Saturday, February 23, 2008

Economic Policy & Analysis

Week One – Case Study:

Public Financing of Sports Facilities

A group of private investors has proposed to bring an expansion Major League Baseball team to Portland. The “Portland Pioneers” will begin MLB play in the year 2012, if everything goes according to plans. The private investors are asking the State of Oregon and the City of Portland to contribute $400 million to the construction of a baseball stadium capable of seating 50,000 fans. The total cost of the stadium will be $600 million. While the site for the proposed stadium has not yet been identified, it is also anticipated that significant improvements to the transportation system will be required to serve the site, costing upwards of $200 million.

Using economic concepts found in the McKenzie text and in Economics in One Lesson, address the following issues in a case analysis. (There are no “right” answers, only approaches that use economic logic or do not.):

Baseball stadiums as public goods or private goods

Use of public funds for sports facilities: arguments for and against

The proper role of government in regulating (or not regulating) Major League Baseball

Internalizing the social costs and benefits of baseball stadiums

With a broad economic view of this issue it becomes apparent that few things are clear-cut. When looking to define the “Portland Pioneers” stadium as either a public or private good we must first state that only the seats within the stadium and the ground it is built on are private goods. The public good of the stadium is the ability to watch game played. Since most MLB games are televised, they become non-rival. That is to say that because I watched the game nobody else was excluded from watching the game. The seats inside the stadium are (at least during the game) limited or scarce, making them a private good.

One interesting addition to the broadcast games of MLB is that they are not truly free of cost. Broadcast companies are doing one or a combination of two things, requiring payment from the viewer in terms of Cable/Satellite TV or getting payed by advertisers. The advertiser is willing to trade for the exposure to the viewer who in turn will purchase goods or services from the advertiser. Just like the essay “I, Pencil” (McKenzie & Lee, pp42-47) where the intertwining and far reaching processes are needed to make a simple object, each market is made up of many other sub-markets that influence and effect one another.

The next question we must ask ourselves is, Should we use public funds to support this new facility? There are several arguments that would support using the public funds to help facilitate the building of a new stadium for the “Portland Pioneers”, unfortunately they are mostly intangible. According to Swindell and Rosentraub:

...there is little disagreement among policy analysts on the economic benefits from the presence of a sports facility and a team. Across three decades, a small group of scholars has concluded that neither teams nor the facilities they use are a source of substantial or even meaningful economic development.

The benefits that are seen have more to do with scarcity of having a MLB team in our city. Just having the option of going to a game in the future or having something to talk about and cheer for as a community. On game day the immediate area sees more traffic and possible would see an increase in sales or advertising, but that benefit is limited to a small number of days. Another benefit may be the addition of fan specific merchandise that has a higher value (or potential profit) than the non branded alternative.

Now that we have looked at some of the arguments, we must determine if the if the positive benefits that the public would see can be balanced with the cost, or the use of public funds. Since there is a limited benefit to those who live near the city with the MLB stadium, it may make sense to put a very minimal tax on the metro area or the state as a whole. This would capture the viewing benefit as well as community building. It seams like those who are getting the most benefit form the private good, the seating, should bear the largest burden. The “Portland Pioneers” and their owners will stand to make the most money from the new stadium, so they should also be responsible for a considerable segment of the expected $600M.

The city government does bear some responsibility of the road and utility upgrades because they are public goods. This expense of $200M should be divided among the general taxpayers of the city and the residents and business in the affected area. The division should be made according to the benefit received and the relative impact on each. For example $100M from a small neighborhood would be a significant amount, but take that out of 1.7M people and the burden is much less per person/business.

The government's responsibility in regulating any industry or body is doing one thing; manipulating the scarcity of a particular item thus changing how the market responds to that item. This manipulation does not allow the “free” market to operate at peak efficiency. Because of the loss of efficiency there are people who lose. It may be the taxpayer or the Team or even the city who did not get the new MLB team.

McKenzie and Lee (2006). Microeconomics for MBA's: the economic way of thinking for managers. New York: Cambridge University Press.

Swindell and Rosentraub (Feb 1998). Who Benefits from the Presence of Professional Sports Teams: The Implications for Public Funding of Stadiums and Arenas. Public Administration Review; Vol. 58 Issue 1, p11-20.

Saturday, February 16, 2008

Biblical Leadership & Ethics

Week five – Case Study:

The Leader as a Servant

1. In this careful demonstration of love (agape) to His disciples, why do you think Jesus chose to wash their feet instead of doing something else?

I believe that Jesus chose to wash his followers feet because it was something that could not be mistaken for just kindness. We can tell by Peters reaction that it was a job that is normally left for a slave of the house. To have this person who has been an incredible leader, and was thought to be the next King of Israel, do the lowest job they could think of was almost too much. They were probably confused and MacArthur says that they were probably embarrassed. I know when I am in an uncomfortable situation I can miss the point too, just like the disciples. Jesus was showing that leadership is not always the “power”, but sometimes the willingness to serve.

