Review and Critique of the Class

I feel that one of the most important things I took from this course was during our discussions about empowerment. Coming into the course, I understood empowerment on some level, but I am glad to see that some experts believe that employee empowerment produces powerful results. I know that as I continue on in my career, this is something that is very important to me. If I decide to work for someone else, I need to know that I will be treated like an adult, and hopefully given some ownership in the organization.  

In terms of instruction during the course, one of the main issues I had with the course was the underlying assumption that I knew the concepts from Microeconomics more intimately that I actually did. Almost all of the homework relied heavily on assumptions from Microeconomics that I simply didn't remember. I would be interested to know how others felt about this. I understand that if I am the only one who had this complaint, then it is my duty to go back and review that material to enhance my understanding, but I also feel like a short recap of the fundamentals involved in the models we discussed would have been extremely helpful. If there had been an effort to go through the basics of the models more thoroughly, I would have taken A LOT more away from this class. Many of the models we discussed are still nebulous to me, and I feel like I learned a lot less than I would have liked to. 

Continually, I often found it difficult to ascertain the main points of our classroom discussions. The stories were nice, and I had SOME takeaways from those, but not the takeaways that I feel Professor Arvan had intended. This is the main reason that I found it necessary to stick to the examples given in class when it came time for the exam. I knew those answers were correct, but I didn't fully grasp the overarching lesson. If I had, I would have written something more interesting. I'm a bit concerned about the final exam for this reason.

I am not sure if I took anything valuable away from the blogging, I don't feel like I got a lot out of it. I am not sure how I could have done things differently in order to rectify this. It usually takes me about 45 minutes to write my blog entries. I spend a lot of time thinking about if I am answering the question in the prompt in a sufficient and related manner. When I think about it more, the classroom discussions related to the blogging were often interesting and I enjoyed those, but I am not sure if those takeaways were relevant to the material. 

The Excel homeworks took me anywhere from one to three hours. I tend to be the type to dive into things without preparing at all. When there were videos for the Excel homeworks, however, I watched those before completing them. I found the explanations contained within the Excel homeworks to be very cryptic and filled with jargon that I had a very difficult time sorting out. I really wanted to understand them fully, but either I am terminally dense, or the explanations just were not clear. There were definitely a lot of technical elements to the work that I had little to no experience with, which did not help the matter.

Amazon Rocks

Most of the time, I like to write about things that I enjoy. Amazon.com is definitely something I enjoy, and seeing that my online purchases are in the $30,000 per year range, I think I have some experience with buying things online. The vast majority of these purchases are components for my clients.

From what I understand, "branding" started when cattle ranchers needed a way to differentiate their cattle from other ranchers' cattle. They did this by burning a symbol into their cattle with a hot iron poker. Amazon.com has been quite successful is creating a strong brand, and capitalizing on the associated recognition. It would be hard to surf the web for any significant amount of tine without coming across something associated with Amazon. The Amazon name is everywhere, and Amazon has capitalized on their brand name, as seen with the quick adoption of their Kindle e-reader. As a side note, I find it interesting that brand is considered an intangible asset for many companies, and is sometimes their most valuable asset.

Perhaps Amazon's most valuable asset is their reputation. The company has managed to establish an excellent reputation by providing fast, easy, and reliable services to customers consistently. One of the reasons I have recently shifted a great deal of my purchases to Amazon is because of their "Prime" program, offering free two-day shipping, and $3.99 next-day shipping on all items they stock (assuming that you pay the yearly subscription fee to the Prime program). This allows me to have faster turnaround and better cash-flow. Additionally, Amazon has one of the fastest, easiest ordering systems I have seen on the web. I can usually press a single button online to have an item at my doorstep the next day. For someone who spends at least an hour per day ordering parts online, this is valuable to me. I have had several instances where I need to return items, and Amazon excels at this as well. This is usually a very quick and painless process, which, most of the time, does not even involve speaking to a human (something I value). Amazon's reputation, for me, is hinged on these things - providing a quality product quickly, and supporting the product promptly if there is a problem.

In trying to understand the difference between a brand and a reputation, I find that the two are inextricably linked. Creating a brand seems to be about customer recognition and association with a symbol or name, but in order to have a stellar brand, you need to have a stellar reputation. Customers might come to Coca-Cola because of the brand, but the reason they come back is because of the product that Coca-Cola provides consistently. This is no different with Amazon. People might come to Amazon because of their ubiquitous name, but consumers come back only if they are pleased with the service that Amazon offers.

The Locations Were Pizza Hut and KFC

I have been involved, in a few instances, on jobs where I act as the agent between two principal actors. There is a staffing company (the name of which I cannot seem to remember) that hired me to do a few jobs over the past few years for Yum! brand restaurants including, but not limited to, virtual private network installation and configuration. In this setting, the work order was submitted by a manager of one of the Yum! brand location managers, and fulfilled by the staffing company located in California. I was contracted to meet with the manager, and the job duties were outlined by the staffing agency. 

