Friday, September 12, 2014

#1-Transaction Costs

For the past year or so have been the the house treasurer for my fraternity. I am in charge of sending out bills and dues, making sure the house bills are getting paid, and keeping track of the houses finances. As accountant I am also on the so called "executive council" which consists of the President, Vice President, Treasurer, Risk, and a few other positions for a total of 8. The executive council is in charge of making sure everything in the house runs smoothly and is in charge of making rules for the house and disciplining people who break those said rules. Having 8 people making decisions leads to a lot of inconsistency and arguing amongst the members on the way that things should be run. It gets especially chaotic when dealing with fines and disciplinary measures. It makes it especially hard because sometimes you have to discipline some of your closest friends which no one ever wants to do. Another thing which makes things run less smoothly is that the leadership positions typically change every semester. With a mostly new board of people with new thoughts and ideas every few months, rules and regulations get changed quite often.

There are many transaction costs that go into making rules and regulations for the house. You need to make it a safe environment where everyone can call home, but on the other hand it is a house full of boys and sometimes they like to have some fun. You must create rules that are fair and reasonable and also ones that still allow people to stay happy and not turn against the leaders so that everything can run smoothly. With everyone so busy with school work, meetings and committees must be quick and efficient, which is a very difficult task when trying to make 8 people's opinions and concerns heard and satisfied.

2 comments:

  1. You set us a potentially interesting topic on which to write an essay, but then it seemed to me you only glossed the surface and didn't really get into. Below are some thoughts on how you might have pushed this further.

    First, on your job as treasurer. Was that something you volunteered for or something that somebody else recruited you to do? Likewise do most members eventually serve on the executive council, so rotating through it is done out of obligation? (It's my turn to shoulder the burden.) Or are there some perks from being on it as well, at least if you have a certain type of personality and don't mind the visibility, so the more political types tend to monopolize certain positions? This matters a lot for motivation. And motivation is one of the key issues in transaction costs.

    The essay would also have benefit from one or two examples. I don't know as much about fraternities as you do. What happens when a rule is violated and a member acknowledges as such? What sort of discipline are we talking about?

    I know this is not the same but after my Freshman year in college I was a counselor at a sleep away camp. One counselor for the group had night patrol to handle any issues and make sure the kids would go to sleep. My first time doing that I had a kid who was being a smart alec, so I made him do so pushups. It worked, in that things quieted down after that. I was later told by the head counselor, that this campus doesn't do punishment of this sort. So I too got reprimanded, but it was a mere wrist slap.

    As you may know Fraternities have been in the press this past year, and not in a positive light. This piece, The Dark Power of Fraternities, makes for a fascinating read, even if it is also a frightening image (at least it was frightening to me). I wonder if your board ever discuss liability insurance, if you have it with sufficient coverage, and what it takes to maintain it in good stead.

    Boys will be boys, but one rotten apple might spoil not just the current barrel but all the rest that come after. So one wonders if the proper balance between fun and being sensible has been attained.

    Let me close with one last question. Is there an adult on the premises who guides the frat on these issues? And would you know if that is answered the same way across the different fraternities on campus>

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  2. The job of treasure at my house was volunteer basis, however there were many volunteers and the chapter voted on the treasurer position, as well as the others. Each semester others would run against me but i consistently got voted into office. There were perks of being on the executive board in ways such as better room pick, more responsibility, and not to mention the leadership experience. There are many benefits but however is a large commitment of a person's time.

    As far as rule violations go there are a couple of ways in which they are handled. Most of the time the rules broken are not too serious and fines, which have been previously establish by the current board, are given out. Some typical infractions are breaking things in the house, being loud during designated study times, and being loud late at night. If the infractions are more serious the infracting member can be placed on "social probation" and cannot attend events or can even be kicked out of the chapter completely if serious enough.

    As far as the liability goes for the fraternity goes we do have a person thats sole responsibility is risk management. He is in charge that everything done by the house is under the rules and regulations given out by the university as well as the rules and procedures required by the national headquarters. We constantly have speakers and other members such as the police department coming in to explain to us the importance of safety and responsibility.

    Im not sure how other fraternities around campus are run, but we have a chapter leader who stops by very frequently and makes sure things are running smoothly and the house is clean. He is always on call if there are any problems that were to arise. I do however know that most sororities have adult women living in the house as sort of a "house mom" who helps with day to day operations.

    Overall the main goal of the house is to build a brotherhood between the members and to achieve that in a safe and responsible way, but also in a way where everyone has a good time and great experiences.

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