The Last Post!

I can't believe this is my last post, it seems like I was just writing the bio post about William Baumol. In thinking back over my time in the class, I really enjoyed most of the topics and our class discussions. The class approach was different than many of my other classes which was refreshing to partake in.

One of my favorite lessons I learned in the class was about the principal-agent model and the role of capture. In thinking about organizations I never really considered the negative sides involving bribes or other ways in which one agent can capture or take advantage of the principal.  It was also informing to consider the difference between having one agent or two. There seems to be a lot more conflict in the second case due to the influence of capture. This lesson also makes me think back to the lesson on opportunism. I found it interesting that most people in the class explained how they avoided opportunism in their blog posts and in class discussion. It was difficult for people to think of a time in which they were opportunistic as often times it is done subconsciously. I think this can be a major problem in organizations if people sacrifice the good of the organization for their own personal gain.

I liked the way the class was structured in that the blogging related well to the class discussion. It helped me get a better understanding of the topics by reflecting on my own experience and making solid connections to the material. The one thing I would have liked to get more out of discussion would have been to have more context prior to the excel homeworks. The excel was often difficult to understand at first and I needed the explanation in the next class session to truly comprehend the material. I think it would have been helpful to have a little preview of the homework before it was assigned.

The blogging process was actually quite enjoyable. I was nervous at first because I am not one to put my opinions and thoughts out there for anyone to read. After a while, I used it more as a learning tool and almost forgot that others would be reading it. I also really liked getting comments on my ideas and responding to those comments. I learned where things were poorly explained through the questions asked in the comments. This helped me improve my writing over the course of the class. The blogging didn't take too much time and as I got into it, the time seemed to go by rather quickly. The excel homework was where most of my out-of-class time was spent. It was often difficult for me to understand the concepts as I had little context or knowledge about most of the topics before attempting the homework. I was able to complete all of the assignments, but I definitely needed our class sessions to explain the meaning behind the math. These assignments varied from taking 45mins-1 hr 30mins depending on the assignment.

One comment I have on the way class is run is that we often went off on tangents and then didn't ever get back to the main point and instead continued on with the lesson. While the tangents were enjoyable and informative, I often lost some of the meaning in the lesson because I couldn't decipher between the class material and the tangents.

I would again just like to say that I really did enjoy the class and feel like I learned not only about organizations but also useful blogging skills that I can bring into the professional world.

Branding and Reputation

I worked for Discover Financial Services last summer and was able to see that their main focus is on customer service. In terms of branding, they focus mainly on being the card used by your average, middle-class card member. As opposed to American Express who targets a higher class member, Discover focuses on the normal American consumer. In its current commercials, Discover promotes that its employees are just like the people calling them. Discover wants its members to know that when they call in, there will be a real person on the other end of the line that can assist them in whatever they need.
Below is a link to the Discover website where you can view some of the current commercials:
https://www.discover.com/company/our-company/advertising/index.html

Discover is known for its customer service. It was ranked a close 2nd to American Express in the JD Power survey on customer satisfaction. Discover was only behind by a few points. They have also won numerous awards for customer service and follow the motto that the customer is always right. During my internship, I was able to visit one of the call centers and listen in on calls. The agents are not only incentivized to answer as many calls as possible, but more importantly they are incentivized to make the calls memorable and about the customer. Discover is a new company and used its customer service focus to get to the top of its industry.

I think there is a strong relationship between brand and reputation. Discover ties its branding of being a company for the average American with its reputation of customer service by providing exceptional service to anyone and not just a targeted class of people. Discover is the all encompassing brand where any customer can call in and feel like they are having a personalized experience. They don't want to be all fancy and technical, but instead treat their customers in a casual, yet still professional, way.

Reputation

Not to bring up my sorority...again.  But it has truly been a defining factor in my college years.  When I first became President, the only reputation I had was the one of being a good member.  People knew that I was organized and had the potential to be a great leader, but they knew nothing about my ability to be the face of the organization.

It was my job to set-up my reputation right from the start.  I began by setting expectations for the chapter that I would not falter on.  Those include things such as: coming to chapter, being composed at events, paying their dues, treating the executive board with respect, etc.
I knew that from the start I had to stick by my expectations as well as present a united front with my executive board.  If I faltered, I would have lost all of the respect I had built up and would have to start all over again so that members would learn that they can't walk all over me.

To keep my reputation intact I make sure that I stick by what I say.  If the executive board creates a new rule, we will all stand by the rule even if it is not popular because we know it is best for the house.  I also want to enhance my reputation by acknowledging when I am wrong.  If I make a mistake, I will own up to it because I want the house to see me as a trustworthy person who is confident enough to admit my own mistakes.

