Blog 13: Review and Critique

Taking a small, seminar-style economics class was an awesome challenge.  I have previously taken seminar-style course in anthropology, but economics is an area where often I never get the opportunity to talk to the professor in class, or critique the areas we are taught.  Usually, I feel I am taught material to memorize for the test.  This seminar approach allowed us to move beyond the economics and see how we actually apply what we are learning in the real world.

I felt that blog posts were helpful in terms of preparing for class, understanding the readings, and grappling with ideas.  I feel like blogs can be areas where students can explore interests, apply principles, and grapple with understanding.  In this way, I felt longer blogs and blog comments were useful.  On the other side, I felt like blogs should be critiqued a bit more leniently as students are trying to apply concepts that they may not have seen or not fully understand, but that their effort in trying to prepare their blogs should be recognized. 

I enjoyed having a smaller class, although I think having more like 15-20 students may have made conversation a bit more productive.  Still, our familiarity with each other made us more comfortable.  I also enjoyed the textbooks, particularly B&D, as well as all the added suggested readings the professor put on the website.  Oftentimes, they were really relevant to what was being taught, so I really enjoyed that.

I would have preferred if the class kept up a slightly faster pace, since at times it seemed to drag, and I think getting through the later sections of B&D would have been worthwhile to do in class.  Also, I personally would have done better with more text on the PowerPoints, because I understand concepts better if they are written. 

If I had to take something away from the class it’s that one needs to take multiple perspectives and behave in different ways in order to be an effective manager.  In economics, we’re often taught rationality rules, but often there seems to be more going on.  In discussing competing interests and human morale, topics such as politics actually made me respect the role they had in the workplace.  Before I would have said that I wouldn’t want to be political, but now I see that it is a tool that is neutral and must be used in order to be an effective manager. 

Blog 12: Competition in the Political Arena

Since there are many parties in organizations with differing interests and limited resources, often political arenas crop up within the organization.  For example, employees want job security, CEOs wants good pay, stockholders want solid returns, environmentalists want regulation, etc. In this political arena, the organization does not have one definitive path, but is a hodge-podge of competing interests that vie for resources and power.  At the University, sometimes the interests of the administrators and the students are not aligned.  In these junctions, oftentimes the administration wins out over the students’ desires. 

Last year, many graduate students were notified that taxes had not been adequately withheld from their pay and so, effective practically immediately, they would work the remainder of the year without stipends.  While this was a mistake on the university’s part, the indelicate manner in which it chose to resolve the issue left many graduate students scrambling to find funding for their basic living expenses.  The Graduate Student Association worked with students to help them find funding, but this was a challenging time.  In the wake of this, the administration appeared very aloof. 

   

For the past few years, tuition costs have been increasing steadily amidst the economic crisis that is causing more students to question their ability to pay for college.  While this is a difficult situation since it coincides with Illinois not paying the University was it was supposed to, which led it to force furlough days on professors to cut expenses, students are not often in a better position to pay for their education during this period.  This has caused considerable tension over the past few years with students demonstrating, complaining, and writing DI editorials to voice their side. 

In these instances, the ultimate power in determining the university’s course of action resides with the administration since it has primary autonomy in making all these decisions.  While students can resort to protesting, striking, or going to their student representatives, ultimately they generally do not have a strong say in what occurs in the administration.  This unbalanced power allows the more powerful entity, the administration, to emphasize their interests at the expense of students’ interests.

To fix this, students should be given a sort of “Presidential” power in the sense that they can veto actions taken by the administration that students deem deleterious.  Perhaps, 2/3 of the student body would have to veto in order for it to go through.  Assuming it does, the administration’s actions would be blocked.  Students could also propose things that the administration could vote on.  Giving students the right to veto would help emphasize students’ interest in the University’s decisions, but could perhaps still protect the administration from potentially giving students the reigns to run the campus.  In this instance, both groups would be forced to either work together, or take each other into account. 

Political arenas are common; from towns, to schools, to businesses – differing interests often vie for limited resources that go to those with the most power.  This makes participating in these organizations complex, requiring participants to map the political landscape and strategize how to get their interests represented effectively and enacted.  Having a good idea or being morally “right” is not enough, one must acknowledge politics exists and behave accordingly in order to be effective in these situations. 

