Post #5- Illinibucks

One of the most exciting aspects of making the transition from high school to college, for students, is their ability to have exponentially more freedom in choosing what they would like to focus their studies on for four years. Often times, in high school, students are forced to take classes that do not fit their interests and this leads to a lack of motivation in said classes for said students. Many students are surprised by the fact that when they get to college they can't take the classes they want due to priority allocated to other students for a variety of reasons. Several reasons for why a student may have a higher priority for a certain class is because they are a James Scholar, an honor student, or the class is in their specific major at the time. This is just one example of a priority system at the University of Illinois that blocks certain students from following their desired educational path.

If the University were to implement a system of "Illinibucks", students would be able to allocate these Illinibucks to these priority systems in order to "jump ahead" of other students based on their desire for a variety of things such as selecting classes, purchasing books, and selecting preferred campus housing. Each of these priority systems would have a designated Illinibucks price for each item in the priority system based on demand. For example, to jump to the top of a priority list for registering for a high demand class, one would have to allocate a greater amount of Illinibucks in comparison to a class with low demand. 

Registering for classes is the easiest example to explain and therefore will be used to try and understand underlying issues that could result from using the Illinibucks system. Illinibucks would be used to jump to the top of the priority list for registering for a certain class, that would, presumably, allow the student, who chooses to use his Illinibucks for that class, to register earlier than the general population. This would ensure that they get a spot in the class, as well as allow them to choose their preferred time slot for that class. 

The biggest issue that could arise from this is too many students allocating their Illinibucks for the same class. This would lead to overcrowding at the top of the priority list, and therefore would negate the need for the Illinibucks in the first place. Another issue is that their could be too many people using Illinibucks to jump to the top of the priority list, and would block certain students, who didn't use their Illinibucks, but are trying to register for a class necessary for their major. This could cause significant inefficiencies in blocking students from graduating on time. One third issue with this is if a class is undervalued, in terms of the cost to jump to the top of priority with Illinibucks, too students will jump to the top of the priority list, completely negating the point of having the system in the first place.

In my personal experience, I would have used Illinibucks to get priority in registering for computer science classes, in order to complete a computer science minor. As an economics major, I had always seen the practicality of adding on a computer science minor in order to diversify my abilities for practical applications in my career path. But due to the demand for intro level computer science classes at this university, it was near impossible for me to get into those classes. In this case the Illinibucks would have been extremely useful in allowing me to pursue this minor, as I would have most likely allocated as many Illinibucks to getting into those courses as necessary.

Post #4- Team Structure

In the National Football League every coach has their own style of organizing their team. Many coaches are referred to as "player's coaches" meaning that they allow for significantly more player input, and put the needs of their players before their own. Others have a slightly more authoritarian approach towards organizing their team, and, for the most part, have complete control over the day-to-day operations of the team. Both styles of coaching have led to success. Both styles of coaching have led to utter failure. On the surface this may appear that the organizational structure has no significant impact on the success of the organization, but this does not factor in the many other aspects of the organization that determine whether that specific structure will work effectively. This is an example of how structure in organizations is often arbitrary, but can lead to success, or failure, depending on many other aspects of the organization such as field of work, characteristics of the subordinate labor force, characteristics of the organizational leadership, and many others. One experience that I had working in a successful team was an aquatics camp counselor for a summer camp at a beach on Lake Michigan, located just north of Chicago. We had such a successful summer that the following summer, enrollment in the camp nearly doubled, and reviews from campers, and parents, were extremely positive. 

The camp was a part of the park district in the town where the beach was located. The camp was 12 weeks long, with about 50-60 campers in the morning session, from 10-1230 am,  and 40-50 campers in the afternoon session, from 1-230 pm. The camp involved mainly aquatic activities such as kayaking, paddle boarding, and playing organized games on the rafts on the lake. There were 10 camp counselors, one assistant supervisor, and one supervisor. There were two counselors that worked together to supervise groups of roughly 10 campers.

The organizational structure of the camp most directly resembled the simple hierarchy model, with slight differences.  In the simple hierarchy model, the structure is described as a top-down, chain of command-like, organization. At this camp the supervisor was at the top, but the assistant supervisor was not directly under the supervisor. Most communication to the camp counselors, came directly from the supervisor, and any communication from the assistant supervisor was usually not because of direct orders from the supervisor. I provided a diagram below to better describe this structure. 

