When it comes to the concept of opportunism, it shows up in areas where we all wouldn't think it would. Opportunism is defined as achieving some sort of gain at the expense of others. Those effects can be social and even monetary.
I have previously discussed my opportunity to write for this website called cover32. I discussed a lot about transaction costs and the issues with that last week. However, opportunism also exists in this company, and that opportunism contributed to the management change.
The top management, which included the owner and editor-in-chief, put a system in place where the team editors would receive revenue. However, a condition was placed in that revenue that the editors (including myself) did not know about. The checks would be cut to editors once their revenue gained for the site surpassed 100 dollars.
There was also a catch involved. While the revenue was certainly based on clicks, the amount of clicks needed to reach a substantial amount of revenue per month was nearly impossible to reach. So, while the top of management received a good amount for the work we did, we weren't receiving any money. The appointed national co-editors even relayed to me that the way the system was set up, no one was really going to reach that total and ever get paid. This act by the very top to implement a system to taking in revenue without compensating editors is an act of opportunism. It hurts the editors in that they aren't getting any piece of the revenue pie they are working for.
There are a couple other examples of opportunism in this company. The national writing team (assembled over the summer) had a bunch of assignments to keep the football interest going. One of the people in this group used resources as a part of opportunism. He plagiarized a post from somewhere else for a summer assignment. That opportunism exploited the hard work of another and hurt the reputation of our website all for personal gain.
Another potential opportunity for this exists for us editors every day. Every editor has writers under them, which gives them a sort of power. Since the editors receive emails from writers and put them on to the website, it would be easy for the editors to pass off the work as their own to gain power and potentially move up in the company. Luckily, that type of opportunistic actions has not occurred since I have been on staff.
Since this sort of relates to what we cover at the site, I wanted to also talk about this event as opportunistic. As those who follow the NFL know, Hurricane Irma brought flooding and wind damage to the state of Florida. It did so during week one of the NFL season. The issue with the hurricane was that the Buccaneers and Dolphins were supposed to play in Miami during that first week. With the path of the storm known before landfall, the NFL had options. They could play the game before the scheduled time, or they could move the game to a neutral site and play there. Many options were open for a relocated game, such as Atlanta and Charlotte, as the Falcons and Panthers were both on the road to start their seasons. Instead of moving the game to a neutral site, the NFL decided to move the game to week 11, since both the Bucs and Dolphins had a bye then.
This action has multiple consequences and perfectly displays opportunism. The first question is where the gain lies in doing this. If the NFL were to relocate to a neutral site, they would need to sell tickets. The tickets would most likely have come at a lower price than where the game was originally scheduled, which would decrease revenue for that game. The other big issue relies in player safety. Player safety has been an important subject for the NFL recently, but it clearly didn't matter in this decision. Now, the Dolphins and Bucs both have to play 16 games in a row. Playing that many in a row without a bye dramatically increases the risk for injury, and puts a major dent in the player safety that has been pushed lately. The opportunistic actions here clearly reside in the decision of the owners in that they wanted the full revenue from that game, and are willing to sacrifice player safety for that money.
The closer we look, the more we can see opportunism all around us in our lives.
Saturday, September 23, 2017
Saturday, September 16, 2017
Organization and Transaction Costs
While I have not really been a part of RSOs on campus in my time at the University of Illinois, I have worked in an organization. In the spring, I began working at an NFL-centered website called cover32.
cover32 has a hierarchical structure just like any other sports writing site. The owner and the editor-in-chief are at the top of the structure. The editor-in-chief carries out the owner's wishes and vision for the website. Underneath the editor-in-chief sit two national co-editors. Basically, these editors take care of national stories (stories about the NFL in its entirety) and are in direct contact with the national writing team that they assembled. Directly under the national editors lie the managing editors of all 32 NFL teams. Each editor is responsible for the writers and contributors on their team staff, and getting posts out not only from themselves but from their team of writers as well. Obviously, last but not least, the writers sit under the editors and are in direct contact with them about their team's writing schedule.
