I'd like to spend some time tomorrow before the presentation discussing the contents of this post, meant as a reaction to the student posts this week, before we get into the presentation. B&D are quite comprehensive in their views of power and its sources, but many other people, myself included, take a more limited view, in part because I distinguish "agency," the ability to do things for oneself including in a social context, from power, defined here as getting others to do things for you on your behalf. Not everyone makes this distinction. But I think it helps here. In the process I'll mention some things to read, simply to be well read, not really for the course.
First, there is the animalistic view of aggression, as exemplified in On Aggression, by Konrad Lorenz, where he develops a notion called territoriality. This is for intra-species competition. As most of you are aware, I'm sure, there is a related concept called the alpha dog, which implies dominance in a social setting. Much of this dominance works through intimidation qua posturing, rather than overt acts of violence. So dogs growl and peacocks strut.
This view of power as aggression translates in a pretty straightforward way to thinking about military power. Clausewitz, the well known military theorist, wrote On War, around the time of Napoleon. He is known for having said, "War is the continuation of Politik by other means." With that it, it is again straightforward to extend aggression into the political arena. The TV show Hardball, on MSNBC, has its name to reflect that politics can be like baseball. In baseball, sometimes the pitcher throws at the batter, to get the batter to back off the plate. (Getting beaned, the batter having the baseball hit him in the head, can be quite dangerous.) That type of pitching is an act of aggression. There are analogous actions in the political sphere. (Think about last summer before the Debt Ceiling limit was raised.)
There is a related source of power that you might call Judo, which uses the strength of the other person to achieve your own ends. One example to illustrate, after the birth of their first child new parents are anxious about the baby's welfare. The baby, almost helpless but not fully so, can have power over the parents in certain situations. Can you figure out how that works? Incidentally, some of my Facebook friends are moms with pre-teen children so I get to see their posts about older kids trying to play the same game and the parents steely resolve (I don't really believe that) not to let the kids do that.
Let me switch gears and talk about power in a collaborative setting. Though B&D mention it, it's not really their focus. For my own edification, I'm now reading a rather old book called Creative Experience, by Mary Parker Follett. It is freely available online (as page images). Chapter X is on power, and when that is a legitimate concept. Follett distinguishes between "power over," which is what we've been talking about above, and "power with" which she believes is integrative, accounting for the welfare of all parties and identifying a solution that incorporates their interests. She distinguishes such solutions from "compromise," which she treats as a type of surrender. Some of the posts this week were in the spirit of Follett, though in the examples I don't believe the preferences of the participants were opposed. If we all agree at the outset, then it is not possible to identify from the example who has the power. By the way, Follett denigrates power over and refers to it as pseudo power, because the solution it generates tends to fracture eventually. The Arab spring is an obvious example to make her point. So she views power with as the only true power.
On a normative plane (how things should work) I agree with Follett. But from a positive perspective (how things actually work) I have to say much of the exercise of power is power over. It remains prevalent. Though Follett's book was originally published in 1924, not everyone has learned their lessons from her. Alternatively, power over can endure quite a while until the fracture happens. Many of us have a rather short time horizon to consider our behavior, so power over can seem quite effective.
Showing posts with label 03. Weekly Reflections. Show all posts
Showing posts with label 03. Weekly Reflections. Show all posts
Wednesday, April 11, 2012
Monday, March 26, 2012
Instead of evaluation of comments....
...I constructed this comment matrix. This is only measuring who commented on posts. It doesn't say anything at all about comment quality. We'll discuss this briefly tomorrow.
Monday, February 13, 2012
Misgivings about information efficiency - what management does and what it should do.
Let me start with some of my own shopping behavior. I occasionally do grocery shopping for the family My store of choice is Schnucks, mainly because I understand their layout. One curiosity I've noticed is that in the aisle with cocktail olives (for martinis) you can also find peanut butter. I consume both of those items but in my view of the world, they don't go together and I don't consumr them at the same time. Cocktail peanuts do go with cocktail olives (the appropriate munchie to accompany the martini) but you won't find cocktail peanuts in this aisle. They are in the aisle with the potato chips and other snacks. Cocktail olives also go with whatever liquor is used to make the martini. So you might envision the olives in that section. But you'd be wrong. Some people do put cocktail olives into salads, so conceivably you'd find them in that part of the store, but that too is not the case. For me its a mystery why they are with peanut butter in the same aisle, one I'm not likely to solve soon.
