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Second week blog post - organization / transaction costs

Organizations can be very different from each other by their sizes, operation modes, and industries (areas). Companies are the most common type of organizations in general, but schools and colleges are organizations, and so are hospitals. Different types of organizations require different ways of regulation.

I have only one internship experience as a psychopathology assistant in the research lab in a mental hospital in Beijing. I did literature translation, proofreading, and outpatient service shadowing. The hospital was well organized under the regulation of a decisive director. However, my director was so busy all the time that she sometimes failed to communicate and assign tasks efficiently with her subordinates. I had no tasks assigned in the first week at all because my director attended meetings and conferences all the time. She did not communicate with me of her expectations or goals, and she did not respond to my emails with any questions I held. I was so lost and confused, at the same time feeling worthless in the team.

At the beginning of the second week, she finally replied to my email with the task of literature translation and proofreading. However, she only sent me the document without explaining her detailed expectations for the translation nor the exact deadline. As a result, I finished it with my own pace and understanding of the 800 pages of literature. The regulation was so messed up that the whole team, not just me, was moving forward without a team spirit or ultimate goal. Based on the situation, the director finally made the decision to make a change among the interns. The director divided the large group of interns into small groups, with a PhD student assigned to each group of us for more spontaneous communication and easier management. This decision was a very smart move that solved all the problems that emerged in the first weeks of the internship. Within the smaller group, I received more precise instructions and help and got my tasks done with less time and better quality.

The transaction cost in the change is that we have a hard time accustom the difference, we can’t get our work done on time because we are working with people that we were not familiar with. Second, we spend days or even more than a week to adjust our division of tasks. We dismissed later than before because we have to do the team building events and individual meetings with the PhD student for her to know us better. The better the group leader knows us, the more efficient allocation of tasks is. Also, setting a time for groups to meet is harder.

Transaction costs are inevitable, we sacrificed our break time and after work time for a week, but once the group adjusted to the new regulation mode, the whole team was more productive.

Comments

  1. Although you are in group 3, I'm writing a comment on your post this week because there haven't been enough posts from groups 1 and 2 to fully occupy me.

    I said in class that I wouldn't comment about English grammar, but I do want to note one word that you used - regulation. I would rather that you use the word - management - instead. In the U.S. regulation usually refers to government rules for others to follow. For example, I mentioned FERPA in class. That is regulation about privacy. You are blogging under an alias so that what we do is consistent with FERPA.

    One bit of the story you could have amplified on is whether the director had been in the job for quite a while, with her old method of organizing effective in the past, or if she was rather new at this so didn't understand fully the costs in having so many people to supervise. Later in class I will give an example where in my preferred way to manage I have two or at most three direct reports. It becomes chaos when every employee expects to have a conversation with the director and for that to be done in a timely fashion.

    The part of the solution where the PhD students became middle managers was sensible, given the story you told, but I wonder if they needed any training to do that job effectively. You might expand on that. Also, you might say whether they got some additional pay for doing that work. One reason to have a flat structure where everyone reports to the same boss is that there isn't enough money to have an assistant director or to have several middle managers.

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