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Organization Structure and Transaction Cost

Organization Structure

I have a personal experience working in the organization called Intercultural Community Development Initiative(ICDI). Since we started our organization at the end of last semester, we're still on the process of applying for RSO position currently. Our organization has this mission to promote intercultural communications and eliminate barriers between people on campus. Thus what we do is building up workshops for both domestic students and internationals students to get involved in communication with each other. The workshops can be half-day or one day during weekends. And the content includes different activities such as stereotype awareness, community sense building, etc.

The structure in our organization is simple. There are three divisions: Industrial Development(ID), Public Relations(PR), and Financial Affairs(FA). The board members are the core of the organization, with three divisions differing in responsibilities and engaging in collaborations. First of all, ID division is responsible for the content of workshops, mainly controlling the most direct parts related to students. For instance, the members would have division meeting every week to discuss specific questions like how to raise students awareness of cultural differences and similarities, and how to design activities that are fun and informative at the same time, etc. PR division is focused on reaching out help and suggestions from other organizations to cooperate together or provide resources that the workshops need. Finally, the FA division maintains the budget plans and sponsorship searching in order to make sure the workshops can be actually initiated. Overall every divisions have separate responsibilities. We have general meeting every week. During general meeting all members attend and report what is going on in each divisions such that the decision making is coordinated. In addition, in order to increase efficiency in information flow, we have rules to respond emails as soon as possible. And members are motivated to give suggestions to other divisions, which can promote truthful communication. Every division also has their own meeting every week to confirm the specific details.

Transaction Cost in Choosing Classes

From my own experience, the first week of a new semester is a struggling period, for making choices and can bring many transaction costs. 

First of all, the most obviously transaction cost is time. For example, after I decided to drop Econ 417 and search for another interesting Econ class, I spent a lot of time looking at the classes that sound interesting for me. And I also made an appointment with advisor and took time to discuss about the possible classes that I can take. After looking up the descriptions for the classes and paid attention to any perquisite classes, I can finally change my classes. Actually, since I have already enrolled in 15 credits before adding class, finding the one that can fit my schedule is time-consuming as well. Secondly, another transaction cost can be the materials required for different courses. After changing class, I might need to return the textbook for the previous course and purchase another textbook for the new class. In the third place, the extra efforts to catch up with the class are also transaction cost. When I get enrolled in Econ 490 for International Trade after the first week, I found I have to read the textbook for Chapter 2 and finish the homework for first week as well. And since I didn't attend the classes, with less input of instructor, I have to pay more efforts than other students to be in the same page. Another example is changing my math discussion section. The transaction cost also includes the efforts to get used to the new TA's teaching style. Maybe the instructor has different accent, speaking speed, and different focuses, etc. Thus changing classes is related to a lot of transaction costs from my own experience. 

Comments

  1. Professor ArvanSeptember 13, 2014 at 9:22 AM

    Your chose to write about two different experiences,one the ICDI, the other changing classes during the first 10-day period. You may have had an easier time with discussing transaction costs with the latter, but you never really set that up as an organization. And I didn't see any real discussion of transaction costs with the former. So below, I'll try to explore how each part might have been expanded on.

    First, on ICDI, which sounds like an organization with a noble purpose, I would ask about how long it has been in existence and how many current members does it have? Then I'd ask whether it plans to grow further and if so does it have any targets regarding growth? Is there a membership fee? If so, how do the funds that are collected get spent? If not, what does the Financial Affairs division do?

    At present you said there are weekly meetings of the full ICDI where all members attend and where there are reports of what happens at the division meetings. To me this suggests a rather small membership for the full ICDI. Is that right? Would this structure survive if the membership were to grow substantially? Full meetings become harder to conduct in larger organizations and/or their purpose must change to attract an audience who mainly listen to what is going on. Coordinating those meetings would be a transaction cost. It typically requires producing a coherent agenda and making sure the program is lively. Otherwise audience members will get bored and cease to attend in the future.

    The add drop period is one of those things that irks me. You may be amused by this rhyme I wrote a few years ago, The First Ten Days Blues. On this one there are possibly many things to ask about your own situation, but I'll content myself with just one. Would you have been better off had you registered for 18 credit hours originally, with the plan to drop a course but not needing to add one after the first day? The university may not encourage this practice, but I believe it is allowed, especially if at first you insist to your adviser that you plan to do all the courses and not drop any. This doesn't necessarily solve the scheduling issue - two courses you want to take that meet at the same time. But it does provide some insurance against not liking one of the courses you did register for. Would doing this have addressed your issues?

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    Replies
    1. John RobertsSeptember 15, 2014 at 10:04 PM

      I thought we could just focus on different parts of the the structure of organization and transaction costs so I apologize for the confusion.
      In terms of ICDI, we've started last semester and currently we have 15 members. We're on the process of recruitment. In this semester, the short term target is to set up several workshops for students. And in the long run, we've planned to set up workshop in Shanghai, probably in the next semester. Later on we would try to expand this to other cities and countries as well. We've worked on the process of application as an NPO actually. But working on the current workshop in UIUC as an RSO is our first step. Since we're trying to become an NPO, there is no membership fee. The FA department is responsible for the fund. What we did is focusing on the companies in local, which have sponsorship history to help intercultural organizations. The PR department reaches out to those potential sponsors and then FA works on the funding process such as opening the official account, recording accounting history, keeping budgets balanced, etc.
      ICDI has small membership for now. While in order to get prepared for the workshops this semester, about 20 students would be recruited in two weeks from now. When more members are included, the general meeting would take a lot more transaction costs such that the three divisional meeting would probably substitute the meeting for all members. In order to coordinate three divisions, updating meeting notes from three divisions would be shared regularly to all members in order to make sure everyone is acknowledged with the holistic status and what is going on in other divisions.
      I read the First Ten Days Blues, the idea of before semester open house is wonderful! It can get students prepared and decide to take or drop class before the class is officially started. Late registration is no good. But my situation is that I am double majored in Econ and Psychology, there are many major classes that I need to take, thus I choose to add another class after I drop one in order to keep up with the plan.

      Thank you so much for the comment!

      Delete

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