In this particular instance, the work was completed and done satisfactorily, but things can certainly go awry. One principal, the staffing agency, is concerned mainly with having the job done in a timely manner, and done properly. They were not as concerned with having it done at a certain time of day, and did not seem to be bothered with attire or onsite attitude. The other principal, the manger of the Yum! brands location, may have been concerned with promptness, attire, attitude, and other performance measures that could affect customer morale at the location. 

I suppose that this case is curious, however, because Yum! brands always has the option to drop the staffing agency and choose another if the performance of the agent is not up to the manager's standards. The manager cannot directly dispense of the agent in this example. This makes it important for the staffing agency to set the standards for the contractors they use.

As the agent in this circumstance, I am more concerned with satisfying the criteria set by the staffing agency, because, at the end of the day, they write the check to me. The incentives are not aligned so that I am concerned with the demands of the manager of the location. It is strange though, that this would not have constituted as a failure if I had not pleased the manger at the location; perhaps this work setup is not aligned in a way that is sensible for the manager. In this scenario, it would be valuable for the staffing agency to have some sort of code-of-conduct that aligns with the desires of the managers of the locations. This seems to be the best way to avoid any issues regarding different opinions about performance. The staffing agency should, and in practice usually does, understand the needs of the mangers on location. When I think back, there were documents detailing dress code and other behavioral technicalities while on site. 

Perhaps another way to resolve tensions would be to give the managers the ability to directly dismiss or dictate to the contractor the work to be done. It seems to me that the manager needs to have more power in this relationship. This might shift incentives in a way so that the contractor is induced to please both the staffing agency as well as the manger.

Felix and John

I think the only relevant information I have to share in this realm has to do with people I have employed. Over the past few years I have hired several people, and only one of the hirings went well. 
In one circumstance I hired a gentleman, we can call him John, to assist as a technician. I might call this some sort of apprenticeship, and I was responsible for training him to perform certain technical tasks that had become overwhelming. I knew John prior to hiring him, and considered him a friend. We had frequent friendly interactions, and shared many interests prior to our work collaboration. I would say that our work relationship was quite good. I did everything I could to allow him to complete tasks to the best of his ability. I felt that I could trust him to a large degree and I knew that when he said something would be done, he would make a diligent effort to get it done. There was a mutual respect, and I believe that this fostered a collaboration rather than a superior-subordinate relationship. I compensated him very well, and often paid him more than I originally promised. 

In another circumstance I hired a gentleman, we can call him Felix, also to assist as a technician. I had known Felix from school for several years prior to hiring him. We never actually met face-to-face, but since I knew him for so long, I felt that the hire would work well. Felix was working for me in another city and was responsible for meeting with clients, picking up equipment, repairing it, and returning it. I would do most of the direct contact with the client and dealt with ordering replacement parts for the equipment he diagnosed. Felix was far superior to John in terms of technical ability, but overall, we did not end up getting along exceedingly well. There may have been something about his skill level that I found threatening. He was a very competent technician, and although I still had to teach him things from time to time, it was convenient that he was able to do the work with little guidance. Due to his skill level, it seemed to me that there was some amount of resentment he harbored that I was profiting from his labor. When it came time to pay Felix, however, this was always a time that was difficult for me. I was always slightly reticent at the thought of having to pay him for his work. It was not that I did not appreciate it, or that he did not deserve it, but I felt as though, perhaps, he felt that his share for the work should be larger. My perception of this attitude was maybe a resentment of a resentment. I believe that he resented having me profit from his labor, and I resented the fact that he had resentment at all. I felt that he should be more grateful. 

This was one big difference between the two relationships. John was extremely gracious and grateful for the work. He thanked me frequently for the opportunity, and I thanked him frequently for his work. I had absolutely no problem paying him, and often paid him more that I originally promised. Perhaps it was this lack of gratitude and a sense of entitlement that I disliked so much with Felix. I never burned any bridges with either employee, but my experience with John far more enjoyable and productive.

Illinibucks

I can only really think about how this might work in relation to event tickets. Perhaps "Illinibucks" could be used to allow access to event ticket pre-sale. These events might include the many events at assembly hall (or whatever sellout name it has now) such as music, theater, and comedy. If the University set the price too low, perhaps there could be an issue with some people's "Illinibucks" not working for events that are extremely popular. Like bread in the USSR - think shortages. Frankly, I fail to see why this system would be helpful in any vane. I can't seem to think of one good example of where these "Illinibucks" might be used. 
In terms of administered prices, if it were too low, there would be some kind of shortage, and if it were too high, there would be some sort of surplus, presumably.

The subject matter of the question is certainly more accessible, but its relationship to transfer pricing eludes me.
 

Show Me The Money

I'm not much of a planner, but I play the tape through before making any decisions - especially financial decisions. I take nearly every opportunity to increase my net worth. I'm debt averse. I don't like debt, and I never have. Unless it's an asset, I buy things with cash, and I don't pay interest on what little consumer debt I accrue.

I don't think I have given much consideration as to why I behave in this way. I can definitely say that I saw my parents struggle through an ample amount of financial turmoil, and I never want to be faced with that.