It was extremely difficult at first, especially because I was only a sophomore, not to give into the demands of the seniors.  They were older than me and thought they could take advantage of my position; however, I always stuck to my beliefs and eventually they realized I would not falter.  Building that relationship with them was important to building their trust in me as a leader.

Principal-Agents

A real-life situation in which I was the middle agent between 2 other agents is with the National sorority organization and my specific chapter members. I am the intermediary between these two groups and must try to reconcile differences that occur.

As President of my chapter I must balance the requests of the National Council and what the chapter wants. As some background information, National Council is the governing body of all of my specific sorority in the United States. They set the rules and are the ultimate judicial board if anything were to go wrong. They want to see all of the individual chapters excel but may have more of an "old-time" view on sorority life as all of these members range in age from 30-70 or so.

What my general chapter members want is to enjoy their sorority experience. Most of them do not even know who is on the National Council. It is my job to take what my chapter wants to do and make sure if falls within the National Guidelines.

In terms of how they evaluate "good performance" by me, the 2 other agents see things very differently. The National Council thinks I'm doing a good job if I excel at all of their requirements (ex. implementing ritual activities into chapter events, raising a certain amount of money at philanthropy events, getting forms in on time, etc). The chapter believes I am doing well if I allow for fun activities that may or may not have to do with ritual. A lot of times chapter members want to push the envelope on what is allowed in terms of social events but I often have to reign in ideas. It can be difficult to try to explain to the chapter that National wants us to do things a certain way because the chapter doesn't have a real concept of the National organization.

I have tried to explain to the chapter that the National organization is not here to punish us, but rather help us understand why we were founded and what we stand for. So far, I haven't been able to complete resolve this discord.

I try not to satisfy one group more than the other. My best effort is to allow the chapter to do as much as they want as long as it falls within the National requirements. Most events end up working out, but sometimes the chapter may become angry because I must veto an event they want to hold.

Can't we just all get along?

Different work situations call for different courses of action. Sometimes things go well and other times work relationships and friendships can be sacrificed.  Both scenarios that will be described involve my organization and the executive board.

In the first scenario when things went well, my executive board had to deal with the problem of not allowing all members to live in the house. There were 60 girls who wanted to live in, however the house could only fit 55. We wanted to be fair in our judgements so we got to brainstorming how we could decide which members could live-in. Me and 2 other executive board members (the VP and the House Manager) discussed at length the different options. We all were able to keep calm even though this was a stressful situation because we were deciding where girls would potentially live for the next year. We decided to choose based off of points that they receive for going to certain events or achieving certain awards (GPA, philanthropy events, etc.). Having the three of us work together was best because the VP was able to gather all of the points, the House Manager was in contact with our House Director about an updates, and I (as President) was overseeing all operations.
We presented ourselves as a united front and knew that we would face some backlash. The girls who couldn't live in would not be happy with our decision but we felt that together we could explain or reasoning and help the girls find alternative housing as best as possible. Because of our diligent work and commitment to the sorority, we were able to resolve this issue rather quickly.

In a second scenario, the outcome was not the desired one. As President, it is my job to deal with any exec member who is not doing their job. While this may be difficult, it needs to be done for the best of the organization. The problem was that this executive board member did not have any of their events planned for the semester when I asked that it all needed to be completed, and in addition broke some of the organization's rules. Multiple members came to me because they felt this board member was not doing their job. It came down to me to address the issue. I sat down with this board member and explained that she had not completed any of the tasks that I asked her to complete and that I felt she needed to get everything done in the next few days or we would need to find a replacement for her. I gave her a chance to speak as to why the work was not completed, but I felt that she was just talking in circles. She started to get angry with me for brining this up, but I explained that it was not a personal issue, but rather a part of my job. This board member and I had been friends for a long time, but being in these power positions has torn our friendship apart. She no longer wants to be my friend and believes that I don't trust her as a person. I was not trying to make a personal judgement, I was just the messenger for what the entire organization was thinking. I believe that our conflicting work ethics and thoughts on procrastination got in the way of having a productive conversation. The situation has still not been completely resolved.

Disfunctional Group Projects

An example of team production from my own life that I think a lot of people experience is group projects. Many times these projects are dread in school as the group usually follows a typical make-up: the A-student, the slacker, the procrastinator, and the arguer. While there may be some variation to this make-up, there is usually some combination of these types of students. When all of these people are forced to come together to create an end product, the process does not always go over smoothly.