Stores like Schucks now generate a huge amount of data via the checkout process. Every item has a bar code on it. Every item gets scanned at checkout. This is an incredible boon, not just to getting through the line quicker, but also for inventory management. The store gets a much better sense of what merchandise it is moving and what remains on the shelves. So for restocking standard items, this is fantastic. Does it help the store think through where items should be located? I know from the little I've read about marketing in grocery stores, that the buyer should see fresh produce when he first walks in and that milk and fresh meats should be in the back of the store. There are known buyer behaviors that support these product location choices. What about other such choices? Are those choices driven by data - let the numbers do the talking? Are they driven by some conception of the shopper that may or may not be supported by the data? Or is it something else?
More generally, with this shopping as only one example of the bigger picture, are we talking only about making small tweaks in an already well defined model? If we are, does that really require human discretion, or can it all be computerized and run by algorithm? If it can be done by computer, it would seem more information is better, in contrast to what the book says about information efficiency. With a higher dimensionality of information, one can be more precise about the actions that need to be taken. That is one way to think of what's going on.
Now I want to give a completely different perspective. For this one, you can imagine you are a medical doctor who has a patient come in to see you with a variety of complaints. One of the things you need to determine is whether it's all minor stuff, some topical treatments and perhaps an inexpensive prescription will do the trick, or if it is a major illness, requiring either substantial surgery or a very invasive treatment regimen. Further, if it is the latter, you may have to come to a decision rather quickly, because long delay can cause the situation to deteriorate further. In this same manner you can imagine you are a different type of doctor, the Chairman of the Federal Reserve, with the patient being the entire U.S. economy. You need to determine again whether the economy is basically healthy or if there are some serious underlying issues that need fixing.
Suppose in particular that you are Alan Greenspan and it is back in late 2004 or early 2005. If you thought the economy had a serious illness in it back then, could you have prevented the meltdown from happening a couple of years later?
This diagnostician has a huge amount of information at his fingertips. Much of it is digital in nature but - financial information about prices and quantities regarding bank balance sheets. But you also have a huge amount of analog information - reflecting the attitudes of the circle you trust and the information that is shared within that circle.
In retrospect, where vision is always 20-20, Greenspan blew it completely on the economy. According to the macro economist John Taylor of Stanford - the Fed held down interest rates for too long. That induced the bubble. The Fed also had regulatory authority it didn't exercise about the subprime market. Greenspan didn't see the need to change what he was doing, because he thought it was working well.
It turns out that on making the judgment of how the patient is doing, a big part of the issue is the framework that is used to process the available information. In Greenspan's framework (you can call it a mental model), the higher ups in the big financial houses had a strong self-preservation instinct, not just for themselves but also for the organizations where they worked. This self-preservation instinct meant these people would self-regulate their own organizations to keep them healthy. Greenspan therefore couldn't imagine taking on bad debt for near term gain. He therefore so no reason to sound the alarms.
I call this type of behavior believing in myth. I think we all do this to some extent. The issue arises when the myth comes into conflict with some available evidence. Then something must go. When it is the myth that goes, I call that behavior being empirical. One then needs to come up with a different framework to explain what is going on. You'd like to believe that science works that way. However, it sometimes happens that what gives is the evidence, and the myth survives. In this case, you have to wait for a catastrophe to see what is happening, and then you can go back to the evidence earlier and note you might have seen it earlier too, had you not been blocked by an erroneous framework.
The Lessons from Tal Afar has this aspect as well. The crucial question there was whether there was an insurgency or not. One gets a completely different military strategy when there is no insurgency than when there is an insurgency. The latter seemed to produce much better results.
It may be that the big thing senior management does is communicate a framework on which to hang all other decisions. Then information flow from the spokes back to the center can be seen in part as a way to support the effectiveness of the framework or to demonstrate the flaws in it. If this is right, then a further management task is to make adaptations in the framework or wholesale changes in it, when those flaws become apparent.
Armed with a reasonable framework, then one should be able to determine what resources are necessary and what actions need to be taken to be successful. There may have to be lots of minor tweaks to the recommendation, to match the situation on the ground, which is likely in flux. Those tweak things are not the focus of the senior management. It is middle management that does the tweaking, or the task is automated.
