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.