society – Kevin Low

Talking to bosses

In my career-coaching, I often encounter cases of communication challenges from employees or staff especially in conveying messages or ideas to the bosses. Part of the problem is probably culture and the strange imbalance of power with bosses, particularly in larger organisations. There is a lot more filtering of information with complex intentions:

Staff might be trying to simplify things for bosses in order to get information across fast but end up obscuring some information
Staff may also be trying to manage their bosses’ perception of them and hence try to be focused on delivering more good news than bad
Information might be mixed with remarks incorporated for bootlicking purposes

All of these we learnt through a combination of poor workplace culture, bad upbringing with parents hiding lots of different things here and there. There are much better ways to be able to bring truth to the table without having to flinch at the expected responses.

Highlight the context and the objectives of the company or project, and gain affirmation first
Bring up how the objectives are not being met
Define the problem clearly and how it connects to the objectives not being met
Provide some options; each of which justified either by expert or external opinions, past experience from the team and other parties
Request for a decision to be made

If the boss sits on the decision and don’t make it; you may need to be more persistent in highlighting the issue. Then you can start bringing the consequences and laying alongside the costs of the options so that doing nothing would clearly be more costly.

This approach is also useful for sales but perhaps that’s for another day.

Coercion of Free Markets

Inequality is a market failure. We do pick this up in A Levels but then there’s little discourse on that. Not only do we dwell little on the solutions – which ranges from progressive taxation to welfare handouts – we ultimately ignore how inequality undermines the ultimate roles of markets, which is the efficient allocation of resources. I’ve always grasp the idea rather intuitively but then fail to deliver it in a philosophical and economics framework. I’ve pointed out the lack of philosophical musings in today’s study of Economics when I introduced Michael Sandel’s lecture on Markets and Morals.

I’ve always pose the question to my Economics student, if a person earns $1000 a month and another who earns $1 a month both needs a glass of water. The rich guy is willing to pay $10 for the water while the poor one is willing to pay $1. The market thus allocates the water to the rich man. We all know that this allocation is problematic and it doesn’t seem efficient; how is it that, in terms of willingness to pay, a person who is only willing to part with 1% of his monthly income gets the good when another is willing to part with 100% of his monthly income for it? So what exactly is the problem of inequality?

Once again, Michael Sandel points this out in the second lecture presented in this video. You don’t exactly have to watch the lecture in order to grasp the point but the idea is that when inequality (in terms of unequal distribution of income) exists, effective demand cannot properly reflect the ideal sort of demand signal transmission that would allow the market to allocate resources efficiently. In extreme cases, free markets becomes not entirely free. In other words, people are not transacting out of their free will but coerced by their own economic circumstances. We see this very often in the case of poor people in developing countries who are forced to sell organs, resort to prostitution, act as surrogate mothers, become a runner for crack.

Gary Becker is not wrong about the rationality of these people. They’re making rational choices but it is often that their choices is very much limited. That unfeeling market processes coerce us into certain decisions is something close to the hearts of all of us. Often, however, we can’t quite work out what is so unjust about that because we believe that to a large extent, we determine our riches. Somehow, deep in our hearts we know that some other decisions that we made caused us to be in the state we are in such that we are coerced into making that next decision. The fact that this argument comes back to us shows how each and every decision made in the marketplace by us are not independent. This makes for a determinism argument in a market setting where free will is supposed to reign.

There are much wider implications of all these arguments and I shall explore them if I get the chance.

Blended Value

Just when people are lambasting financial institutions and entities like hedge funds, Jed Emerson who coined the concept of ‘Blended Value‘, suggests that these financial entities can play a positive social role. Fast Company had an interview with him about this in 60 seconds.

As reported on Economist Online, Jed thinks that hedge funds which focuses on fundamentals mirrors sustainably investing, meaning that they would act to move capital to places where they are used properly and for good of the society.

Trading according to rigorous fundamental research can often mirror sustainable investing, which seeks to profit by taking into account social and environmental factors, he says. Fundamental hedge funds are far more likely than other investors to try to identify a firm’s off-balance-sheet exposures, of which a growing proportion may be “environmental or social liabilities present in a market or company but not explicitly accounted for in traditional numeric valuation or mainstream investor analysis”.

He makes an important point about ‘Shorting’, which The Economist goes on to discuss. As a matter of fact, the market is kind of biased towards growth and that should be the case since the economy is usually growing but then if people are not rational enough to sell, then there has to be short-sellers who are rational enough to sell but don’t have the shares in the first place. This way, buying and selling would reflect a more fundamental value. This is of course, an ideal – prices hardly reflect any reality in moments. But at least we know that the bulls and the bears are almost right the same number of times (half of the time each; which reflects dynamism of the market). And so there’s no way we should have anything against them.

Monopoly on Monopoly

Intellectual Property is becoming an important area of contention that needs to be closely studied by lawyers, economists and governments around the world. Every IP case have deep implications for the general welfare of the society (for important innovations and inventions), the meaning of property and the ways laws can protect them. From Free Exchange Blog at The Economist, I learnt the story of Ralph Anspach’s battle against Parker Brothers, the owners of the world famous Monopoly game.

Professor Ralph invented Anti-Monopoly, a game much like the Monopoly with its principles somewhat reversed where in its original version, players start off with monopolies and try to get to the free market state. In the latest version of the game, players get to choose to be either free-marketters or monopolist. In any case, he spent a lifetime battling Parker Brothers and researching the origins of the true, original Monopoly game (and how the capitalists were indeed true to the principles of the game).

Governments have to engage in design of laws that allows for Intellectual Property rights to be enforced but in a way that allows further innovation so that there are incentives to make improvements to existing innovations or discover mash-ups that utilizes stuff under IP protection. Economists have to consider the balancing of these incentives and how different ways of enforcing IP laws would alter the innovation patterns of the environments governed. Joseph Stiglitz happened to pen some of his musings on this issue on Project Syndicate.

It is interesting to note, as the Free Exchange Blog entry mentioned, that board games are countercyclical products. This is true for comfort foods as well, ranging from chocolates, candies to lollipops and other treats for those with a sweet tooth as mentioned in the recent Fortune Magazine.