Does the information efficiency concept in the book survive if we're talking about management by selection of a framework? Perhaps it does, but here the arena is the verification part. If the complexity is too great, one can't tell whether the framework is useful or not. In a simpler environment one can tell. Information efficiency then says to get the simplest framework possible that will really test the whether the framework is applicable.
Stores like Schucks now generate a huge amount of data via the checkout process. Every item has a bar code on it. Every item gets scanned at checkout. This is an incredible boon, not just to getting through the line quicker, but also for inventory management. The store gets a much better sense of what merchandise it is moving and what remains on the shelves. So for restocking standard items, this is fantastic. Does it help the store think through where items should be located? I know from the little I've read about marketing in grocery stores, that the buyer should see fresh produce when he first walks in and that milk and fresh meats should be in the back of the store. There are known buyer behaviors that support these product location choices. What about other such choices? Are those choices driven by data - let the numbers do the talking? Are they driven by some conception of the shopper that may or may not be supported by the data? Or is it something else?
More generally, with this shopping as only one example of the bigger picture, are we talking only about making small tweaks in an already well defined model? If we are, does that really require human discretion, or can it all be computerized and run by algorithm? If it can be done by computer, it would seem more information is better, in contrast to what the book says about information efficiency. With a higher dimensionality of information, one can be more precise about the actions that need to be taken. That is one way to think of what's going on.
Now I want to give a completely different perspective. For this one, you can imagine you are a medical doctor who has a patient come in to see you with a variety of complaints. One of the things you need to determine is whether it's all minor stuff, some topical treatments and perhaps an inexpensive prescription will do the trick, or if it is a major illness, requiring either substantial surgery or a very invasive treatment regimen. Further, if it is the latter, you may have to come to a decision rather quickly, because long delay can cause the situation to deteriorate further. In this same manner you can imagine you are a different type of doctor, the Chairman of the Federal Reserve, with the patient being the entire U.S. economy. You need to determine again whether the economy is basically healthy or if there are some serious underlying issues that need fixing.
Suppose in particular that you are Alan Greenspan and it is back in late 2004 or early 2005. If you thought the economy had a serious illness in it back then, could you have prevented the meltdown from happening a couple of years later?
This diagnostician has a huge amount of information at his fingertips. Much of it is digital in nature but - financial information about prices and quantities regarding bank balance sheets. But you also have a huge amount of analog information - reflecting the attitudes of the circle you trust and the information that is shared within that circle.
In retrospect, where vision is always 20-20, Greenspan blew it completely on the economy. According to the macro economist John Taylor of Stanford - the Fed held down interest rates for too long. That induced the bubble. The Fed also had regulatory authority it didn't exercise about the subprime market. Greenspan didn't see the need to change what he was doing, because he thought it was working well.
It turns out that on making the judgment of how the patient is doing, a big part of the issue is the framework that is used to process the available information. In Greenspan's framework (you can call it a mental model), the higher ups in the big financial houses had a strong self-preservation instinct, not just for themselves but also for the organizations where they worked. This self-preservation instinct meant these people would self-regulate their own organizations to keep them healthy. Greenspan therefore couldn't imagine taking on bad debt for near term gain. He therefore so no reason to sound the alarms.
I call this type of behavior believing in myth. I think we all do this to some extent. The issue arises when the myth comes into conflict with some available evidence. Then something must go. When it is the myth that goes, I call that behavior being empirical. One then needs to come up with a different framework to explain what is going on. You'd like to believe that science works that way. However, it sometimes happens that what gives is the evidence, and the myth survives. In this case, you have to wait for a catastrophe to see what is happening, and then you can go back to the evidence earlier and note you might have seen it earlier too, had you not been blocked by an erroneous framework.
The Lessons from Tal Afar has this aspect as well. The crucial question there was whether there was an insurgency or not. One gets a completely different military strategy when there is no insurgency than when there is an insurgency. The latter seemed to produce much better results.
It may be that the big thing senior management does is communicate a framework on which to hang all other decisions. Then information flow from the spokes back to the center can be seen in part as a way to support the effectiveness of the framework or to demonstrate the flaws in it. If this is right, then a further management task is to make adaptations in the framework or wholesale changes in it, when those flaws become apparent.
Armed with a reasonable framework, then one should be able to determine what resources are necessary and what actions need to be taken to be successful. There may have to be lots of minor tweaks to the recommendation, to match the situation on the ground, which is likely in flux. Those tweak things are not the focus of the senior management. It is middle management that does the tweaking, or the task is automated.
