The Principal Agent Problem

I have not had the opportunity to witness this principal-agent model too much because the jobs that I worked at never really had any of these issues worth talking about regardless of the lack of exposure to this issue I have witnessed this a couple of years ago when I visited my uncle in Scotland and worked part time at his amusement park. This park was divided in two parts; one part was filled with animals you could look at and even feed some and the other half was filled with a track for ATVs and some slides that little kids could go through. The main issue that took place there was with people complaining that the staff was being rude to them for not letting them either pet all of the animals or ride the ATVs faster than what the limit was set on them. These measures were set in place as a safety measure for everyone and the managers understood that the staff was just doing their jobs and took our side most often although in front of the customer they would side with them to show them that they cared. Although this relationship worked for many years one summer when I was working at the park there was an incident that happened. There was a change in managers over that summer and some of them wanted to start to make the rules less restrictive because they believe that those safety measures deterred a lot of people away from coming to the park but a group of the old managers still supported the old rules put in place. Well within two weeks there began to be a lot of confusion amongst the staff regarding what to do. One of the new rules was to make the ATVs less restricted and faster. That was a main issue for a lot of the staff because we realized that doing that would mean it becoming less safe for the visitors so no one really did anything with that until one day when one of the new managers went down to the ATV area and told us to take off the restrictions because the park was losing money since people wanted the ATVs to go faster. That day a kid came to go on the ATVs and although we instructed him to go slow at first in order to get a feel for the ATV and only after a while to ramp up the speed. Well he started alright but quickly panicked and instead of hitting the break he accidently hit the acceleration throttle making him accelerate off of the track and into a creek that was nearby. He ended up with a broken arm, broken leg, and some broken ribs. A helicopter had to come pick him up and take him to the hospital because the injuries were that serious. This incident caused a lot of stress for everyone working there because they didn’t know what to do and what to say when the parents threatened to sue the place for being unsafe for children. We were in trouble because we followed the orders of one of the managers but the written rules were still the same as before in regards to the restrictions of the ATVs. Gladly the other managers realized what had happened and the lack of communication that was going on lead to a life threatening incident. The manager that decided to change the rules without going through the process was quickly terminated and the park paid the family for the lawsuit. In this case the staff was also disciplined because it was also our fault for listening to one of the managers without receiving a physical change of rules or being briefed by everyone beforehand. Personally after this incident and all of the stress it has put me through I learned to always question things and to make sure that before I make a change to something that it is alright with everyone else as well and before I take orders that involve big changes such as this to make sure that I am protected by following these changes by seeing something written or being instructed to do so by a collective of managers.