I guess I should really consider how much these choices were made with an eye toward the future. I would say that I am always planning my next move - and that is what drives my decision making in the present. Over the past few years, that move was paying my tuition without borrowing (okay, okay, and also buying a cool car). That's now over, and I am focusing on saving in hopes of making some investments in property. In the past summers and even during the semester, you can find me working and employing friends to ensure that my business is profitable. All of these decisions I now think were made in pursuit of my current goal: investing in revenue streams that are a little more "hands-off."

As usual, I hope this is, in some way, salient.

The Staunch Opportunist

Merriam-Webster defines opportunism as, "the art, policy, or practice of taking advantage of opportunities or circumstances often with little regard for principles or consequences." 
I would consider myself a staunch opportunist when it comes to activities that will increase my net worth, so there are not often times when I overlook such opportunities. Recently, however, there was an example. 

Through one of my previous clients, I was referred to a small Waldorf-style school to appraise their IT infrastructure. It was what I might call an "alternative" environment. Upon walking through the front door, I was accosted with the strong scent of tea tree oil and several new-age hippies. After spending an hour there speaking with the staff and determining their needs, it was clear that this was a big, multi-thousand-dollar-in-my-pocket project. Being a student and having various other IT responsibilities with other businesses, I didn't think I could make this project work in my schedule. I spent the weekend mulling over the idea, and ultimately, it was very difficult for me to tell the staff there that I would not be able to do the project until at least December or January. I knew that this meant I would lose out on the opportunity to do the work and make the money from it. 

I would say that my calculus had to do with time constraints. Owning a business and being a student is a trying endeavor; I simply didn't believe that I could handle everything at once. I wish that there were some loftier, more intriguing  motive behind it, but I believe that is what it comes down to.

Organizations and Transaction Costs

First of all, I must admit that my organization vernacular is limited at best, and my experience with formal organizations is also quite lacking. I can speak about one company that I worked for that was rather small, but an organization nonetheless. This was a electronics repair company. We specialized in Sony Laptop repairs and worked exclusively with the warranty department at Sony along with some other places like Geek Squad. I believe there were 9 total employees, with me at the bottom. Looking back upon it, it does not seem as though much energy was expended thinking about the organizational structure of the company, or how having a more formal organizational structure might help alleviate some of the many tensions that existed.

There was George, the president, who performed (or didn't perform) the dictatorial duties of what I imagine a bad president might perform. His self-delegated position was the head of demotivational assurance, whose duties included making sure everyone knows that he is the boss and that they are expendable. George owned the company and I will refer to him as the president because I know for sure that CEO would be a misclassification. He was an owner/operator. He performed some repairs whose details he didn't want to disclose to the technicians, presumably for fear that they would learn the trick and undermine his customer base. George kept in close contact with Julie, the parts/finance/customer service/human relations/accounting person. Myself along with three other employees were technicians. It was our duty to perform the repairs along with other random tasks that could be delegated to any one of us at any moment by George. One of the other senior technicians was paid a bit more and also responsible for some amount of supervision over the other techs.There were a few others who fulfilled the roles of public relations, maintenance, and janitorial duties. 

Commands came directly from either George or Julie, but George called the shots. So George supervised everyone, the senior tech "supervised" the other techs (he had no real power to do anything other than report to George), Julie was solitary, sovereign, and ultimately subject only to George's commands, and the other employees took direct instructions from George on what to do from day to day. Expenditures all went through Julie, requiring approval from George only sometimes.

For fear that I am beginning to ramble, I will end this part of the monologue in hopes that I have identified something salient with regard to the class material. 

As far as transaction costs are concerned, I will speak about these in relation to my own IT business. I incur transactions costs all the time (I think). One example of this is estimating and bidding. I often get calls from small businesses that need a new VPN deployment or a new firewall, or perhaps a new server. In order to transform their need into money in my pocket, I have to send estimates. This process is time consuming and often requires research time. 

Another transaction cost I incur (I think) in my dealings with clients has to do with transactions. For example, I did some work for a small business recently whose check bounced. I am then responsible for rectifying this through the bank and the client, often involving trips to and from the client and bank.

Who is this guy?

Above you see Oliver Williamson, an American economist, and one that I have never heard of. Mr. Williamson currently serves as the Professor Emeritus of Business, Economics, and Law at the University of California, Berkeley. Williamson has a long list of accolades and qualifications that would only serve to bore you, so I'll let you imagine just how qualified he is. Along with wearing bow ties and looking smug, Williamson, as I have discovered, has made some contributions to the field of economics. So much so that he was awarded a Nobel prize. According to some guy who knows stuff about Williamson, "Oliver Williamson has reached the stratospheric level of being probably the most cited economist of all time." 

On a more serious note, Williamson was a student of Ronald Coase, a recently deceased British economist. As a student of Coase, Williamson elaborated on transaction costs - perhaps Coase's finest contribution to the science of economics. From what I was able to decipher of the economic jargon, it seems that Williamson expounded upon Coase's transaction costs. He analyzed transaction costs and gave us a more detailed and complete explanation of their role and some different kinds. Smart dude...