Does the information efficiency concept in the book survive if we're talking about management by selection of a framework? Perhaps it does, but here the arena is the verification part. If the complexity is too great, one can't tell whether the framework is useful or not. In a simpler environment one can tell. Information efficiency then says to get the simplest framework possible that will really test the whether the framework is applicable.
Tuesday, February 7, 2012
Getting rhythm - Control by folks at the edge
I thought today's class session had a better feel than previous sessions, especially the early discussion where we just talked without the PowerPoint. The basis for that was your blog posts, which allowed a launch point from which we could push the conversation further. I will spend some time thinking about this week's prompt with an attempt to sustain and improve on that for next week. I hope you can also give some thought to how the discussions would increase in value and get the students to do more of the driving of the conversation.
I do want to reiterate here that for students who hadn't commented on other student posts, please do so before Thursday's class. The expectation is that you will comment on a team member's post and then one other post by a student not on your team. I'm sure each of you will like receiving comments on what you have written. And if you do enjoy getting them, it should help you in writing interesting comments. As with the in class conversation, the goal is push the discussion forward, get the writer to reflect a bit on what they wrote - did he or she really mean what was said, can more context be given to make the point sharper - and if there is an area either of consensus or disagreement to accentuate that. Perhaps some of it should be brought into the in class discussion.
I next want to give my perspective on the undergraduate student research issue. Please note this is only my view. I don't speak for the Econ department on this. But I do have rather strong views on this matter. Let's first look at the demand side of this and peel it a bit. Why do students want to do research projects with faculty members? Possible reasons are because they expect to do other econ research in the future and this is a way to get started with that, because they would like to engage with a faculty member in a one-on-one basis outside of the class setting, or to earn a credential that presumably will be of some benefit for the student. All three of these make sense if the student wants to go to Econ grad school. In our class, I don't believe anyone is in that category. I can see the second one continuing to make sense otherwise, but if the first one doesn't make sense I don't really understand why the third should. I'll get to that second one a little more in a bit.
On the supply side there is first the question of whether doctoral students in Econ who want to do research get well matched with faculty. When I was an active Econ faculty member, this matching was imperfect, with some students not finding a research opportunity. (Indeed, many students are TAs to pay the bills. Even if they would find being an RA more rewarding, there weren't enough of those to go around. Prior to the writing of the dissertation, I believe that being involved in a research project without being an RA is kind of rare.) There is a different issue about whether the student is well prepared to engage in the research and what training provides good preparation. I don't have a good general answer for this but for me as the researcher, I'd want the student to have had a course from me already that is relevant for the research and then I'd want the student to have shown me something in the course. This should be a two-way street. Each party needs to benefit from the relationship.
Related to that benefit, there is the question of whether incentives are put in place for the faculty member to support the activity. I'm not current on this so what I say is dated, but when I was fully involved in the department, the metric that one reported on the CV for salary increases or for promotion was dissertation committees involved in and in particular being the student's main adviser. That did matter. I don't know if the practice has changed since, but having undergraduate students as research assistants didn't count. If it doesn't count, then from the faculty member's perspective this is burden without reward. I know I've talked a lot about being a good citizen in class, but there are limits to that, particularly if the function otherwise doesn't seem to have value. Doing the activity so the student has a credential and that being the sum total of the benefit, why bother? You're a good citizen because you agree with the goal the good citizenship is supposed to promote.
I believe these issues are quite different in the laboratory sciences, where the research lab may have some jobs that are suitable for undergraduates, so they can begin their apprenticeship that way. In Econ, however, I really believe that it would be better to have undergraduates involved with the teaching. In the 1990s, I heavily relied on undergraduate TAs, who conducted online office hours. The institution didn't have a credentialing way of rewarding the behavior, so the students earned an hourly wage for doing the activity. The students treated the activity as a reward, took it seriously, and were effective in that role. I believe many of the students currently taking the class benefited from the approach. And they were able to have regular interactions with me. Further, I only needed to do a modest amount of training for them, because each of them had previously taken the class, so they could see how the model worked from that experience.
