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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