Transaction Costs in Organizations
When I was in high school, I was very involved with running. I ran varsity all four years for the cross-country, winter track, and spring track teams for my high school. With this, I it is safe to say that my life almost revolved around this organization. I decided when to do my homework, when to relax, when to go on family vacations, and what classes to take based on advice from my teammates and the general practice and meet schedules. Given what we discussed in class about transaction costs, I think the most important one I faced would be when purchasing shoes. Our coach owned Marathon Sports, which is known to help runners find the perfect fitting shoe; however, this comes at a steep price. Many people on our team would purchase shoes at outlet malls and other places, and they would eliminate the transaction cost: they did not pay a higher fee to ensure that the shoes they purchased were ideal for their general posture. Another important point with Marathon Sports is that our coach viewed people differently. Obviously, it was his store, and to promote revenue he would love to have the entire team shop there. I noticed that decisions of who to put in relays, especially when times and talent were negligible, came down to who supported his store at times. I do not believe that is fair, but paying that extra price can foster a relationship that arguably could determine what races you participate in. This fee to get your shoes fitted is a cost, but it brings much more stability to your role in the team. Eventually, I injured my back my senior year and could not run in college, but I think this enabled me to find different hobbies throughout college.
I joined Alpha Phi Omega, a service fraternity, after having a hard time finding organizations I actually enjoyed being a part of. I had friends who were involved with this organization, which strives to promote leadership and friendship within the organization, and volunteer work to the Champaign-Urbana community. Simply being a part of Alpha Phi Omega, however, does not give you the same benefits as being on a committee. When I was pledging, my friend told me that I almost have to join a committee, for otherwise, it is very difficult to actually make friends and meet people who are more than just people you run into once a week. This transaction cost of joining a committee that plans service events or leadership events is not only a meeting and some work during the week, but it enables you to actually feel a part of this organization. I know people who are not on communities, and they complain about not really enjoying APO. With this, I think that joining a community is like a transaction cost: you have to put in some time and effort to know that you will actually feel a part of this community. Without this, joining APO is arguably useless with respect to meeting new people and making new friends.
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ReplyDeleteThe first example you brought up, about your coach in high school owning the store with running shoes could be purchased, is an example of opportunism that would be suitable to bring up again for the prompt next week. I wonder if your school's principal was aware of this or if parents objected to this practice. I recognize that there is a fine line here because having the proper equipment is necessary for runner safety and runner performance. But choosing with members of the team get to participate at track meets based on whether they shopped at the coach's store or not seems unethical to me. I would think that complaints would have been generated as a consequence.
Now before moving to the next example, I wonder if for you running was a pleasurable activity and, if so, did you ever run without the competition just for the joy of running? Then I'd like to know what the competition added for you. You said you suffered an injury in high school so didn't do it in college? Without knowing anything about your situation, might you have pushed yourself too hard in high school, so that injury was likely. As you heard in class today, I'm a big Yankees fan. This year the team has had an inordinate amount of injuries, quite a few with younger players. It's as if that the high level of performance expected of a major league ballplayer nowadays, is physically destructive on players. For pitchers this may be obvious. But it seems true now for position players as well.
Turning to your joining a service fraternity, I believe (and I'm not the first one to come up with this) that to have a friendship and/or a trusting relationship you first need some bonding experience that is common among the participants. They can build on that afterwards, but before people will be more reserved and not so friendly. In that sense the bonding is a transaction cost, as you say, because it enables futures transactions to occur at a higher level. However, the bonding may not always be sufficient. So I wonder if there is also something about who might consider joining a service fraternity and if that itself weeds out people with whom transactions might be more difficulty.
Last you might comment about the service work versus finding a paid job. Did you do both or just the one? Regardless of the answer to that, it would be good to know how you see the two fitting together.
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ReplyDeleteI agree -- it certainly was unethical. But I know that I personally never thought of it that way at the time. I saw it as something I should do to be the most successful for myself. Plus, getting fitted shoes was good for me personally throughout the year. It was arguably something I would have done regardless of the later outcomes.
Additionally, I do run for the joy of running. I didn't realize how much I enjoyed it at the time because it was just a part of my routine, but this past summer I ran a half marathon and truly enjoyed training and all of the work that went into it. It was not even like work for me. I agree, injuries seem to be very common when you reach a certain level or practice a certain amount of time.
For the service fraternity, I completely agree. People who enjoy volunteering seem to fit what I value, and a lot of the volunteer activities I have participated in have really been rewarding. That is an interesting perspective you mention later.
As for finding a paid job, I tried one during the school year, but it really was not enjoyable for me to work in the dining hall. The main reason I looked to join the service fraternity was for people, and through the jobs I tried, I did not attain that. Granted, if I kept looking, perhaps I would find one with a good fit.