Archive for the 'Thoughts' Category

In my Public Finance class, which ended yesterday, the other half of the final was that we had to give a small-group presentation on ways to fix Oregon’s revenue problems. You see, Oregon relies on income taxes for most of the money for the general fund which, combined with the lottery, gasoline taxes, and federal funds more or less makes up all of Oregon’s budget. The problem with income taxes is that they’re generally volatile and highly responsive to positive or negative economic indicators. (For instance, tax revenues were way down in the 1981-83 biennium due to timber issues and almost catastrophically low in 2001-03 due to the tech crash.)

How do you solve the problem of such amazingly high revenue swings?

Two groups approached the problem from a tax diversification standpoint. One encouraged the raising of property taxes (due to several measures in the late 90’s which limited property taxes), and another group advocated switching almost entirely to a sales-tax funded system, much like the State of Washington. Neither of these solutions appealed to my group; we don’t necessarily like taxes that much and we dislike the income tax the least because it’s very progressive in nature.

Looking at the problem, we realized that Oregon tends to have high highs and low lows. Moreover, Oregon’s revenues tend to be strong in all but recession/depression years. Another issue is that, due to the balanced budget amendment Oregon has, we can’t borrow to cover short years. Furthermore, when we do have a good tax year, we refund most of the excess collected taxes in the form of the kicker.

My group’s (highly elegant) solution was to eliminate the kicker, instead redirecting those funds into a rainy day fund that would automatically be added to the budget during periods of revenue shortfall. (I say “automatically”, as opposed to “by legislative or administrative action”, so that it can’t be used as a political tool.) Had we started this after the 1981-83 recession, we could have more than halved the effect of the 2001-2003 crisis on state government, which - considering that the State of Oregon is the state’s largest employer - would have resulted in remarkably positive results. Add to this the economic bonus of NOT slashing all government spending during a crisis - which, in our opinion, is vastly more beneficial than the small economic bonus provided by kicker checks - and I think our presentation was pretty solid.

As I was surfing the web the other day I came across an article titled “Business School is a Joke“, written by a 19-year old sophomore in the Ross School of Business’s undergraduate business program. In many ways, I see what he’s saying in his article, though in many ways I vigorously disagree - perhaps due to my age, experience, the fact that I’m in a master’s program instead of an undergraduate one, or the program I’m actually in. However, here are some of the main points his article:

Here, he’s talking about a local deli’s head of corporate strategy and managing parter.

During her 45 minute PowerPoint-guided presentation, she said the word “growth” eleven times; she talked about deliverables and accountability; she went over their various systems, their management structure, and their mission statement. She didn’t mention sandwiches until I asked her which one she liked the most. She didn’t mention that the owners traveled extensively picking ingredients at tiny farms and bakeries, or brag about their customer service (their founder wrote a best-selling book about it), or describe their massive mail-order sales, or explain the seminars and tastings from which they generate a substantial profit, etc. In short, she didn’t really say anything at all, and yet the kids around me were taking notes.

That’s the root of the problem. That’s what the business school teaches us to do. Not once has a professor told us to “make great products” or “do something people love.”

Here’s a newsflash: the person was probably talking about corporate strategy, and trying to be generic. Corporate strategy doesn’t necessarily have anything to do with “products you love”, but about taking someone else’s product and maximizing it. It’s like a chess game; you don’t worry about your individual pawns or pieces, per se, you worry about winning the game. So I think maybe he missed the point on this one.

One of his good points comes from examining the depth of his classes:

There’s nothing wrong with introductory classes. Basic concepts, after all, need to be addressed early on. The problem was (a) the lack of rigor: we were taught to “plug and play” numbers (in accounting, too) rather than understand them.

Now I can say that we are rigorous in my program; we definitely don’t teach “plug and play” numbers here. Depth of understanding can help in interpretation. However, at the undergraduate level (and in the beginning of the program, no less) perhaps the importance isn’t always in understanding how the work is done but what the results mean. I see his point, but I disagree with his viewpoint on this one.

Here’s another gem from his rant:

At business school, it seems, bullshit wins.

Again, I’m going to disagree. For very few professions out there is time irrelevant. So, while striving for absolute quality is perhaps admirable, striving to maximize time and results is a even more admirable. In paraphrasing (and loosely applying) the 80/20 rule, if I can produce 80% of the results from 20% of the effort it otherwise takes, then I can actually do a lot more with my time if I let quality slip a bit. It’s not about bullshit, it’s about optimizaiton.

His concluding paragraph, despite some of the quality of his earlier points, proves to me that he’s missing the point:

Mandatory group work teaches you how to manage, and thus it’s at the heart of a curriculum designed to build professional managers. What this really means, though, is that it teaches kids how to assign tasks to people who aren’t capable of doing them, how to schedule wasteful meetings to re-format and explain individuals’ work, and how to make bad and inconsistent PowerPoint presentations. I’ve read enough Dilbert to know that the b-school model of management is accurate, but that doesn’t make it good.

You see, being an effective manager or even leading people isn’t just assigning tasks to people who aren’t capable of doing them. If I go out there and do little more than schedule wasteful meetings, than I haven’t learned what they taught me here. Instead, effective management is about producing great work from good people. It’s about figuring out the best way to do things, not just a good way. It’s about distilling patterns from unrelated facts. It’s about arranging individual resources to produce the maximum result possible, while taking little to no credit for success and all the blame for failure. That is what business school is about, not producing Dilbert-like managers who consume more than they produce.

And that’s why I think he really missed the point.

I’m enjoying my public finance class.

