Monday, December 1, 2014

Final Wrap-Up Post

Before this course, I didn’t realize the role that economics plays in everyday organizations.  In the past, I used to think of organizations as teams fueled by emotion and leadership, but I now know that those aren’t the only factors that drive a team.  Teams function as individual markets, wielding contracts for employees and resources, and there is definitely some strategy when it comes to creating and running a successful organization.  Pulling from my extra credit assignment, I’ve learned that shirking is a real problem when it comes to teams.  I knew that “slacking off,” as we call it in more informal terms, is a problem for any team to overcome (I’ve experienced it in teams that I have been apart of), but I didn’t realize that there is an approach to combat this.  Through team loyalty and rewards, firms oftentimes boost productivity and reduce shirking.  I found this interesting because I’ve always considered myself a “team player” and this natural quality would be something employers would look for because it would increase their profit in the long run.

In terms of the class structure, I really liked blogging on a weekly basis in addition to the excel homework.  In many of my past economics classes, we’ve only had the excel homework side of the course, meaning it was very data driven as one would assume economics course would be.  However, I think that it is critical for data and number driven students like us to see the bigger picture and be able to articulate our findings, and that is where blogging comes in.  The blogging has allowed me to express my ideas related to economics in a way that isn’t numerical.  I think it has also allowed me to better grasp the numerical economics that we do in class because I’ve had to draw from personal experiences to explain concepts that we are learning about.  Neither of the two activities, blogging or the excel homework, were terribly time consuming, and because we have the class calendar online, I found it easy to keep up with assignments.

Something that I think would be beneficial to students in the future is the extra credit assignment.  Personally, I enjoyed learning not only about my economist, but also learning about organizations at a deeper level on my own.  The project allows students to put in as much effort as they would like to, and I would say that one gets out of it what one puts in.  I wish I had been able to devote more time to the project, but I am grateful that I had Thanksgiving break to work on it.  I think that making the project a mandatory part of the course, instead of perhaps a final, would encourage student to invest time and effort into the project, but on the other hand, they might not be as genuinely interested in learning.

Overall, I don’t think there is anything big I’d change about this course.  I originally selected the course last spring because I found the blogging element to be something that really intrigued me because it is very different from the rest of my economics courses.  I’ve had a great experience learning about the economics of organizations and look forward to applying my knowledge to the working world after graduation.

Friday, November 14, 2014

Reputation: Actions speak louder than Words

I think that in every organization one is in, they have some sort of reputation. Whether that be in the Society of Women in Business, your sorority or fraternity, or an internship/job, the manner in which you carry and portray yourself affects the opinion that others have of you.  In a larger organization, it may be that you are fly under the radar, but being the “uninvolved one” can be a reputation in itself.

Personally, I believe that my reputation is portrayed similarly in the organizations that I participate in on campus.  As for both the Society of Women in Business and my sorority, I’d say that others see me as an organized, involved individual who puts forth her best effort and enjoys what she does.  I think that I have obtained this reputation in both organizations because of past involvement.  I have been involved with the Society of Women in Business and my sorority for several years now, and I have contributed through committees and leadership positions.  These actions and the ability to deliver results have shaped my reputation.  In order to keep this reputation in tact, I take on more responsibility within both organizations as it’s presented to me. I think that this comes naturally though, and I don’t put much thought into becoming more involved.

Similarly, I think that it is also very easy to build a reputation at work. I think that in the past, I also built some sort of reputation at my summer internship.  I believe that this was largely dependent upon the way in which I carried myself and the first impressions that my coworkers had of me, because I was only with the firm for a short amount of time.  However, I also think that the work that I produced had a large impact on my reputation.

Senioritis is a perfect example of a time in which I will most likely stray away from my reputation.  As I wrap up first semester with a job already lined up for when I graduate, it is very difficult to stay focused and maintain the reputation that I have established for myself.  My motivation is probably at an all time low, however, I still want to be successful in my last year of school and prove that my reputation does truly reflect who I am.

