3-IJAEST-Vol-No.4-Issue-No.2-Chicken-Egg-Problem-in-Education-and-Organization-Theory-010 - 013 by ISERP ISERP

Asst. Prof. Dr. Akin Seber / (IJAEST) INTERNATIONAL JOURNAL OF ADVANCED ENGINEERING SCIENCES AND TECHNOLOGIES Vol No. 4, Issue No. 2, 010 - 013

Chicken – Egg Problem in Education and Organization Theory (Product, Performance Measure, Conduct and Organization Structure) Asst. Prof. Dr. Akin Seber

Department of Financial Economics and Faculty of Commercial Sciences Yeditepe University, Istanbul, Turkey aseber@yeditepe.edu.tr

Keywords – productive efficiency, allocative efficiency; comparative advantage; organization theory, graduate school exams; hierarchy; polyarchy; teamwork; principle – agent problem; complete – incomplete information; performance measures; educator roles; success criteria.

INTRODUCTION

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In the world, where individuals, companies and nations are searching for policies that will bring them “comparative advantage” in order to survive in this global competitive environment, there is also a need for organizations to restructure so that all the resources will be utilized in their best uses. The economic term for the use of resources without any waste is productive efficiency. Allocative efficiency, however, is relative depending on the success criteria chosen. Two different systems may both be productively efficient within themselves with two different goals to be achieved. Therefore, it is the choice of “proper goals” that would create “comparative advantage” and differences in the “allocatively efficient” output, even when both alternatives may be “productively efficient”. A. Resource Allocation and Organizational Structure In this paper, we analyze 3 types of exams in Graduate School, namely entrance exam, course exam and qualifying exam in order to reach a better design of organization. In the analysis, we propose a different performance evaluation system based on “potential oriented – PO” rather than “comparative downgrading – CD” based on our recent paper [6] and show why the new performance evaluation system is

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superior to the older. Furthermore, we prove that the new performance evaluation system would actually lead to a new design of organizational structure with improved comparative advantage even with similar productive efficiency. Actually, the new performance evaluation system solves the “Chicken and Egg Problem” in organization theory, that is, does the product determine the performance measure, conduct and organization type, or the other way around? When we think about world problems, wee see that taking measures to prevent “Global Warming - GW” that concerns all people are above “National Concerns”, as well as eliminating “Poverty and Hunger”, or improving “Health and Education Level”. In this regard, the analysis presented in this paper may also have implications for tackling worldwide problems that affects the future of all people, by suggesting Teamwork as a good candidate for proper type of organization structure.

Abstract — In this paper, we search for different criteria that may be used in graduate school evaluations that will encourage students to learn and apply knowledge LAK rather than to focus on their getting a ― good passing grade GPG‖. We compare the performance of our 2 performance evaluation systems (one ―p otential oriented – PO‖ and the other ― comparative downgrading – CD‖) for 3 types of exams in graduate school – entrance exam, course exam and qualifying exam. In the paper, we show that the success of each performance measure depends on the criteria chosen for success, further determining the organizational structure leading to differences in comparative advantage and allocative efficiency even when each performance measure achieves productive efficiency.

B. Releted Literature As far as organization theory is concerned, there are two fundamental structures. The first one is one in which the decision making authority is centralized, and once taken, they are dictated down to the lower levels, which is represented by “hierarchy - H”. The second one is where decision authority is delegated, empowering the lower levels, as in “polyarchy - P”. Actually, these two organizational types resemble “series” and “parallel” connections in electrical circuits. In order for the electrical current to pass 2 serially connected resistances for example, it needs to pass through both of them. However, if the 2 resistances are connected in a parallel circuit, it only needs to pass one of them for the current to reach the end of the circuit. These two types of organizations have been analyzed in different platforms like “organization theory in management and economics”, or “reliability theory in electrical engineering”. Sah and Stiglitz [1] have pioneered the work in this area with their several papers, trying to establish a framework for performance comparison of these two types of organizations. Other authors [2], [3], [4] followed the work of Sah and Stiglitz, and searched for performance evaluations of these two types of organizations, by looking at the problem of performance comparisons from different perspectives. In the

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Asst. Prof. Dr. Akin Seber / (IJAEST) INTERNATIONAL JOURNAL OF ADVANCED ENGINEERING SCIENCES AND TECHNOLOGIES Vol No. 4, Issue No. 2, 010 - 013

We also have a paper in this area [5], which compares performance of the mentioned two types of organizations in an “incomplete information” setting, when “principle – agent problems” arise. Principle–agent problems arise when the agents who are assigned to do the task in the name of the principle, have conflicting interests with the principle. In economic theory, there are different instruments like “monitoring” and “incentive system design” to bring the interest of the two parties into alignment. Principle – agent problems (also named moral hazard) are one aspect of incomplete information problem, which is ex post; whereas the other important one is adverse selection, where the types of the agents are unknown before a contract is signed, an ex ante incomplete information problem [8].