Blog 11: Strategizing in Leadership

In high school, one of my friend’s was dead-set against trying to study for her exam because she felt like she would do poorly anyway (her last exam didn’t go well, although her study habits weren’t great).  Being in the same class I realized I could help her study.  However, suggesting we study wasn’t going to be effective unless I boosted her confidence about what she had already mastered in the class.  So my strategy was to ask her a few quick questions about stuff I knew, but feigned to not know that were simple and that she could answer so that she would be more apt to try to answer as opposed to becoming overwhelmed with multistep problems.  I then thanked her profusely, which I hope would help her feel competent.  Then, I suggested that we should study together and when she objected, I broke the study sessions up so that she wouldn’t get overwhelmed in one sweeping final review study session.  Since this was a couple weeks before the exam, it worked out well.  

This gave her better study habits and allowed her to break down overwhelming concepts into more manageable bits, which we could go over.  It also made her accountable for reading the chapter before class so that she would have at least a basic understanding of what was going on.  While helping her, I made sure I broke down concepts, made studying fun through socializing, and didn’t make it a big deal if she was struggling.  Instead, I treated it with a low-key, attitude, which allowed her to become more able to apply and master the concepts on her own without giving up.  By the time the test came around, she really seemed able to do the exam, and excited by her knowledge.  

Being able to strategize how to make her more agreeable to both get on a study schedule and not give up on concepts she didn’t immediately grasp probably made the difference between her actually studying for and succeeding in the class versus not.  I realized that a lot of what was holding her back in the class was mental after having not done the first exam well, so knew that boosting her confidence to feel as though she could master the material was just as important as actually getting her to learn the material.  Thus, I tried to do this throughout the process in subtle ways.  

This post was supposed to cover the interrelated nature between being an effective politician and leader.  Often these two labels are given polar opposite connotations, with one being bad and associated with unlawful backroom deals, while the other emphasizes empowerment, passion, and ethics.  However, in order to be an effective leader, one must be able to interact in a political way with strategies to help accomplish anything in a group with differing interests after scarce resources.  Thus, while many view Bill Gates as a great leader, he is also a politician in the way in which he built his company.  It is also interesting to see how the two must be compatible in the presidential election.  To elect our nation’s leader, we come up with political campaigns that involve segmenting constituencies and effectively talking to key people.

Blog 10: Power, Information, and Persuasive Influence

In life, there often seems to be many relationships that are bound by power dynamics on some level or another.  Sometimes, they can be obvious as with adults and children, while other times even friends’ behaviors can relate to power dynamics.  As a middle school student, I had an art teacher who was very friendly and creative.  Through the power originating from her position and her expertise, she determined what the students’ project themes would be and the due dates they would need to be accomplished by.  The whole class would work on related projects in the same medium before changing to a different project, theme, and medium. 

One of the projects that she had the students complete was to paint a portrait of an animal in acrylics.  It could be wild or domestic, but had to include the elements of art in the way the painting was composed.  While painting animals sounded okay, I was not particularly fond of spending a lot of time painting an animal, but rather wanted to do something that I thought would be more interesting and challenging to do accurately: a human.  So, I approached my teacher and asked if I could paint a human.  She thought it was a good idea and so I was allowed to do it.

While my teacher held the power to determine what painting subjects would be permissible, I was able to influence what she considered appropriate to paint for the project (at least when it came to myself) in this situation.  Particularly, I believe the fact that we were on great terms and mutually respected each other helped.  Also, she knew that I genuinely liked art since I was in the art club and often came after school to complete assignments.  This may have also influenced the way she was able to perceive both my capabilities and sincerity in terms of trying to paint a person.  I think this helped a lot in terms of her agreeing to my suggestion. 

My power came through my experience with her, where she learned to trust my judgment and skill through working with me.  As we discussed in class on Tuesday, a person may be able to better judge a person by putting them on a probationary period where they see them work or where they get recommendations from someone the potential employer knows and trusts.  This will help the person in power make a better decision than might otherwise be made.  Our joint experience and working relationship may have given me an advantage that allowed me to influence my teacher to give me an exception. 

