Question

Question 3

You were recently hired by Champion Trading Pte Ltd (“CT”), a company which is based in Singapore and well-known in the trading business. Although your office is in Singapore, your responsibilities include business development initiatives in China.

On your first day of work, John (the Head of Department) told you that job titles and the level of seniority are very important aspects in China. Hence, the job title of “General Manager” is assigned to you, so as to facilitate your business development work in China. Your name cards also state your job title as “General Manager”.

However, internally, your pay grade and level of seniority is equivalent to that of a senior executive. Hence, John reminded you that you must always seek his approval, including entering into any work-related transactions that are above $5,000.

Your first project in China is to source for a new supplier of engine parts which CT could subsequently import into Singapore for its trading business.

(a) Identify and describe the agency relationship in the above scenario.


(b) Discuss and analyse two (2) possible authorities which you, as the General Manager, may possess in the above scenario where you have been tasked to source for a new supplier in China. Support your analysis with specific examples, based on the above scenario.

(c) Briefly explain one (1) key duty of an agent, based on the scenario above. Support your discussion with one (1) relevant example.

Answer 1

I am hired for the Champion Trading Pte Ltd (“CT”) based in Singapore and well-known in the trading business. I have the responsibility of business development initiatives in China. The John is the Head of Department. Here in china, the job titles and the level of seniority are very important aspects. I have been assigned the title of General Manager and the level of seniority is equivalent to that of a senior executive. Any work-related transaction which above $5,000 needed approval from the head of department.

The project of mine in china is to source for a new supplier of engine parts which CT could subsequently import into Singapore for its trading business.

(a) Here the type of relationship is Buyer’s Broker. This means that the Buyer's representative or listing agent. Here the source of new supplier of engine parts which CT could subsequently import into Singapore for its trading business is required. Hence, I need suppliers to the business. Here the suppliers are the person who is responsible for the supply of engine parts to the company and I represent the broker in between company and supplier.

(b) As a General Manager, I may possess two possible authority in the above scenario where I have been tasked to source for a new supplier in China are as follows:

1. Negotiator
2. Coordinator

General manager works as a negotiator as in the above scenario. He acts as the middle man between company and the suppliers. He has to source the suppliers so when the supplier he chooses he need to negotiate with them for the material which the company needs and the prices of that material.

He works as the coordinator as he itself sources the suppliers for the company hence there should be proper communication for every single piece of information. It would make the system transparent.

(c) One key duty of an agent, based on the scenario above is avoid conflict between his personal interests and those of the principal. General manager is working as an agent here. He is allocated the certain work with the company and here he has the specific responsibility that Any work-related transaction which above $5,000 needed approval from the head of department. So, if the personal interest in between agent and business comes he may able to forget the duties he need to follow. This situation creates the conflict between principal and agents.

For example, The General manager of the company may source the supplier which take any transactions below $ 5000 which benefits the General manager itself. This may happen when the manager is not transparent with the company work.