The team functioned well under this structure because of the somewhat "laissez-faire" atmosphere that is obviously associated with a beach summer camp. It allowed communication to flow easily from the counselors to the supervisor, which lead to efficient work from the camp counselors because we did not need to constantly work under orders from the supervisor, and felt a sense of trust in each of us to do our job effectively.

This team functioned extremely well, and displayed aspects of all of the distinguishing characteristics of high-functioning teams. One of these characteristics that was noticeably present was "High - performing teams shape purpose in response to a demand or an opportunity placed in their path, usually by higher management" (Bolman and Deal, 129). It was well understood that high performance in the position of camp counselor was rewarded with the opportunity to be promoted to the position of assistant supervisor, along with higher pay. High performance in the assistant supervisor position was also rewarded with a promotion to supervisor, and even higher pay. This incentivized our work and influenced a noticeable motivation to do outstanding work. Another extremely noticeable characteristic that was displayed by this team was "High - performing teams are of manageable size" (129). The breaking up of counselors into pairs, with small groups of campers allowed for each pair of counselors to, A. hold each other accountable for the others work, and B. maintain better supervision of the campers by breaking down the larger group into smaller groups. These smaller groups allowed for better accountability of campers and better attentiveness to the needs of individual campers. The third characteristic this team displayed particularly well was "High - performing teams develop a common commitment to working relationships" (130). Every couple of weeks the entire beach staff would get together for drinks, and play softball in the park. These games built great working relationships, and gave the work atmosphere a positive boost.

While the structure of the camp was an obvious contributing factor to the success of the team, individual efforts by each counselor to be a good teammate was arguably just as important to our success. Unselfishness, and a willingness to go the extra mile, for the good of the camp, was the two most noticeable traits in the camp counselor staff. This choice to provide a better work ethic made the job of the supervisor easier, and allowed them to focus on bigger picture aspects of the camp, rather than micromanaging, that would have led to inefficiencies from overlooked issues.

Post #3- Acting Opportunistically

There are many possible ways to measure the statistics behind people, and their patterns of making decisions. It is difficult, however, to measure how often, or not so often, people behave opportunistically. That is, make decisions that allow the individual, or organization to maximize their effectiveness in achieving whatever their end goal may be. On an individual level, one of the more interesting in opportunistic behaviors to analyze is drug use, more specifically marijuana use. This an extremely common trend of in opportunistic behavior with young people. A friend of mine consistently displays this in opportunistic behavior, for many possible reasons.

One possible reason for this in opportunistic behavior, is a misconstrued idea of what is opportunistic when it comes to the use of marijuana. To be more clear, this individual might think that his use of marijuana is actually opportunistic because of how it reduces his stress, and in turn allows him to function more effectively when not under the influence. This ideology may, or may not, have a logical basis behind it, but when looked at from an economic standpoint it most certainly is not opportunistic. The amount of money he spends to purchase marijuana far outweighs the cost of reducing his stress using alternative methods. He also experiences both economic and, non-economic transaction costs in the pursuit of obtaining marijuana on a weekly basis. The non-economic transaction cost is the time that it takes him to contact someone who would distribute it, transportation to the location of purchase, and process of ingesting the substance. The economic transaction cost is the cost of materials necessary for ingesting the substance, also known as paraphernalia. So this person, possibly, acts in opportunistically because, he overlooks these costs, and only sees the positive effect of his reduction of stress.

Another possible explanation for this in opportunistic behavior is because of the personal enjoyment he experiences from using marijuana. This is similar to the previous explanation, but differs because of this one has no logical use that would increase his effectiveness in achieving his goals. This is why it is a clear in opportunistic decision because he is allowing personal feelings to outweigh his ability to maximize efficient use of his time and money. This is an extremely common explanation for in opportunistic behavior by many organizations. One example of this would be Chik-Fil-A.  Chik-Fil-A does not open any of its stores on Sundays. This  a clear in opportunistic decision because of the profit that could be obtained by remaining open for 16.67% longer. They keep the stores closed on Sundays because of the religious views (personal feelings) of the central organization.

A third possible explanation for this in opportunistic behavior is a habitual pattern that has led to his success in the past, and the transaction costs that he would incur by changing this pattern, He has used marijuana as a stress reducer for several years, and has experienced success in utilizing marijuana to better effectively accomplish his necessary tasks. By changing this habit, and looking for an alternative stress reducer, there are numerous possible transaction costs he could incur no matter that alternative he chooses. Say he chooses to exercise more in order to reduce stress. One non-economic transaction cost he could incur is the loss of time he could use to accomplish other tasks, that he spends exercising. The time it takes to reduce stress could vastly differ between the two options. Organizations experience this in that they may have a distributor that charges higher prices than a different distributor. But the possible costs of changing distributors, (i.e terminating the current contract, hiring lawyers to draft a new contract with the new distributors, time lost through the retraining of the new distributor on the organizations policies, etc) could possibly outweigh the loss incurred by remaining with the more expensive distributor.