This prompt may be about where power comes from.  Power often can come from an official title, such as being a manager.  Power in a work environment may be used to discipline others, as well as reward others.  It can be based on an individual’s expertise or his/ her personal standing within a group (ex. being respected).  All of these bases for power determine who has the authority to make decisions over scarce resources.  At the same time, other people may be able to influence these decisions through their own expertise, standing, being liked by the person in power, etc.  This ability to influence may be seen as either an individual source of power, or may be the focus of politics, which can be seen as acting to gain decisions and power to further one’s individual interests.  IN this sense, power and politics are inherently linked to many aspects of the world, including work and day-to-day life.

Blog 9: Commitment and Communication: The Idiosyncratic Nature of Teamwork

     School often has many group projects in it.  More often than not, it seems that these projects bring increased stress, but not a lot is gained through effective group cooperation or utilizing individuals’ talents to further the knowledge that goes into a project.  Sometimes, though, group work really seems to both lighten the workload of a multistep project, while engaging students to complete a project that is superior to that created when working alone.  Often, the difference between working together well and poorly has to do with commitment and responsibility to the project rather than inherent ability.  

     In one of my science classes, the professor divided us into teams randomly into what was soon to become one of my least favorite group projects.  The two guys I was with were friends with each other, and knew me well enough to know that I was a motivated student.  Since they came to recognize this, they behaved as though I would do the work and they would go talk to some girls they knew during the class time we were supposed to be using to work on the project.  I was left sitting alone working on the experiment.  While I asked them to help me, they generally speaking were unmotivated.   Communicating with them outside of school was frustrating, as we communicated through email, which took days for people to respond to, often in an inconclusive way.  Thus, it was really hard to pinpoint times to meet.  When times were pinned down and everyone agreed, still it was not a guarantee as to who would show up.  The project turned out alright, but left me angry and bitter about having to work with them. 

     Their commitment to completing the project was not the same as mine.  While I am okay socializing while working in groups, I am not okay sitting alone while doing “group work.”  The frustration that came from acknowledging I was being dumped on and being unable to do anything about it (I had asked the teacher to switch groups or work alone unsuccessfully), led me to resent them and eventually get angry.  Both of us knew that it was not credible for me to claim that I wouldn’t do work until they helped, because they knew that I wanted a good grade.  While I think that it was probably differing commitment to the project rather than personality that accounted for the situation, it may have been that their personality led them to view commitment to a group project that they weren’t interested in to be low on their priority list.  Another factor that may have played a roll was that they were friends, while I didn’t really know them that well, which may have encouraged them to have a focus on themselves, not on the team as a whole. 

While that was an unusually severe case, many cases in college are significantly better.  In a different class, students were randomly assigned to groups of four where we had to create a large research report based on primary and secondary research.  The group I was in was really committed to doing an equal share of the work.  We used Google Docs to create papers and communicate with issues we were having, effectively emailed each other, and showed up for meetings.  Once a week, we would get together to discuss what we individually accomplished, what needed to be done both individually and in the group setting, and compiled what we had.  It was a time to stay motivated, as well as be accountable.  Often tasks were broken down based on strengths an individual had such as creating PowerPoints, transcribing interviews, etc.

Working in a group situation where the members are committed to equally sharing the burden of the project to get a better grade was enjoyable.  I was really impressed with how much we had accomplished by the end of the project, especially considering how we broke up the work to make it more manageable.  Communicating effectively both in terms of setting up meetings and in terms of what needed to be accomplished in the weekly check-up meetings was very useful and became a tool rather than a frustration.  The group’s overall commitment led to more effective regulation within the group in terms of keeping everyone accountable. 

Working in groups can be a successful experience, but sometimes there needs to be checks and balances so that a project turns out successfully.  Perhaps teammates must all value what they are trying to accomplish and feel responsible for getting it done.  Communication channels should be as quick and effective as possible so as to avoid wasted time spent in limbo waiting for necessary responses.  These, as well as other transaction costs associated with coordinating meetings, and motivating peers to stay on top of their responsibilities plays a large role in the overall ease with which a project is completed.  A can-do attitude goes a long way in helping to lessen these transaction costs. 