This structure, while standard, had some issues involving transaction costs. The goal at cover32 is to efficiently provide information to NFL fans and readers and to raise some revenue in the process. Those goods and services are part of the transaction. However, the previous editor-in-chief struggled with the managing portion. In addition, motivation costs were one of the main issues with cover32.
Managing out and managing down are two important parts to success in this format. The previous owner and editor-in-chief struggled in managing down due to lack of communication with the team editors. He mainly stayed in contact with the national editors, but never really contacted the team editors. The ship was not a tight one, and that alone incurred these motivation costs. The heads of cover32 also struggled in managing out. There was no real formal recruiting process set up, which led to inefficient production of articles at the site.
Motivation costs, as described by Milton and Roberts, have two parts. Both parts played a part in the issues at cover32. Information incompleteness is one of those. That occurs when parties of an organization don't have all the relevant information. This occurred due to the heads of cover32 not keeping everyone in the loop. Most of the team editors often had no clue as to changes in direction.
The other type of motivation cost is imperfect commitment. Imperfect commitment occurs when parties fail to follow through on promises. Part of this fell on some of the team editors. With the standard being around 30 articles per month, some of the editors failed on keeping this promise. However, with many other commitments and life going on, it's hard to commit to this number. On top of that, payment had always been an issue. Editors were supposed to be compensated, but with traffic so low, none of the editors were compensated for their efforts. That lessens intrinsic motivation, and therefore contributes to imperfect commitment. This also comes down to the failure of managing out and recruiting.
However, things have changed at cover32. Recently, someone bought out cover32 from the old owners. He actually was once a part of this website before going big. He brought a new plan along that would fix some of the transaction costs. First, a formal application was put into place to add more writers. This inflow of workers helped lessen the burden on the managing editors. That part of managing out was stressed. As far as managing down goes, the plan is to be in contact with all of the editors at all times to stress efficiency. The new owner also wants to have a lead division editor, meaning that each division would have one guy managing the efficiency there. Plus, with information being more complete and motivation high (everyone is to be compensated now, even writers), transaction costs should lower, leading to more efficiency as an organization.
cover32 has a hierarchical structure just like any other sports writing site. The owner and the editor-in-chief are at the top of the structure. The editor-in-chief carries out the owner's wishes and vision for the website. Underneath the editor-in-chief sit two national co-editors. Basically, these editors take care of national stories (stories about the NFL in its entirety) and are in direct contact with the national writing team that they assembled. Directly under the national editors lie the managing editors of all 32 NFL teams. Each editor is responsible for the writers and contributors on their team staff, and getting posts out not only from themselves but from their team of writers as well. Obviously, last but not least, the writers sit under the editors and are in direct contact with them about their team's writing schedule.
This structure, while standard, had some issues involving transaction costs. The goal at cover32 is to efficiently provide information to NFL fans and readers and to raise some revenue in the process. Those goods and services are part of the transaction. However, the previous editor-in-chief struggled with the managing portion. In addition, motivation costs were one of the main issues with cover32.
Managing out and managing down are two important parts to success in this format. The previous owner and editor-in-chief struggled in managing down due to lack of communication with the team editors. He mainly stayed in contact with the national editors, but never really contacted the team editors. The ship was not a tight one, and that alone incurred these motivation costs. The heads of cover32 also struggled in managing out. There was no real formal recruiting process set up, which led to inefficient production of articles at the site.
Motivation costs, as described by Milton and Roberts, have two parts. Both parts played a part in the issues at cover32. Information incompleteness is one of those. That occurs when parties of an organization don't have all the relevant information. This occurred due to the heads of cover32 not keeping everyone in the loop. Most of the team editors often had no clue as to changes in direction.