II.

METHOD

A. Product, Perfromance Measure, Conduct and Organization Structure Framework The exams used in education systems are both an outcome of the current organizational structure as well as they determine the “success” or “failure” of the students in education. Actually it is possible to have different views about success or failure in education like “learning and applying knowledge – LAK” rather than getting a “good-passing grade – GPG”. In the light of the new performance measure “potential oriented – PO”, the current performance evaluation system “comparative downgrading – CD” appears to have negative implications on student learning. For example, we hear many criticisms from our students about the education system mainly based on 4 factors: 1- The education system is too much dependent on the performance in exams. 2- Studying material is organized around exam times leading to unequal distribution of study time throughout the semester with its stressful effects.

We have to note that hierarchy and polyarchy resemble the market structures of monopoly and perfect competition in economics. “monopoly - M” is a market structure where production of the good is done by a single firm. On the other hand, in “perfect competition - PC”, many firms compete in the market to sell their products. M and PC are endpoints in a continuum of market structures such that in between, there are others like “monopolistic competition - MC” or “oligopoly – O”. Similarly, “hierarchy – H” is an organization type where the decision making authority is centralized in a single person, resembling M. On the other hand, “polyarchy – P” resembles PC in that decision authority is totally delegated to lower levels. There might be other cases in between, where decisionmaking authority is partially delegated to lower levels.

structure in section II, give our examples of graduate school exams and analyze the effect of using different performance measures and educator roles in section III, and give our conclusions and further implications of the analysis in section IV.

Reference section, we only give one of the papers written by the authors and leave it to the interested reader to refer to others.

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Thinking in economic terms, Adam Smith [7] proposed total delegation of decision rights to the individuals. In his view of “invisible hand and markets”, when everyone acts in their own best interest, only those goods mostly valued by the society will be produced, which is allocative efficiency. His model is closer to polyarchy as decisions are decentralized and delegated to lower levels. John Nash [8] criticized Adam Smith by proposing that strategic actions by individuals and firms will lead to better outcomes and introduced “game theory” as the appropriate way to approach problems. However, even with “cooperative” rather than “noncooperative” version, the product is made separately by each individual or firm and the decisions are made to optimize the return for both parties. The work of John Meynard Keynes [9] may also be worth mentioning with his view of government taking an active role in markets. This seems to be similar to more centralized decision making and resembles hierarchy. There is also another organizational structure, Teamwork, which is different in the sense that there is a single product being produced by the unique and valuable joint efforts of the team members. Therefore, teamwork differentiates itself from the others where everyone is working together to produce a product, which is the common goal. In the following, we analyze success criteria used, the performance measures, conduct types, and organizational

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3- Memorizing material to get a good grade is more important than learning and owning the knowledge for future use with appropriate thinking skills. 4- The knowledge acquired before the exams is forgotten in a short time after the exam, further diminishing the importance of “knowledge” whereas getting a “good grade” becomes the “success” criteria.

With the above arguments, the education system actually appears to serve as a “signal for future employers – SFE” like in an adverse selection problem, where the types of students are unknown. In other words, the GPG system doesn’t give any idea about the LAK potential of students, and it even doesn’t encourage it.

TABLE 1. SUCCESS CRITERIA FOR DIFFERENT PERFORMANCE OUTCOMES

Learning

Not Learning

Good Grade

GS, LS

GS, LF

Bad Grade

GF, LS

GF, LF

In Table 1, we differentiate between the “success criteria” based on the application of GPG and LAK performance measures. Table 1 indicates that there is a need to differentiate the term “success” labeling it as “grading success” and “learning success” and similarly for “failure”. A performance outcome like “bad grade” and “learning” would for example be considered as “failure” in a GPG framework and “success” in a LAK framework. The results of different performance

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outcome combinations are indicated in the table. The terms GS, GF, LS, LF stand for grade success or failure and learning success or failure, respectively.