Since many jobs today require group projects, it can be useful to reflect what makes a group effective or not in terms of how the group viewed the experience, as well as the overall product.  Understanding that groups require added transaction costs that can be idiosyncratic to each group is interesting and probably leads to areas of study on group dynamics.  Still, practicing working in groups may help individuals learn to naturally read others motivations, weaknesses, and strengths.  This may allow them to take steps to lower transactions costs associated with group work so that the project goes more smoothly.  Since, working in teams offers synergy and the possibility to create something better than individual’s working separately, knowing how to make teamwork as efficient as possible is an important skill set to have.

    

Blog 8: Company Interests' Influence on the Stickiness of Wages

The recession’s impact on labor demand can be seen in terms of employee compensation.  Still, compensation does not accurately represent the shifts in labor demand due to sticky wages, which may result from a company’s goals regarding compensation.

 A family friend kept has been at her job for almost 30 years.  Within the past five years, she has continued working for her company (a foreign language magazine on food) as an international marketer.  However, with the recession and decreasing demand, wages were cut 25% across the board and workers were given Fridays off in the summer months. 

The possibility that there was a decrease in aggregate labor demand did not cross my mind, perhaps because it seems more common to discuss wage cuts as related to output, which is related to aggregate demand from customers for products in the news.  Still, the two are related measures since the aggregate demand for output would correlate with the aggregate demand for labor in the short-run where machines are not used as a substitute for labor. 

Regardless, I am not sure that the company did this in order to take advantage of the decrease in demand for aggregate labor for two reasons.  First, the company, as evidenced by the friend, tends to retain loyal, successful workers.  Suddenly paying less simply because they can may discourage workers from putting forth effort, or make them think that retiring is a more viable option.  This may occur even if the demand for labor decreases in the aggregate.  At the same time, employee morale may also be hurt if workers were fired.  Thus, lowering salaries across the board may be seen as responsibly retaining the workforce in times of decreasing output and revenues, instead of exploiting decreasing demands for labor.   Pruning its workforce may also have an impact on the reputation of the company, which may discourage talented individuals from applying to the company in the future.  Thus, lowering employee salaries would be seen as both negative in terms of effort as well as positive in terms of retaining employees. 

Second, the fact that they didn’t downsize, but are trying to retain all workers suggests that while there may currently be a decrease in aggregate labor demand, the company views its current employees as assets that are not the same as any other employee looking for a job.  Perhaps the investment the company has made in training the employees in order to increase the human capital it has at its disposal may encourage the company to retain its workers.  The human capital is a useful asset and having new employees acquire it could be costly.

Another family friend works as a dentist.  Due to the recession, business has been down by 30%.  This correlates more or less with the decrease in his income (fixed costs are not relatively large).  In addition, it has caused him to attempt to stimulate demand for his services through advertising in the local papers. 

If aggregate labor demand is viewed as more or less equivalent to aggregate demand for goods and services, then in both examples, the workers faced wages that were responsive to these changes.  Between the two, the dentist’s wages were less sticky and more responsive to demand, because every client demanding a services that correlates with labor and determines his income, whereas the friend in marketing had her pay (and all her associates’ pays) cut by an equal amount that may or may not exactly correlate to what the demand that the company has for labor for that particular month.  The company may have a higher or lower demand, but wages change more slowly.  Also, the company may have other goals in terms of lowering pay that may make it not correlate exactly to labor demand such as retaining employees, keeping talented workers, and maintaining employee morale.  All these factors may influence the company to determine the pay scale in terms of factors other than aggregate labor demand. 

The purpose of this prompt was to examine how wages vary with the aggregate demand for labor as well as understand some issues that may influence how “sticky” wages are in the face of changing demand.  Imperfect correlation appears in employment relations more often where management’s decides what determines compensation.  This can mean that employers try to maintain wages at a higher level to retain talented individuals or that wages may be completely pulled if a company lets an employee go.  In independently run businesses, the owner/worker may have less sticky wages (either by the hour or in terms of annual income) due to their work being more closely tied to output and their incentives correlating with output more completely.  Thus, compensation in this instance may not tend to over or under compensate owners as much as employees who are dependent on a paycheck.