Reputation acts as a promise to an experience good.  Time allows others to see how you act in situations, how you deliver results and how you carry yourself in general.  One can assume that you will act one way from your reputation, but oftentimes, they won’t know your ability to deliver (the experience good in this hypothetical) until they have worked with you on a project, assignment, or in another situation in which they can see your experience, whether that be a certain trait, like artistic ability, work ethic, etc., first hand.

Wednesday, November 5, 2014

An Isosceles Triangle Principal-Agent Model

In a perfect world, the principal-agent model is bilateral, but in the real world, things aren’t quite as simple.  A situation in which I acted as an agent to multiple principals is when I held the position of Vice President of Recruitment for my sorority.  In the sorority world, the VP of Recruitment acts as a bridge between both their sorority and the Panhellenic Council, a governing body to all of the sororities on campus.  The VP of Recruitment is in charge of communicating with both entities in order to ensure that fall formal recruitment is successful. 

Sorority recruitment is a very technical process in which everything from food to outfits to decorations and logistics must be planned to a tee.  Each sorority chapter has their own ideas, however, they are responsible for abiding by the bylaws that the Panhellenic Council sets.  One of such “rules” is that a house may not spend more than $2000 during the fall semester on decorations for recruitment.  Each chapter must also provide documentation that they have not surpassed this amount.  In this situation, I would describe the Panhellenic Council as the "regulator" and the individual sorority chapter as the "client." 

The position of VP of Recruitment puts an individual in a difficult situation.  She wants the best for her chapter and wants to maximize its recruitment results, but she also wants to be a devoted member of the Panhellenic community.  Throughout the semester preceding fall recruitment, the VPs of Recruitment from each house meet up formally every month in an attempt to make the recruitment environment between chapters less competitive, and in turn, friendlier.  This unbalanced dynamic makes for an awkward situation.  Oftentimes, a VP’s loyalties lie with her chapter, and she is unwilling to share ideas or contribute to recruitment conversations with other VPs of Recruitment.  This presents a problem for the agent.  The principals in this situation have different goals.  The individual sorority chapters want to maximize their own recruitment results, while the Panhellenic Council wants to create a friendlier, unified Greek community.

I don’t see an immediate and easy solution to this issue, since there will always be some level of competition in the recruitment world.  Competition between chapters makes it difficult for VPs of Recruitment to value their commitment to the Panhellenic Council over their chapter.  By not contributing to conversations with others at these recruitment meetings, the agent satisfies one principal, but not the other.  It seems that in this case, rather than the model being an equilateral triangle, with each principal having equal input, the situation is an isosceles triangle, in which the sorority chapter has more input than the Panhellenic Council.

There is also another layer to this executive board position.  Since my sorority is a national organization, I also had to answer to my sorority’s national council.  I met with and phone conferenced many members of our national team in order to ensure that they were happy with our efforts and that I was upholding my sorority’s national values.  This principal entity's goals closely align with those of my chapter, and therefore, they are easier to please than the principal that is the Panhellenic Council.

In any situation in which two or more parties are involved in conjunction with asymmetric information, it will be difficult for the agent to successfully perform his or her duties.  This can be in an organization, such as the example I mentioned, or through a work situation, as was mentioned in the prompt.  This principal-agent dilemma can also be applied to the internship that I mentioned in an earlier post.  Throughout my internship, I answered to multiple supervisors, who each had a different view of what they wanted the final output of the volatility report to look like.  In this situation, there was a more equal balance between the principals, since their goals, producing a successful report, were the same, and therefore, it was easier to please all parties involved.

Sunday, October 26, 2014

One for all, all for one

The situation that I chose to discuss is fictional from the comedic show, Modern Family.  For those of you who are not familiar with this TV series, it follows three very different families, and each episode revolves around some sort of family problem.  The three families are all related and interact with one another; however, they are also individual entities.

In one particular episode, one of the characters, Mitch, wants to quit his legal job.  Mitch is unhappy with the work environment and the lack of respect he receives at work, and he decides he wants to leave the firm.  The kicker is that Mitch can’t muster up the courage to actually quit.  He has trouble communicating with his supervisor and every time it appears as if he’ll actually quit his job, Mitch chickens out and his supervisor assigns him a new task.  In the end, he finally ends up communicating his desire to quit and leaves the firm.