Blog Post #2- Experience in Organizations

Every organization has its own unique qualities that cause them to operate in different ways. The market for which the organization is tailored to, has an immense impact on the way it handles its day-to-day business. Aside from working in part-time jobs in high school at restaurants, I have had a unique experience working in one organization, the United States Marine Corps. My experience, and view point on the organizational structure, has been specifically in a training command environment, and therefore may significantly differ from the organizational environment of a different command. The USMC has a long tradition of operating under a strict "by the book" fashion, but today's society has forced changes on every organization and the USMC is no exception.

My experience was two, six-week, summers in Quantico, Virginia at Marine Corps Officer Candidate School. Officer Candidate School is a Marine Corps training command that trains, screens, and evaluates college educated, or current college students to become Marine Corps Officers. Upon completion of the training you commission as a second lieutenant in the marines, or you go back to school to complete your senior year, and then commission, which is the path I took. Strict, structured, and controlled would be the best words to describe the operation of the USMC's training environment. The military has a very strict chain of command operation, in which any issues, orders, changes, either from the bottom up, or top down, have to be carried out through the chain of command. Jumping levels in the chain of command, that is reporting anything to a superior that is not in the direct level above you, is unacceptable and will result in disciplinary actions. I observed that often times this led to inefficiencies when conducting day-to-day operations as this process can cause communication to move slow as it has to go through each level of the chain of command.

It is also interesting to analyze the transaction costs incurred by the USMC during this training process. Often times many organizations have internship programs, in which an inexperienced worker would gain experience through paid, or unpaid, work, to better understand the day-today operations of a company. Many of these organizations incur transaction costs in searching for these potential interns, training them, and possibly paying them to learn the operational "ins and outs" of that particular organization. 

The USMC experiences incredibly high transaction costs through this process. They incur transaction costs through the recruiting of potential applicants by renting out offices in numerous locations throughout the U.S, staffing these offices with 3-4 recruiters. The recruiters sole purpose is to find people eligible for this training. Their is countless transaction costs in the actual process of determining whether and applicant is eligible for training including, but not limited to, medical testing (paid for by the USMC), dental screening, and physical fitness evaluations. Once at the actual training the USMC incurs transaction costs by paying the candidates in training a monthly salary, providing food, housing, clothing, and essentially all aspects of daily life. Along with a full training staff, and training base. 

I had a unique experience going through this training as the Marine Corps experienced significant changes in between my first increment of training and the second increment. When I had first gone to officer candidate school, females were trained almost entirely separate  from the males, and had different standards for almost all evaluated events. Upon completion of the first increment of training I returned to school for my Junior year. The military received serious scrutiny about the training environment and were eventually forced to begin implementing integrated training between men and women. So during the second increment of training that I attended last summer, many of the events that had previously been separated between male and female were now integrated. Many of the standards that had been different for men and women were now the same across the board. While their were still obvious aspects of training that were necessary to keep male and females separated, it had a noticeable impact on the organizational structure of how the training command operated. 

Blog Post #1- Harold Demsetz

Harold Demsetz

Harold Demsetz is a well-respected economist, currently teaching at the University of California, Los-Angeles in the economics department.

He was born in 1930 in Chicago, Illinois. He attended the University of Illinois for undergraduate studies, and in 1953, received his B.A, then going on to study at Northwestern where he received his MBA in 1954, and P.H.D in 1959. He has spent his entire career in education at various universities including the University of Michigan, University of Chicago, and University of California.

Most that has been published by Demsetz has focused on monopoly, antitrust, competition, along with several other aspects of the economic approach he took part in pioneering called New Institutional Economics. Demsetz has published numerous publications, and research, regarding economic theory, possibly most notable, being his work published in the founding of managerial economics. Demsetz continues to teach work at UCLA, as well as speak at varying lectures and events.

Demsetz work has been extremely impactful on organizational economics and the further improvement of that discipline. I did not know any information about him prior to this course. I believe his work  will almost certainly come up at some point during this course and we will be discussing some of his theories.

source: http://www.econ.ucla.edu/demsetz/