My experience with organizations and Transaction Cost

Organization Structure

I have some experience with many organizations and my favorite one is TEDx. It is a sub organization of TED which is quite famous all over world now. Just like TED, the idea of TEDx is to encourage the spread of brilliant thoughts of different areas concerning the development of our society. However, TEDx is especially designed to help communities, organizations and individuals to spark conversation and connection through local TED-like experiences. In other words, it focuses more on people around us and this inspires us to hold our own TEDx event.

The structure of our organization(TEDxSuzhou) is quite simple. There are four departments: Management Commission, Project Operation, Secretary Department and Public Relations. The Commission is the core of our organization, the board members usually consist of those who have working experiences, social connections and should be good at networking. They are responsible for contacting and giving feedbacks to TED; selecting and training speakers; setting our schedules and holding weekly meetings.  Project Operation, Secretary Department and Public Relations are operators of the work assigned by the Commission. Project Operation focuses on executing detailed plans for the event, including choosing sites,renting equipments and so on. Public Relations is responsible for promoting our events on social media and searching for potential speakers. In contrast, Secretary Department deals with internal business such as budget control and some HR works. We both work separately and closely. During the meeting on every Monday evening, we sit down together to check our schedules and listen to different departments’ concerns. After that, we will stick to the plan worked out at the meeting and do our jobs separately.

A Case on Transaction Cost

In China, there used to be no private high schools and all parents hope their children could go to famous public high schools. Established at 2000 , my alma mater is one of the first modern private high schools in my home town. Back to the first year, there were only eighty five students at school, because most parents are not comfortable with the teaching quality of a new school without history and more important, the tuition is much higher. Although, our principal spent lots of money on ideas like substantial scholars; small-class teaching style and high quality english class to attract students, things did not change in the next two years. In 2002, the year I went to middle school, our principal made a big decision: to establish a middle school department. What happened later proved he is right. Since there is not so much pressure on preparing for the college administration exam, many parents are attracted by the idea of substantial scholars; small-class teaching style and high quality english class. one year later, convinced by the teaching quality, most parents choose our high school department as well. I think it is a very good example of eliminating unnecessary transaction cost by taking advantage of that. Assuming high school is a company looking for potential consumers: parents to buy its products: high school eduction. All the strategies used to convince consumers are transaction cost. What our principal did is to avoid the barriers of entrance to product A  and create the demand for it by selling its complementary product B. As a result, my alma mater is the best high school and middle school now and it has much more donations from alumni than any others. In fact we also have primary school department and kindergarten department now. It creates an closed-loop educational system just like what Apple did with their electronic devices.

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2 comments

  1. profarvan · September 15, 2014

    I wonder why you gave two distinct examples here – TEDx and private highs school, instead of having just one and expanding on it more. I think you will find in future posts that developing one example more fully will be a better writing approach. I will try to illustrate below.

    On the TEDx, first paragraph part of the essay, your own current role was obscure as was your prior experience that led up to that role. You might also have gotten into the style of TED talks, when they are suitable and when because they are meant to be brief, they leave too much out and are therefore less good than more traditional lectures. Had you pushed in that dimension you might have been better able to tie it to the type of presentations your group is looking for. Then you might also have discussed logistics matters – is there a membership fee? do you pay any of the speakers? do you make recordings of the presentations? etc. All of this would give more flesh to your presentation.

    On the private high school part, it would have been helpful if you discussed some the alternatives that were available to you and your parents. Was there some dissatisfaction with those alternatives before the new private high school opened? That would have helped to set the stage for what did happen. Also, you might have spent some time on explaining what substantial scholars means. I haven’t the expression before. I can guess what it means, but I’m not sure. I believe I do understand small class (though not how small) and have some sense of substantial English class.

    Now let me talk about an indirect issue that relates to your experience. I am the product of public primary school, middle school, and high school. Likewise, my children followed that path. But there is pressure on the system. The university has its own schools, typically populated by children of faculty, and there are private school alternatives. In the U.S. there has been pressure on the public schools, especially those in the inner city, because academic performance has not been very good. Some people believe that privatizing is the answer. Personally, I’d like to see a greater commitment to the public schools. Issues about race underlie these debates. The experience in China might help inform on what to do in the U.S., because the issues about race are either quite different or not nearly as important. So elaborating on what you had to say would be quite interesting for those reasons.

    I do think you are right in your economic analysis about the seller of a new product having to convince buyers that the product is of high quality. This is the “snake oil salesman” problem in a different guise. For that reason I wish you would have elaborated more on the middle school experience. I didn’t understand why parents would be more trusting of the private middle school. You mentioned the college entrance exam in this context, but I didn’t get the full implication of that.

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    • shiyuchen1992 · September 16, 2014

      First, Thank you for your comments, it is really helpful for me. I think I misunderstood your instructions about this assignment, so I wrote two examples instead of one and I will trying focusing on one next time.
      For the private school part, I think I should add more background information to make it clear why this is a problem in China. For most parents, the success of college entrance exam is all they care about because students can only attend this exam once a year which means the result of this exam decides whether they can go to a good college. As I said, before the new century, there are few private schools in China. So, parents feel more ‘safe’ to send their children to the ‘good name’ public schools instead of private ones with so many uncertainties. Another reason is that most of the teacher resource, the core competence of high school, was in the public school system because of the attraction of public welfare system. As a result, parents believe in the education quality of the public school. But for middle school, students are not faced with the pressure of the exam and with the development of economy, parents start to be interesting in the facilities, special designed courses (such as teaching piano) and different learning environment (such as learning with foreign students). And without that much concern on teaching quality (actually is quite good), these advantages of private school attract my parents. I hope these information will be helpful.

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