In this situation, communication is one of the main problems.  Mitch does not communicate with his higher up about his desire to quit or his unhappiness at the firm.  He simply carries on and completes his assigned tasks.  On the other hand, Mitch’s higher up also has a problem when it comes to communication.  He is clearly not observant or interested in the happiness of his employee, and therefore, fails to realize that there is a problem.  A crucial part of communication is listening and engaging those around you, and his supervisor fails to do this. 

The lack of communication also reveals inefficiency within this team relationship.  Since Mitch feels as though he cannot communicate openly with his supervisor, Mitch may have also passed up previous opportunities to relay new ideas, opinions and viewpoints.  Conversely, his supervisor should have been more open and accessible so that this situation would have never occurred. 

In reference to chapter 8 in Bolman and Deal, another road block in Mitch’s relationship with his supervisor is their inability to “recognize that group effectiveness depends on members’ ability to understand what is happening and contribute effectively” (184-185).  Both members in this conflict were unaware of the others’ needs.  They knew their own personal desires, however, they did not listen, communicate and build a general consensus on how to deal with the issue. 

This situation could have easily been avoided.  Had Mitch and his supervisor had a more open, honest relationship, Mitch may not have wanted to quit in the first place.  If Mitch had conveyed his goals, needs and hardships to his employer, he would have enjoyed his job much more.  Similarly, if Mitch’s supervisor had initiated ground rules that promoted open communication, listening and some sort of way to discuss conflict, the situation could have also been avoided.

I think that this situation demonstrates how important it is to set rules and guidelines for group work early on in a group relationship.  When an environment is presented as one that is open, honest, cooperative and respectful, I have found that group members respond more positively and have a better experience overall.

This definitely relates back to the work experience that I mentioned in my last post.  Before I began my internship, guidelines for communication and general expectations were discussed.  I think it was crucial that my employer promoted open communication and regularly checked in on us to make sure that not only our project was going well, but also that we happy.  This type of concern for one's employees promotes a healthy, communication-friendly relationship at the work place. 

Thursday, October 23, 2014

There's no 'I' in team, but there is 'me'

This past summer, I had an internship position with a small consulting firm.  I interned with another individual, and for the majority of the summer, our task was to complete the firm’s annual volatility report.  We were asked to track turnovers at the CEO, CFO and COO levels for Fortune 500 and S&P 500 Companies (around 800 firms) in addition to measuring various demographic factors such as age, race, gender, undergraduate degree, etc.  We ran countless regressions to find trends within the data (for example we created a formula that we used to estimate the total turnovers for 2014), and we were also asked to add our own creative flair to the report, specifically through additional creative data topics.

At the beginning of the internship, our managers told us that we would be rewarded at the end of our summer term with a bonus.  This bonus was dependent on the new ideas and contributions that we brought to the Summer 2014 Report.  It was irrelevant who “came up” with the ideas since they told us that we would both receive the same bonus at the end of the summer.

In this scenario, I see an element of complete fairness.  Unlike the scenario that Haidt describes, there was no need to divide uneven earnings.  We both “pulled the rope to the marble jar” and received the same payoff.  Though this may be fair in the big picture, I’d argue that this method of reward isn’t always the best way to go about things.  In a situation such as the one Haidt describes, it may be true that though both individuals are pulling the rope, but one of the two may be putting in more effort to pull his rope than his partner.  This extra effort lacks a designated reward when the two equally divide the marbles.

In hypothetical situation similar to the one I described from my own experience, let’s say that one of the two interns was the only one to come up with new ideas.  These new ideas led to the most press coverage that the firm has yet to see due to their volatility report.  Is it then fair to equally reward both individuals just because the idea-less intern was present when the creative intern thought of said ideas?

Though we should share our earnings if a situation presents itself in which equal work is done by each individual, I am a firm believer in the idea of rewarding people on an individual basis.  I believe that singling an employee out for a job well done is not only positive reinforcement for that individual, but it is also the more fair thing to do because they put in extra effort to present their best work and should be rewarded.