I've now read each post that has been made and commented on every one. A couple of students have yet to submit. If they can do that by this evening, I'll comment on those too before class tomorrow. For the rest of the semester, I hope the reflections come in by Sunday evening (earlier would be even better). Since we are a small class, students are encouraged to read and react to their classmates' postings. That will help to make us a community.
Tomorrow in class we'll discuss a hub-and-spokes view of organization. The reflections of the students give a similar sort of feel, with each of you as one of the spokes and me as the hub. I wonder if students see it similarly. I also wonder how we might make the process more decentralized, so the students have more of the decision power and I have less. We'll discuss that in class this week, and maybe in subsequent weeks as well.
Here is a general comment about the writing. In some instances it was bland and lacking specifics. There was reference to very broad experience rather than to particulars. There were a couple of exceptions to that, but they were exceptions. I tried in at least some comments to respond to broad strokes posts with quite specific anecdotes, examples meant to illustrate a broader principle. I hope in future posting that you too can generate such examples. It will be more fun to read that way and in the process of coming up with those I believe you'll learn something about the economics.
Many students said they were interested in the class because it seemed an opportunity to learn about entrepreneurship. Here are some comments about that.
First, nobody talked about an interest in learning management principles, so there is the question whether they meant that when they said entrepreneurship or if they meant something quite different. On Thursday, we'll briefly discuss the contribution of Ronald Coase, the father or Transaction Costs Economics, and his famous paper The Nature of the Firm. Coase refers to the manager as an entrepreneur. So the two ideas used to be one and the same. Nowadays, however, the two are usually viewed differently. Managers are employees with supervisory responsibility and possible some strategic direction responsibility as well. Entrepreneurs are business owners, risk takers, who start new enterprises and oversee them soon after their gestation.
This second comment is in the spirit of "no surprises," getting bad news out early, something I talked about in class last Thursday. The course may give you very little in terms of what you want regarding entrepreneurship. For example, that Coase paper I mentioned in the previous paragraph is concerned with the following question. The price systems is one way for coordinating economic activity. The firm is a different way for coordinating economic activity. Each has its strengths and and weaknesses. When is it proper for the activity to be coordinated within a firm rather than in a price system? This is a perfectly interesting economics question and the answer to that question provides good insight. But that answer may be of little use to an entrepreneur (or to a manager) who focuses on other issues, such as is this a good business opportunity to pursue?.
Put a different way, my impression is that many students want to understand entrepreneurship as an insider understands it. They want an education in this area to assist them in the doing, after they graduate. This would be a very practical education. In contrast, economics of organizations is from the perspective of an outsider, who watches and then tries to come up with principles to explain what is going. For this to be of any value whatsoever, the principles must be applicable from one organization to the next. The approach is necessarily theoretical
Not quite seven years ago, when I was the Assistant CIO for Learning Technologies and working in CITES, I wrote a post called Is Economics Worthless?, which you might have a look at because I believe it is relevant today and takes on this subject. At the time I wrote that, I recall I was expressing frustration about other decision makers in CITES, who seemed to invent criteria to rationalize the decisions they wanted to make, rather than look at the decisions as problem solving, and then evaluating those decisions on how well they addressed the problems that were articulated. For example, the people who did the Networking had a pricing model for access that I recall was $22 per jack. It bothered me that demand didn't enter into the pricing. (Units in the College of Engineering would pay the same price as units in the Humanities.) Economic theory says demand should matter in a regulated price of this sort, with the more inelastic demand paying a higher price. But I could never get this point across. This type of behavior in CITES seemed best explained by B&D's political frame.
Indeed, one of the reasons we are reading the B&D book in addition to M&R is to give some practical ideas about organizations, even if they aren't economics. We'll definitely spend at least one class session, maybe more, talking about conflict - dealing with somebody who is hard to get along with, who is manipulating, etc. That's not economics. But it is super important and you probably won't get that elsewhere.
There is a further issue at root here, which is the ability to apply rather abstract economic ideas to very concrete situations, and being comfortable doing so. If you can do that, then the economics may be quite useful. But that sort of thing takes a lot of practice. Think about how many laps Michael Phelps had to swim to become an Olympic Champion. Metaphorically speaking, in this class we're at best dipping a toe into the water.
Nevertheless, I hope you are not too disappointed with this response. It's pretty standard fare that students want a practical approach to a subject while the instructor prefers a theoretical orientation. Knowing that at the start of the semester, perhaps each of us can get some of what we want.
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