Below is a summary of how one of my experiences went in a group project.
A-student: does most of the tough research, writes the introduction and conclusion of the group papers, edits the entire paper, plans the group meetings
Slacker: shows up to group meetings but doesn't contribute, the A-student ends up doing their part for them
Procrastinator: Always has an "excuse" not to come to the group meetings, does their part of the project but not until the night before it's due
Arguer: Comes to the group meetings just to play the devils advocate, is an average student and does assigned work but harms the group harmony.

In the end, all of the work ends up getting done, and the group all receives the same grade. While all the students get the same grade, each student "type" may have a different reaction. The A-student may not want to share the grade with the other members because they feel they did more work. The Slacker may be happy with the grade because they got more than the effort they put in.

If the students were able to give input into the grade, I think it would follow more along the lines of the sharing concept discussed in the article "how to Get the Rich to Share the Marbles". The piece discusses an interesting scenario about 3-year-olds and sharing. In the first case where both 3-year-olds had to pull on the rope to get a marble, the babies "equalized the wealth" about 75% of the time. In the second case where the marbles were already in the cup and no work was needed, the babies only shared 5% of the time. And in the last case where only one baby was required to pull the rope to get a marble for themselves, they only shared 30% of the time. The conclusion that was drawn is that the "'share-the-spoils' button is not pressed by the mere existence of inequality. It is pressed when two or more people collaborated to produce a gain."

To get the A-Student to want to share the grade, the other students would have to put in equal effort. It's not about the output of each member, but more about the effort shown. People are more willing to share and be supportive if they see the other person is putting in effort.

Illinibucks

The idea of Illinibucks sounds appealing at first thought. The idea that one could "buy" their way into getting whatever they want. This sounds a lot like the way capitalism works, where if you have enough money, you can get whatever you want. The use of Illinibucks could be for class registration priority, skipping to the front of the textbook line (which is notoriously long during the first few weeks of school), or for skipping to the front of the line at campus restaurants. The use of this "currency" should be for something that is an inconvenience to students and that they would be willing to pay money to overcome.

The strategic spending of this money is something students will have to consider. Do they allocate their Illinibucks so that they can use a little for multiple wants or do they pour all of their money into one particular thing they really want. It all depends on the elasticity of demand for the services that the Illinibucks can buy. I would imagine that getting priority class registration would be in extremely high demand as that is a major problem at U of I. At least from my experience, getting into the classes I want is a painful process.

The issues that would arise from pricing vary based on if the Illinibucks are over priced or under priced. If they are priced too high, only wealthier students would be able to buy them. This creates an income discrimination that could cause the University a lot of trouble. If they are priced too low, everyone would be able to buy as many as they want and the Illinibucks would become useless.

Another issue I see forming is that of a black market for Illinibucks. If they become scarce because of restrictions to the number sold, students who have the bucks could sell them for much more than the market value. This black market could be dangerous to the purpose of the bucks and would create fierce competition.

Overall, I think there are more problems with this idea than there are benefits. Too much would need to be worked out for this to work correctly. There aren't problems on campus that are that bad that they warrant this kind of program.

Managing Post-College Risk

Upon coming to U of I my freshman year, I was torn as to what I wanted as my major.  I was admitted into DGS (General Studies) because I did not know whether I would ultimately end up in engineering or economics.  I knew that both majors provided great opportunities in the professional world, so I was not too involved in managing my post-college risk at this point.  However, I did have to manage the risk I would face in college.  Did I risk going the engineering route and having my gpa suffer or did I go with economics (which I liked better) and have a higher gpa.  I ended up choosing economics, not necessarily for the gpa reason, but because I couldn't see myself being passionate enough to take the difficult engineering classes.

In choosing my major, I knew that economics would offer some financial stability after college.  Economics required both math and written skills which translate into the ability to think critically.  Critical thinking is a skill desired by most employers.  I also knew that economics gives way to a broad job market where I could pretty much go into whatever profession I wanted.

In terms of activities I am involved in, the main one is being the President of my sorority.  In choosing this position I was not thinking about how this would effect me post-college.  I was more concerned with my satisfaction in college and doing something that I really wanted to do.  Looking back on my decision, this does help with managing post-college risk as leadership is a key skill that employers want in a potential employee.  As President, I am presented with the opportunity to lead a group of 180 women each and every day.  This experience is extremely valuable to my future as I will end up managing at some point in my career.  This leadership also helped build my confidence, which is beneficial to having a job and taking risks on the job.

While making decisions in college, I had some awareness of the post-college effects; however, most decisions were made to increase my satisfaction with college.  As long as I had the possibility of financial stability after college, the specifics of what I wanted to do in college could be based more on personal preference.