Blog 7: Incentives to Motivate And Belief's Role in Risk Aversion

Altering incentive schemes does change employee behavior.  If effectively chosen, an incentive will motivate workers to effectively complete all duties associated with their job in a timely manner.  While working in a commercial kitchen, my boss allows the dinner shift workers to leave as soon as our responsibilities are completed.  In this way, the workers really keep pace and are motivated to finish fast so as to get out before 7PM.  This is contrasted with the lunch shift, which works more by the clock rather than by the time incentive to accomplish one’s duties.  Here, the workers will sometimes shirk their responsibilities. They may start spending a long time eating and not finishing their chores before they leave.  

This is why the dinner shift’s incentive scheme is really effective.  It makes work more fun, because it becomes a kind of game for the workers to strategize on the fastest way to accomplish tasks.  This makes work more pleasant and incentivizes the workers to work quickly and stay motivated.  If this reward scheme weren’t in place, the workers start slowing down and dishes pile-up.  Since the boss does monitor the responsibilities (putting away pots, washing dishes, prepping the dining room, mopping, throwing out the garbage, overseeing the dining room during the meal, etc.), it is difficult to misuse the incentive by  half-heartedly completing the work (i.e. bring back dirty pots, skip mopping).  For the work both lunch and dinner crew must complete, it must be done well.  Still, the motivation to accomplish all duties within the shift without having the next shift pick up the slack can be an issue, which incentive schemes can help manage.

In terms of being risk-averse regarding grades, I tend to be more averse regarding uncertainty.  In order to have less uncertainty, I do all the readings and assigned homework, instead of skimming the text.  I also attend all the lectures, unless I am ill.  Finally, I really try to get high grades early so that there is more certainty as to the grade I will get when it comes to finals, so I do not worry about the grade I will receive when studying.  Even if a professor simply is reading off of the PowerPoints, I still go, because I find that just listening to the notes helps me to remember them.  I tend to rely on myself in order to reduce uncertainty in grades.  For example, I try not to miss taking notes, because I don’t trust that other people’s notes are as useful to me as my own.  I also do not rely on a professor’s study guide, but instead attempt to learn all the material.  Too often, I’ve seen students who are upset when a topic that wasn’t on the study guide ended up on the test.  Additionally, I really study and try to learn and understand as much material as possible, even if I know it won’t be on the test, because I believe that it helps me to gain a broader understanding of the material that will be tested.

I know some people who take courses based on how easy the professor is supposed to be, even if they are not interested in the topic.  I do not do this; instead, I view it as more useful to my time to take something I am interested in.  At the same time, I think my sense of risk aversion encourages my decision in the sense that I am more likely to enjoy learning the material for its own sake and really trying to understand it, which leads to better grades.  I was raised with the mantra, “Learn the material and the grades will be there.”  According to this, I am encouraging good grades and trying to avert bad ones by only taking courses I am interested in or feel will be useful to me.  This is in spite of the fact that I am taking courses that may be significantly more difficult, require more work, and have no assumption of an easy grade. What do you guys think?  In light of my beliefs, is this a rational, risk-averse behavior?  Or is this possibly an example of increased risk tolerance?

The purpose of this prompt is to focus on how incentives alter workers’ behaviors in the work environment.  This includes how the incentive works to (in) accurately measure worker performance. The design of the incentive is important, because it will determine what a worker is motivated to do, regardless of whether it is useful for the company.  Thus, it is important for the incentive to align with an accurate portrayal of employee performance.  Risk aversion focus on how risk aversion also influences workers behaviors in order to protect them.  In this sense it is similar to an incentive.  At the same time, it can go against incentives that a student may have in taking a class, such as taking a class in order to acquire a new skill in computers science to put on a resume in order to achieve a better grade in the class.  Understanding incentives and risk aversion in employees is a useful skill in order to best motivate them to achieve company goals.