I think the institution as a whole should move that model in a big way, but currently it is esoteric. I could do it in intermediate micro, because that course didn't have graduate TAs. By teaching a larger lecture (180 students instead of 60 students) I could free up enough resources to pay the undergrads (and have the department net some dollars in addition)! The practice, however, didn't persist after I became a full time administrator.
One general lesson from this, applicable to our course, is that there are many institutional arrangements, such as the undergraduate research project, that aren't fully engineered to make it work for all parties involve. When that happens, the organization looks dysfunctional and unfeeling. I think you're seeing some of that.
I do want to reiterate here that for students who hadn't commented on other student posts, please do so before Thursday's class. The expectation is that you will comment on a team member's post and then one other post by a student not on your team. I'm sure each of you will like receiving comments on what you have written. And if you do enjoy getting them, it should help you in writing interesting comments. As with the in class conversation, the goal is push the discussion forward, get the writer to reflect a bit on what they wrote - did he or she really mean what was said, can more context be given to make the point sharper - and if there is an area either of consensus or disagreement to accentuate that. Perhaps some of it should be brought into the in class discussion.
I next want to give my perspective on the undergraduate student research issue. Please note this is only my view. I don't speak for the Econ department on this. But I do have rather strong views on this matter. Let's first look at the demand side of this and peel it a bit. Why do students want to do research projects with faculty members? Possible reasons are because they expect to do other econ research in the future and this is a way to get started with that, because they would like to engage with a faculty member in a one-on-one basis outside of the class setting, or to earn a credential that presumably will be of some benefit for the student. All three of these make sense if the student wants to go to Econ grad school. In our class, I don't believe anyone is in that category. I can see the second one continuing to make sense otherwise, but if the first one doesn't make sense I don't really understand why the third should. I'll get to that second one a little more in a bit.
On the supply side there is first the question of whether doctoral students in Econ who want to do research get well matched with faculty. When I was an active Econ faculty member, this matching was imperfect, with some students not finding a research opportunity. (Indeed, many students are TAs to pay the bills. Even if they would find being an RA more rewarding, there weren't enough of those to go around. Prior to the writing of the dissertation, I believe that being involved in a research project without being an RA is kind of rare.) There is a different issue about whether the student is well prepared to engage in the research and what training provides good preparation. I don't have a good general answer for this but for me as the researcher, I'd want the student to have had a course from me already that is relevant for the research and then I'd want the student to have shown me something in the course. This should be a two-way street. Each party needs to benefit from the relationship.
Related to that benefit, there is the question of whether incentives are put in place for the faculty member to support the activity. I'm not current on this so what I say is dated, but when I was fully involved in the department, the metric that one reported on the CV for salary increases or for promotion was dissertation committees involved in and in particular being the student's main adviser. That did matter. I don't know if the practice has changed since, but having undergraduate students as research assistants didn't count. If it doesn't count, then from the faculty member's perspective this is burden without reward. I know I've talked a lot about being a good citizen in class, but there are limits to that, particularly if the function otherwise doesn't seem to have value. Doing the activity so the student has a credential and that being the sum total of the benefit, why bother? You're a good citizen because you agree with the goal the good citizenship is supposed to promote.
I believe these issues are quite different in the laboratory sciences, where the research lab may have some jobs that are suitable for undergraduates, so they can begin their apprenticeship that way. In Econ, however, I really believe that it would be better to have undergraduates involved with the teaching. In the 1990s, I heavily relied on undergraduate TAs, who conducted online office hours. The institution didn't have a credentialing way of rewarding the behavior, so the students earned an hourly wage for doing the activity. The students treated the activity as a reward, took it seriously, and were effective in that role. I believe many of the students currently taking the class benefited from the approach. And they were able to have regular interactions with me. Further, I only needed to do a modest amount of training for them, because each of them had previously taken the class, so they could see how the model worked from that experience.
I think the institution as a whole should move that model in a big way, but currently it is esoteric. I could do it in intermediate micro, because that course didn't have graduate TAs. By teaching a larger lecture (180 students instead of 60 students) I could free up enough resources to pay the undergrads (and have the department net some dollars in addition)! The practice, however, didn't persist after I became a full time administrator.
One general lesson from this, applicable to our course, is that there are many institutional arrangements, such as the undergraduate research project, that aren't fully engineered to make it work for all parties involve. When that happens, the organization looks dysfunctional and unfeeling. I think you're seeing some of that.
Monday, January 23, 2012
Reactions to the first set of posts
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.
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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