Transaction costs, efficiency, and reaching the consensus.

Age of 17*, 1st generation of the school, and student council....

Before I say anything about the student council that I was associated with, I have to explain about the situation of my school back then. I and my friends were the 1st generation of the school, and we had no seniors above us. Also, the school type was 'Foreign Language High school'. This type of school exists in South Korea only (if there are other countries which has this school type, please comment). It is meant to be a school specializing in educating foreign language to the students, but because of the uniqueness of the type and since the government does not do very well on restricting the school agenda to focus on the foreign language, the school is mainly treated as a prep school for universities which prestigious students from all over the country. Normally, an ordinary high school would be able to accept students in the region it is placed in.

Back in 2007, I was a member of my high school's student council. Everything seemed so fresh. The fact that I was the first generation of the school which has brand new buildings made me quite happy compared to the getting enrolled in a ordinary school with seniors above me. I was eager not only to compete with all the prestigious peers in the school, but also to contribute to the newly formed school to make it into a better place. Luckily, I found some fellow students who had similar idea with me, and joined them to run for the school council.

I served as vice president back then, and the student body was consisted of total 9 members, including president, vice president, manager, clerk, accountant, and the leader of the 4 departments we divided. The school president election only covered the President and the Vice president. Manager, clerk, accountant were chosen by the President, and the head of the 4 departments were elected separately inside the department.

Our main role was to plan and organize school events, plan funding estimation for each departments, and communicate with the students and the teachers reciprocally. The special thing about the student council where I took part of was that I was the first generation of the students to be admitted into the school, and we were the first to create a body of council that served the school, as mentioned above. Although we tried laboriously, the beginning of the council was a total chaos; we lacked methods to communicate efficiently, and we were quite disorganized from each other.One of the main problem occurred during the distribution of the school fund to each departments. Everyone was brilliant in creating reasons for there department to get more funding, and we were perplexed to give which department how much fund. After little more than 3 months, most of the students who were participating eagerly in the department were divided into each faction, and didn't really even try to talk to each other.

The main cause to this problem was obviously lack of coordination with the other members in the council, since we were not really trying to work as a team at the beginning. Overcoming this gap was really arduous. Since we didn't really have the grasp of how to solve the problem 'professionally' (which here I mean as managing the coordination problem as an expert), all we could think of was to spend time more together as a team, and try to understand each other.

We managed to get it fixed by trying several things as time went by. We often went to our own workshops for strengthening our cooperation, and had more meetings not just for our works, but for our personal intimacies. Although we sacrificed a lot for the sake of cooperation, including our private times and putting our work back, we made a certain progress, not perfect though, in our cooperation. At the end of my duty as vice president, I personally felt that communication and cooperation were the key to a fluently working organization.

The perplexing theme: reaching the consensus

One of the transaction costs that I care about the most in an organization is definitely the cost to reach the 'consensus.' Organization is a group of people organized for an end or work. Although people are gathered and organized for the same interest, one cannot deny the importance of how people think so differently. Due to such differences among individuals, reaching the consensus, or the single goal of that organization, is painstaking but essential.

In my experience, the most wanted consensus in the beginning of the student council was to reach a reasonable conclusion that most of the people could agree to the distribution of the school fund. If the reasons to achieve the fund was not reasonable or of less importance, it would have been relevantly easy to make a decision where most of the people can at least understand. However, they all had their points in the statement, and even though the president tried to make a decision, there were always oppositions towards the final decision that was made. Since everyone moved toward their interest, everything got in everyone's way.

Thinking about it now, I guess this method of spending 'time' and building up 'understandings' worked in this situation because it was a particular situation called 'school council'. Although each departments were to gather up all the benefits they can get, we were tied up as 'a student in the school who gathered for mutual benefit for the school's well-being'. If it was a real-life politics, I am pretty sure these things wouldn't work at all.

The concept of 'whip', which was discussed inside the class, wasn't as efficient as it would normally had been. The manager of the council and I were doing the whip, but we were students before being a council member, and it was really hard to moderate the perplexing problems while doing our individual studying. I agreed strongly to the comment, "Whip has to invest a lot of personal time to moderate things between individuals or groups of different interests." Back then, the manager and I was too inexperienced and busy to efficiently moderate things.

The idiom 'Too many cooks spoil the broth.' comes into my mind as I reminisce of the young days as a moderator in the student council. Back then, I was too young and ignorant to such economic concepts. As of pondering it now with a better vision and wider knowledge, the transaction cost of consensus still looks perplexing and complex. Yet, it will be present in any organizations with prominent minds who wishes the well-being of the organization, and the solution will be the homework to many managers and moderators of the organizations.


*We Koreans begin our high school at the age of 17, and spend 3 years instead of 4. When I first entered high school, I was 17, just like all my peers.