The first policy is based on the current conduct types used in the education system of “superior educator – SE” principle; considering the student to be lower in status than the educator; widening the gap between the student and the educator who is shown to be an ideal to be reached rather than a normal real person; by means of using comparative performance measures like the “comparative downgrading – CD”; denying the “uniqueness and valuableness – UV” of the student.

The second one is using absolute performance measures – like “potential oriented PO” policy; giving the educator a “facilitator and encourager – FE” conduct role; considering the student as a “unique and valuable – UV” being; making conditions convenient for him to reach his potential.

It is also interesting to note that the success criteria chosen, the performance measure used and conduct determine the organizational structure. We show this relationship in Figure 1 below. Success Criteria (Grade – Learning)

Conduct (Superior Educator – Facilitator Encourager) Organizational Structure (Hierarchy – Teams) Figure 1. The effect of having different success criteria, performance measures, conduct on organizational structure

The following are the two types of combinations of these three dimensions that are correct: Grade Success Criteria – Comparative Performance Measure – Superior Educator Role - Hierarchy Organizational Structure;



Learning Success Criteria – Potential Performance Measure – Facilitator Encourager Educator Role Team Organizational Structure.



Actually, the SE principle may only serve to satisfy the educator’s ego needs rather than helping the student reach his potential and be successful. In this system, even though the student obtains “success” in a GPG framework, he actually is a “failure” in either an LL or LAK framework. The SE framework creates and maintains the educator a position above the student with a distance between him and the student in a superiority context. In an organizational setting, this would imply formation of a ―Hierarchy” structure and ―superiority and command - control” systems.

Performance Measures (Comparative - Potential)

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Other combinations would probably have no performance improving effects. For example, to have PO performance measure when the success criteria is “grade” and organizational structure is “hierarchy” would have no improvements in “grade success”. Similarly, having CD performance measures when the success criteria is “learning” and the organizational structure is “teams” would again have no performance improving effect on “learning success”. Therefore, each performance outcome (good grade or learning) has to be analyzes with its performance measure (GPG or LAK), with appropriate conduct (SE or FE) and within its organizational setting (hierarchy or teams). Actually, in the “information age”, where the amount of information is increasing with ever greater speeds, one can not expect students to learn everything about a subject and it is not wise to expect such a thing from them. Maybe, “learning to learn – (LL)” would be a better measure in this respect, where students gain the ability to search for knowledge in any area that they would encounter in the future. However, GPG type of education success criteria still appears to be much inferior even when compared to LL policy rather than LAK policy. B. Conduct Analysis and Organizational Structure In the section below, we examine the three different exam types used in graduate school. Even though we choose the graduate school exams, the ideas are equally applicable to all types of exams in the education system. In our analysis, we use the following two different frameworks for performance evaluations:

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On the other hand, the FE conduct framework considers the student as a different, unique, and valuable human being and focuses on helping him reach his unique potential. There is no consideration of a gap between the educator and the student having respect for the differences between the two, which is their “separateness and individuality - SI”. Actually, if you asked a psychologist about the differences between these two approaches, he would probably diagnose the first one as a person who has had difficulty in the separation and individuation stage of pre-school childhood development, and would consider it as problematic and unhealthy (any childhood development book may be referred to in this regard). In an organizational setting, the FE framework would imply working together as a ― Team‖, in which the educator and the student act as “equal colleagues in the same team” towards the new “success criteria” of helping the student reach his potential. III. APPLICATION In this section, we analyze three different examples of exam types that we see in graduate school and the consequences of using different performance measures and educator roles. Example 1- The entrance exam for graduate school is the first exam held in graduate school. As an example, we will consider the situation of a student who already has a Masters degree in a different field and wants to pursue a Ph.D. degree in your program. The person, however, is told by the evaluation committee, within a CD framework, that she is only eligible for the Masters program with her qualifications. In order for her to continue with the Ph.D. program she needs to have a minimum of at least 3.5 out of 4 in the Masters courses, putting an uncertainty and a lot of stress about the future on her shoulders. An alternative PO strategy would be to accept

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Example 2- During the program students take exams in each of the classes like Midterm and Final. Consider the situation of an educator who gives the student a bad grade comparing her performance with other students, in a CD framework. While making comparisons, however, he doesn’t make considerations for the unique situation each student is in. For example, she is considering the situation of a Teaching Assistant, who has ample time in the department to study, with the performance of a banker, who only has time to study at night and during weekends, even though they may have similar capabilities to succeed in the course. A PO measure would for example evaluate the performance of each student within their given circumstances like in “Linear Programming Problem with Constrains”, and even guide them during the classes for easier learning methods.