We’re learning a lot about the State of Oregon budget process – more than about local or federal systems. This is great for me; I have a real interest in how my state works. Furthermore, since we’re so close to the state capitol, we have access to people (who come in as guest speakers) who really know how this works. For instance, we’ve had someone from the state Office of Economic Analysis come talk to us. We’ve also had a speaker from the Legislative Fiscal Office. These speakers help make real an otherwise merely conceptual topic.

Some of the more interesting points in the class are our discussion of taxation theory; what constitutes progressive versus regressive taxation and the idea of taxing wealth versus taxing income. (For the record, I wholly and completely oppose taxing wealth, which includes the taxation of property.)

I’m glad I’m taking it.

One of the most exciting classes thus far has been my Negotiations class. I’ve always felt that my negotiation skills were very weak (strange, since my father’s been selling cars my whole life.)

Perhaps the most interesting conversation was on negotiation styles. If were were to draw and x-y graph, assign the y-axis to the “issue” being negotiated and the x-axis to the “relationship” between the negotiators:
“Avoiders” would be the group of people who exist near the interesection of the two axes. This is the group of people that’s hardest to negotiate with because they avoid it as much as possible.
“Accommodators” are the group of people who live on the x-axis - the “relationship” access. Due to the relationship between the negotiators, these people will more or less agree to anything for a while - but will resent it (perhaps explosively so.)
“Competitors” are people for whom the issue is more important than the relationship. This group of people generally have to “win” at whatever the negotiation is about (and, if they lose, they’ll usually keep a tally of that.
“Compromisers” would exist along a diagonal line drawn between the two axes. These people tend to want to find a resolution that makes all negotiating parties happy and give everyone something they want - however, they also tend to give up importatnt points pretty quickly to find a solution and can sometimes come up with an answer nobody’s happy with.
“Collaborators” are a mysterious group that would maximize both the issue and the relationship, finding a solution like the compromisers but without the drawbacks.

In the classroom categorization we did, I found myself to strongly tend towards compromise and avoidance. This isn’t necessarily bad, but it means the challenge for me will be understanding the other types of people that represent the negotiation style that I’m not. Hopefully I can get that out of the class - and practice it, too.

Well, we’ve reached the end of summer and it’s time to reactive the old school blog.  Summer was an interesting experience; I reached the end of last semester and took two full weeks to get back into the mode of actually being able to accomplish things; now I’m up and ready to go again.  My internship was nothing shy of fantastic and I enjoyed the classes I took over the summer as well (more on that later.)  But today is the last of summer; classes start on Monday!

Because my life is awesome, it’s 2:15 AM and I’m at school.  I’ve been working with some of my favorite classmates on a final review for tomorrow as well as a write-up for the IKEWs we have next week.  Yes, I have class in 7 hours and 45 minutes, and yes, I have a final in the morning as well.  Did I mention my life is awesome?

In the ongoing drama of super-curricular extra work, in our first year at Atkinson we have to get ourselves a Microsoft Excel XP Specialist certification. The total process, thankfully, takes only about an hour and a half between the practice exam (highly recommended) and the actual one. I took my test yesterday and scored a 90% - quite the disappointment for me, though only 70% is required to pass.

The test is highly structured and demands answers in very precise (and, let’s face it, bizarre ways.) We were given a series of 15 questions that involved doing stuff on various worksheets. You’re actually penalized for knowing shortcuts in Excel during this test since your actions as well as the results are tracked. So while I only got 90% of the test right, I’m absolutely convinced that my results were 100% correct.

I mean, let’s look at some of the things I’m now certified to do:

  • Insert, delete and move cells
  • Check spelling
  • Save workbooks using different names and file formats
  • Modify row and column settings
  • Insert and delete worksheets
  • View and edit comments

While this list isn’t comprehensive, I knew how to do all of it before taking the test. Seriously, this certification isn’t anything I’ll ever put on my resume because (for me) it would be out of place among the “5 years supporting Microsoft Office in an enterprise environment” and “1 year programming Cicso routers”. Yeah… I’m also certified to run the Excel spell checker…

I’m having a difficult time right now in the program. I’m getting very disillusioned with the MBA process here for a variety of reasons.

I’ve never been a fan of the concept of having people do as much work as possible and calling that a learning experience. There’s a lot in this program I’m missing because of the way groups are set up. The design here is to throw as much work and as many learning objectives at us as possible and hope that some of them stick. The breadth of work is so vast that depth isn’t possible, and I feel like I’m not getting as much from this program as I deserve (and am paying for.) It’s for that reason that I feel like I couldn’t recommend this program at this time.

I was told by an administrative staff member the other day that this is a professional degree, so it’s not just academics - it’s networking and career activities, too. And I’d better start doing all three if I want to get the most out of the program. If that means going from a 3.6 GPA to a 3.5, well… so be it.

That rankled me. We’re all feeling overwhelmed by the workload right now (it’s not just me) and the amount of ourselves that we can put into our projects is dwindling quickly to zero. There are health effects, too. It’s hitting us all, and I don’t like it. In all fairness, the faculty is starting to see this and maybe one day in the future it’ll get fixed.

As I’m sure I’ve previously mentioned (but am currently too lazy to go back and look up), ethics as it pertains to business is a large part of the curriculum at Atkinson.  I found one of our readings - The Ethical Mind - to be fascinating.  You might, too.

One of the things he says is “[It's more difficult for businesspeople to adhere to an ethical mind than it is for other profressionals] because stricktly speaking, business is not - nor has it ever been, a profession.  Professions develop over long periods of time and gradually establish a set of control mechanisms and sanctions for those who violate the code.”  I think that’s an interesting insight, especially as someone who’s studying business.

We’re talking about corporate governance and strategy in my strategy class.  So, I looked up “corporate governance” in the Wikipedia.  Without too much discussion, I think it’s interesting that that article is shorter than the one for the Silver Surfer.  What kind of world do we live in?

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