The Value of “Values”- ?A Financial Angle :Dearth to Death

It was coffee-break and as a people observer my mind can’t take a break. I was able to listen to a very serious negotiation call which was going on next to my desk in cafeteria. I had no other option in one way other than listening to it fully as it was so intense that I have to go for one more coffee. In the process of observing the participants and listening one thing was very certain for me that there was one thing which was missing in both the parties involved in negotiation. I was pondering more and more on this what could be that one factor which led to such an intense negotiation after addressing the basic rational fact is “Lack of Trust “on each other. Party 1 believes that the other one has still huge margins and risk of cheating the other and same with Party 2 who seems to be the buyer. I was relating to the situation where this “lack of trust-margin” led to the emergence of “ Middle Men” Industry  where both the parties shell out more money to the middle men rather than passing the benefit to the producer of the product /service and the direct receiver of the same product/service. The other way of looking at it is this lack of trust leads to compensating effect where one tends to patch up for losses made in one area by one person by repeating/doing the same act in other area or similar situation .At the end if we really calculate it its net loss for both the direct parties involved and middle men and unrelated group extract profit/benefit out of it.

Let me try to demonstrate this with an example. Let’s take the perception about individual house contractors among the buyers. The buyers always have the mentality the contractors cheat in materials, quotation, labour, quality etc. and the buyer always wanted to have a check on every action he/she does. The contractor on the other side would have experienced buyers most of the times stopping the last payment quoting dissatisfaction .Hence both the parties engage with each other with lack of trust . The contractor keeping in mind that anyway these buyers would demand more at the end of the project would like to keep considerable buffer in his quote to mitigate the risk. The buyer assuming the contractor is going to cheat on material, quality, labour is going to squeeze as much as possible and in this process the other stake holders like material suppliers, labor suppliers, and middle men all assume this “lack of trust” margin involved in any transaction and try to squeeze a maximum share out of it.This is a danger zone where beyond the margin for actual value transfer there seems to an unnecessary unwanted margin which is increasing as middle men and other stake holders try to benefit out of this.

I would like to express this by the following simple economic equation:

1. a) Total Actual Cost + (Perceived Value of customer = Margin 1) = Total Buying Price
2. b) Total Actual Cost + (Perceived Value of customer = Margin 1) + Lack of Trust Margin = Total Buying Price

On a larger picture it is this “Lack of Trust Margin “made India come under the colonial rule still independence in 1947 in one way. If we convert economic equation to a relationship equation again it is because of this “Lack of Trust Margin” relationships break out of middlemen involvement where value of one is not transferred to the other in the right way.

It’s very important that as humans we understand certain human values like “Trust”, “Faith “ has lot of financial value too attached in this competitive world and if we don’t capitalise or understand this the core benefit of producer value  and receiver value shall be exploited by middle men which shall lead to “ Corruption”  . Let’s be aware that it is this self /induced corruption in Human Values leads to Corruption in Monetary Value which the world /countries are debating every day.

Let’s not take the “Dearth of these Human Values Today to a State of Death of Human Values tomorrow”