Missed Opportunism

Last semester, one of my friends was given the chance to act opportunistically but ended up acting in a more human manner.  My friend, we will call her Jessica for anonymity purposes, was given a job offer to work at a camp in Colorado.  She was given a decent salary and would be able to work with horses, one of her passions since she was little.  Jessica would have been away for three months for the job and would have been able to experience life in Colorado during her free time by exploring the vast mountains and tourist attractions.  This was Jessica's dream job; however she ended up settling for an unpaid internship in her home town.

While some may see Jessica's decision as a cowardly one because she allowed herself to be influence by the people around her, Jessica felt it was the right decision.  A few reasons for Jessica's rejecting of opportunism are possible:
1) She cares about her family and friends and therefore values their opinions
2) She does not want to risk her relationship with her boyfriend
3) She could always travel to Colorado later in life.

While Jessica had to chance to act opportunistically by taking the camp job, she decided to stay home for personal reasons.  The other factors in her decision were her family and friends back home.  She knew that they would miss her and did not want to be away from them for too long.  Jessica's family did not want her to leave, and asked her to stay home.  She also did not want to risk her relationship with her boyfriend to take the job.  Jessica and her boyfriend had been having problems and she felt that distance would only make it worse.

Opportunism, defined as the taking of opportunities as and when they arise, regardless of planning or principle, was missed in this case.  Jessica could have ignored her family's wishes and taken the job, but instead considered their feelings in her decision.  She could have given up her relationship for the job, but instead felt this personal connection was more important than the money.

Lastly, since Jessica is young she may have felt that there would be further opportunities to work in/ visit Colorado later in life when she is more settled.  Jessica was going through a lot with her relationships and did not want to travel at the moment.  When she is more settled in a job and in her personal life, Jessica may have the funds to travel and see Colorado when there would not be costs to the people she loves.

Organizational Change: Elections in Sororities

Every Fall it comes time for elections within my sorority.  12 sophomores will be elected to represent the house of over 150 women and take on the responsibilities left by the previous executive board members.  This is an exciting yet scary time as the old executive board passes along its duties, and hopefully its knowledge, to the new board.

The process for elections is standard each year and consists of nominations, letters of intent, and speeches.  Each candidate must self-nominate for a position on the board and then write a letter explaining their qualifications for that position.  These letters are sent to the entire house to help inform their decision.  On election day, each candidate presents a speech demonstrating their passion for the house and for the position for which they are running.  The house then votes and each winner must have 2/3 support from the chapter.

 In terms of transaction costs, elections are not very complex, but there is a lot of uncertainty that goes into the equation.  Selection of a candidate is based solely on the letter of intent and the speech given.  Most of the older girls do not know the younger members as well and therefore cannot make a decision based on actual experience.

Another transaction cost issue is difficulty of measuring performance.  We do not know how well a candidate will perform until they are actually holding the position.  We can measure their success at the end of their term, but by then it is too late.  We have to trust that the letters and speeches truly demonstrate what each candidate will bring to their executive board position.

As the current President, there are a lot of coordination costs for me in particular.  I have to disperse information to the chapter about the candidates running.  I also have to set-up the time for elections and make sure that at least 2/3 of the chapter is present (similar to bringing buyers and sellers together, I have to bring candidates and voters together).  There is also market research involved as I and the other executive board members have to meet with each candidate before they can officially run for their respective position.

A lot of work and transaction costs go into having a successful election; however without this dedication, the house would not be able to move forward to the new executive board.  We try to design elections so that the best possible outcomes will arise, but there is always room for error.  A candidate could have an amazing speech, but ultimately not be fit for the position in which they are running.  My sorority is continually trying to improve our elections process and hope that the Fall 2013 elections will be a success.

Who is William Baumol?

William Baumol is most notable for the amount of successful books and journal articles he has written.  His research interests include entrepreneurship and innovation, economic growth, industrial organization, antitrust economics and regulation, and economics of the arts (Experience).

Currently, William Baumol is the "Harold Price Professor of Entrepreneurship and Academic Director of the Berkley Center for Entrepreneurship and Innovation in the Stern School of Business at New York University; and senior economist and professor emeritus at Princeton University" (Experience).  He also serves as the advisor to the president and CEO of the Kauffman Foundation.

William Baumol has "twelve honorary degrees and membership in the U.S. National Academy of Sciences, the American Philosophical Society, the Accademia Nazionale Dei Lincei (Italy), and the British Academy. In May of 2009, two Chinese universities, Wuhan University and Zhejiang Gongshang University, named Centers for Entrepreneurial Research in Professor Baumol's honor" (Experience).

In this class we may look into his studies on industrial organization as industry is a large sector of organizations in the past and today.  His research may be relevant to out studies of this business type.

Bibliography:
"Experience Faculty & Research." NYU Stern. N.p., n.d. Web. 04 Sept. 2013.

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