 The relief of anxiety about the future;  The belief that committee members put in his potential;  The sense of belonging;  The knowledge that his previous efforts were not useless. IV.

CONCLUSION

In this paper, by using different examples of exams in graduate school, we do not encourage passing a person from an exam even though he doesn’t deserve it, but show that when different criteria are used for evaluating student performance and with different success criteria, a failing student may be considered successful in the exams. Most importantly, we argue that the student’s future work would be encouraged by the educators with their belief in his potential, rather than emphasizing the gap between the student and the educators in a superiority context that idealizes the educators and may only serve the ego needs of educators and their organizational status.

Example 3- Another type of exam during graduate studies is the qualifying exam - written and oral - that students take after the completion of coursework and before they start their Ph.D. thesis. For example, a student who answers questions in a poor manner in front of the Exam Committee who also has a poor performance in the written exam may be evaluated differently by the committee members with different performance criteria. Within a CD framework, the committee members would think that the student should have established a reasonable knowledge of subjects in the exams even if they do have research potential. They would fail the student with a poor exam performance, giving him a second chance to take the exam after 3 months. On the other hand, an evaluation under a PO framework may allow the student to pass the exam with the following considerations:

The results of these two approaches are totally different. In all of these three examples, the consequences of using a PO – FE system rather than a CD - SE system are similar. For the person who is taking the exam and with a PO - FE performance evaluation – educator role system, the person would be in a comparatively better condition to continue his studies for the following reasons:

her to the Ph.D. program, for which she is willing, and promise that the educators will guide and encourage her to get good grades. But, in this case, she will only get a Masters degree and may not continue the Ph.D. program if her grades fall below 3.5 out of 4.0.

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 The student has already established that he has good technical abilities both before he joined the program and during the courses he has taken during his studies;

 He has taken his undergraduate degree in Engineering from a good University in Europe, where teaching and evaluation criteria are much stricter;  He currently works as the general manager of an automobile company and has lots of responsibilities due to the economic crisis;

Furthermore, we think that it is possible to get implications from these examples for solving “Global Warming - GW” problem. Based on our analysis, the proper way to tackle GW may be ― teamwork‖ as the organizational structure, ―PO – FE policy‖ as the performance measure and team member role, and ―th e good of all‖ as the success criteria. REFERENCES

[1] [2] [3]

[4]

 The person is already 50 years old and had lots of responsibilities in different companies and taking the exam again after 3 months with the associated uncertainty and stress would mean a huge burden for him, which may cause him to leave the program etc..

[5]

Within the PO framework, the committee members may pass the student for the exam believing in his potential, nevertheless, telling him that he should convince each committee member within 3 months that he knows the material.

[7]

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[6]

[8] [9]

Raaj K. Sah, Joseph E. Stiglitz, “The architecture of economic systems: hierarchies and polyarchies,” American Economic Review, 1986, vol. 76, p. 716-727. Winston T. H. Koh, “Human fallibility and sequential decision making: hierarchy versus polyarchy,” Journal of Economic Behavior and Organization, 1992, vol. 18, p. 317-345. Ben-Yashar Ruth, Samuel I. Nitzan, “Quality and structure of organizational decision making,” Journal of Economic Behavior and Organization, 1998, vol. 36, p. 521-534. Bauke Visser, “Complexity, robustness and performance,” 2002, Tinberger University Discussion Paper. A. Seber, Ho-Mou Wu, “Incentives and organizational design: hierarchies and polyarchies,” working paper presented at Econometric Society Meetings, Winter 1995, Washington D.C., USA. A. Seber, Ahmet H. Kaya, “Performance measures in education and productive efficiency,” International Journal of Advanced Engineering Sciences and Technologies, March 2011, vol. 4, no. 1, p. 22-25. Adam Smith, The Wealth of Nations – great minds series, Prometheus Books, 1991. Andreu Mas-Collel, Michael D. Whinston, Jerry R. Green, Microecnomic Theory, Oxford University Press, 1995. John M. Keynes, The General Theory of Employement, Interest and Money – great minds series, Prometheus Books, 1997.

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