Friday, September 12, 2014

Change, Organizational Structure and Transaction Costs

I would like to talk about my summer internship with the City of Chicago. I worked for the city clerk's office and essentially sold city vehicle tax stickers to Chicago residents. Seems pretty straight forward to sell vehicle stickers, but this summer the city was incorporating a new computer system to transition to year round sales.We were trained to use this new system right away and I would say that us interns that sold stickers at city hall sold more than the full-time workers. I think that we sold more stickers because we had never experienced the old computer system and were just going straight into the system that we learned and was fresh in our heads.

As far as the structure of the organization I would say it was pretty classical. There was a lot of hierarchy enforced and communication from level to level. We hardly ever talked to the supervisor's unless there was a problem with the system when they were near in the office. We were told to ask a tech person first. Management didn't communicate with us much at all during my eight weeks and from talking to full time vehicle tax distributors they didn't communicate with them much either. They actually seemed to really dislike management and we only saw Susana Mendoza the city clerk about four times throughout the summer when she chose to grace us with an appearance.

Transaction costs at work were really cheap for the city. All they really had to pay for was the paper that the stickers came on and I'm assuming the costs of swiping so many debit/credit cards. The design of the sticker this year was also rather plain which I'm sure cuts transaction costs even more. Other than that they usually earn up to almost 100 million dollars in vehicle tax from residents that go towards fixing potholes around Chicago neighborhoods and things of that nature. I think they return a great profit considering their costs can't be too high and instead of having to hire a bigger staff they hire interns during busy seasons for $9-$12 an hour.

1 comment:

  1. I've told the class that I did my graduate work at Northwestern. I lived in Rogers Park at the time. But the car I drove had New York license plates, so I never had to buy the sticker you are talking about. As a result, I really don't understand it's purpose. What would happen if a driver didn't have such a sticker on his car? In general for future posts, you will be writing about your experiences where the reader will have less knowledge about what is going on than you have. So you need to provide appropriate background information. Here, a sentence or two on how the stickers are used would have been helpful.

    In the private sector, when we think about internships we typically think of two functions, both attained in passing over the course of the internship. The first is training. The intern is learning how to be an employee. The second is screening. The employer is determining which interns would make for good employees (and the employee may also be determining whether this is a good place to work).

    You seem to be describing yet a third possible reason. Interns are part time employees who get paid less than full time employees. Intern is then just a label, nothing more. Sometimes that also happens in the private sector. I'm a bit surprised about it happening in the public sector, with no accompanying outcry. Would the City say there is no training for these jobs nor any screening of interns for who would make good future employees? Or are you leaving out part of the story?

    The last part I'd like to briefly mention is the nature of the business itself. You've described it all as face to face transactions. But when I do my car registration, with the state, that we've done by mail in the past and most recently it was done totally online via a Web form. Is the new system you mentioned aimed a labor saving and to move away from face to face business? If so, you might have described that further in your post.

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