simply a matter of filling the available slots? The first would make it kind of like college admissions at an elite university. The second would be more like selling tickets for a concert, where the price is already stamped on the ticket.
Second, if your remember our Medical Intern Matching model, the preferences of the students being recruited should matter too. Are there some sororities that are just perceived as being better? Or are they just different and some students prefer sorority alpha while other students prefer sorority beta?
Third, I imagine that the entire sorority gets involved in recruitment in some one. Could you elaborate on what the vp job does that is different from what other members of the sorority do for recruitment?
One other thing you might clear up for me is whether the dues owed are different from one sorority to the next. Is that also regulated by the Panhellenic Council? Since I'm ignorant about this, how does one distinguish normal furnishings for the sorority from decorations specifically aimed at recruitment?
Finally, you might talk about the moral hazard of non-vp members of the sorority in recruitment. What "cheating" might they engage in. If the vp's job is stop the cheating, I can see that not being fun at all. But if the members really don't want to cheat and just want to do the best they can under the rules, maybe it is not as much of a triangle as you make it out to be.
In terms of "maximizing results," I suppose I should have explained myself more thoroughly. In this sense, I believe that results are maximized when a new member (we don't use the word pledge because it has been associated with a negative connotation in the past) fits in well with our organization and when new member retention is high. So, this means that there are few girls who receive a bid and then do not accept or they accept and then choose not to continue within a week of acceptance. Maximizing results would be similar to the the college admissions example, and not the concert tickets situation.
DeleteMany people have preferences as to which sororities are "better," however, recruitment is usually more of a choice in which students choose on their own. Not everyone desires to be in sorority x, and preferences play a big role in selection. Recruitment is very similar to the medical matching program, and it's interesting that you brought that up.
Per our national council, all active members are required to participate in sorority recruitment. I like to equate sorority recruitment to planning a wedding. The VP of Recruitment is both the bride and the wedding planner, and she chooses everything from logistics, timing, food, outfits, decor and so on, while the active members are the wedding party. They participate in the wedding, but allow the wedding planner/bride to run the show. Because recruitment is an affair with multiple events (four rounds of recruitment spanning over five days), it is as if the VP of Recruitment is planning multiple weddings; all have different timing, decor, outfits and logistics, but the VP must make sure that everything runs smoothly.
In terms of dues, they vary from one sorority to the next and are dependent on the sorority's national organization. The budget allotted during recruitment comes from a sorority's national organization, however, it is regulated by the Panhellenic Council to create a sense of fairness/a level playing field. That being said, a chapter wouldn't be able to spend more money just because it has more funds nationally than another chapter on campus. Sorority recruitment decorations normally come in the form of ribbons, paper, streamers, pictures and so on, and they normally aren't actual furnishings that are kept once recruitment is over.
Moral hazard is definitely present in recruitment. Active sorority members may send in fake excuses (such as a doctors appointment, family emergency, etc.) in order to avoid participating in the recruitment process. In order to avoid this, proper documentation must be submitted in a timely manner to insure that one isn't making an excuse up. Many people willingly participate in recruitment, however, there are always a few individuals that try to get out of it.