The other type of motivation cost is imperfect commitment. Imperfect commitment occurs when parties fail to follow through on promises. Part of this fell on some of the team editors. With the standard being around 30 articles per month, some of the editors failed on keeping this promise. However, with many other commitments and life going on, it's hard to commit to this number. On top of that, payment had always been an issue. Editors were supposed to be compensated, but with traffic so low, none of the editors were compensated for their efforts. That lessens intrinsic motivation, and therefore contributes to imperfect commitment. This also comes down to the failure of managing out and recruiting.
However, things have changed at cover32. Recently, someone bought out cover32 from the old owners. He actually was once a part of this website before going big. He brought a new plan along that would fix some of the transaction costs. First, a formal application was put into place to add more writers. This inflow of workers helped lessen the burden on the managing editors. That part of managing out was stressed. As far as managing down goes, the plan is to be in contact with all of the editors at all times to stress efficiency. The new owner also wants to have a lead division editor, meaning that each division would have one guy managing the efficiency there. Plus, with information being more complete and motivation high (everyone is to be compensated now, even writers), transaction costs should lower, leading to more efficiency as an organization.
Friday, September 8, 2017
Introduction to Dale Jorgenson
Economist Dale Jorgenson was born in Bozeman, Montana in 1933. He grew up living in Montana, and attended Reed College in Oregon to receive his bachelor's in economics. He followed that up by receiving his masters at Harvard University.
After teaching for a while at Cal-Berkeley, Jorgenson went back to his roots and joined the faculty at Harvard in 1969. By 1980, he was appointed the Frederic Eaton Abbe Professor of Economics. He rose to head the department of economics at Harvard from 1994 to 1997.
He has held many positions over the years. He was a founding member of the Board On Science, Technology, and Economic Policy of the National Research Council in 1991. He served as president of the Econometric Society in 1991 and as president of the American Economic Association (from where he also received the John Bates Clark Medal in 1971) in 2000.
Dale Jorgenson's main area of expertise lies in the area of combining economics and statistics, where he applied many of the principles to solve concrete issues within the economy. He spent a great deal of time studying the determinants of investment spending, and that time produced a great blueprint on how to apply theory into practical use.
Jorgenson always thrived in the area of research. He has published works with over 70 other economists during his life. Jorgenson has authored over 300 articles on economics and his research in his field. He also has written and edited 37 books. His latest book, The World Economy: Growth Or Stagnation, analyzes the economies of over 40 countries and discusses how the world economy is going to continue rapid growth during the 21st century.
Jorgenson currently serves as the Samuel W. Morris University Professor at Harvard University.
Sources:
https://scholar.harvard.edu/jorgenson/home
https://scholar.harvard.edu/jorgenson/biocv
http://www.belfercenter.org/person/dale-jorgenson
After teaching for a while at Cal-Berkeley, Jorgenson went back to his roots and joined the faculty at Harvard in 1969. By 1980, he was appointed the Frederic Eaton Abbe Professor of Economics. He rose to head the department of economics at Harvard from 1994 to 1997.
He has held many positions over the years. He was a founding member of the Board On Science, Technology, and Economic Policy of the National Research Council in 1991. He served as president of the Econometric Society in 1991 and as president of the American Economic Association (from where he also received the John Bates Clark Medal in 1971) in 2000.
Dale Jorgenson's main area of expertise lies in the area of combining economics and statistics, where he applied many of the principles to solve concrete issues within the economy. He spent a great deal of time studying the determinants of investment spending, and that time produced a great blueprint on how to apply theory into practical use.
Jorgenson always thrived in the area of research. He has published works with over 70 other economists during his life. Jorgenson has authored over 300 articles on economics and his research in his field. He also has written and edited 37 books. His latest book, The World Economy: Growth Or Stagnation, analyzes the economies of over 40 countries and discusses how the world economy is going to continue rapid growth during the 21st century.
Jorgenson currently serves as the Samuel W. Morris University Professor at Harvard University.
Sources:
https://scholar.harvard.edu/jorgenson/home
https://scholar.harvard.edu/jorgenson/biocv
http://www.belfercenter.org/person/dale-jorgenson
Friday, September 1, 2017
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