2. What does the example of love Jesus chose tell you about His perspective as a leader?

As Hunter pointed out in the book The Servant, Jesus was the greatest leader of all time. That is exemplified in how the world was permanently changed by Him and even to this day His influence (read Spirit) is changing people. Christ chose to be a servant leader. We are called to be like Christ in all that we do. It follows easily to say that we as believers, trying to emulate Christ through the power of the Holy Spirit should also practice servant leadership.

3. How does Jesus’ statement in verse 14 relate to the praxis principle? What outcome do you think Jesus was looking for from it?

This verse shows us that Jesus was very concerned about proper Hygiene. (sorry... I couldn't resist!)

Actually, Jesus knew that serving others was not a natural thing to do. It was important for these men to start practicing their service toward one another so that it would naturally progress to the people they would be leading in a few weeks, the first Church. By giving them the command to serve in this particularly lowly position, they truly learned to love through their actions. That is what the praxis principal is; acting in a particular way and the aligned feelings follow.

Jesus was preparing them to love and support one another. He knew that he would be dragged away and crucified in just a few hours. He also knew that when he was taken away the disciples would be scattered, and would need the support of each other in the next few days. This love would then transfer to how they served others in the carrying out of the Great Commission.

4. Looking at this brief episode as Jesus’ seminar on leading from authority, how would you organize and present its key concepts in contemporary terms to your own audience so they could understand them?

Training: (John 13:1-3~Jesus needed to prepare his followers to lead) Look for weakness and train to make them strengths. Make sure followers are prepared to take your place, cross train. Have a forward plan that includes “plan-b”.

Demonstrating: (John 13:4-8~Jesus showed his followers through action) Do what you expect your followers to do. Don't be hypocritical.

Defining: (John 13:9,10~Jesus makes a distinction between wants and needs) Clearly state what the objectives are, and make sure they are written down and understood by all.

Implementing: (John 13:12-14~Jesus made serving a policy for everyone) Ensure everyone within the organization is aware of the policy. Plainly state the expectation as well as the results of not meeting the expectations.

Exemplifying: (John 13:15-17~Jesus practiced the policy and told them “do as I do”) Carry our the policy visibly and make sure it is clearly in the center of everyones attention.

5. How does the “payoff” for leading from authority mentioned by Hunter in the final chapter of The Servant relate to the following verses?

Matt. 10:39, 16:25; Mark 8:35; Luke 9:24, 17:33; John 12:25

Generally speaking, when a key concept is presented in scripture, it is repeated or restated in keeping with its importance. The number of times this idea occurs suggests that this concept is one the Lord wants us to understand and practice during our time to serve Him here.

For believers, our payoff will be spending eternity with Christ. We are to use any and all skills of leadership not just to improve our ability to be successful in a work environment but to lead others to Christ. We can be leaders with authority and people will trust us, they will try to understand what makes us different. We must take advantage of that questioning. It is how seeds are planted and are cared for.

6. To sum up, if you begin to look for ways to establish authority and then lead from it in your present circumstances, what will that look like? How might it be different from the way you interact with others now?

Clearly the improvements would be seen in how people respond to me when I am in leadership roles. If I am able to establish the authority with people, they would trust that I not only say I have their best in mind but I actually do.

The things I will have to change are:

- Becoming better at analyzing needs vs. wants. Then to act accordingly with a good explanation of why the decision was made.

- Listening and removing my inner dialog to hear what the person is trying to communicate.

- Keeping my word. Do what I say I will do, when I say I will do it.

- Making sure that my goals and the company goals are clearly communicated.

- Be more Christ like!

Friday, February 15, 2008

Biblical Leadership & Ethics

References

Bansal, P. & Kandola, S. (March/April 2004). Corporate social responsibility: Why good people behave badly in organizations. Ivey Business Journal 68, (4). 1-5.

This article highlights the corporate accounting scandals at Enron and Arthur Anderson. Autopsy of these companies' scandal reveals organizational responsibility stems from individual irresponsibility and a culture of “bystander” syndrome. This is where immoral activities are accepted because nobody feels like it is their position to intervene, there is no clear process for responsibility or it is accepted within the company as the norm.

Berenbeim, R.E. (Sep. 2006). Ethical leadership: Maintain an ethical culture. Leadership Excellence 23, (9). 19-20.

Berenbeim speaks to the “Revised Sentencing Guidelines” as the standard for executives accountability and personal responsibility to ensure a companies culture is fostering ethical behavior. He uses Neru as an example to modern executives, highlighting three lessons on debate, sustainability and personal responsibility for decision making. Accountability is the standard for ensuring we all act according to ethical practices.

Buchanan, L. (May 2007). In praise of selflessness: Why the best leaders are servants. Executive Excellence 29, (5). 33-35.

This article gives a peak at the role that servant leadership has in a culture where skilled people are valued and are looking for a place where they can make a difference. Serving those around us will enable us to gain a new perspective and get better answers to the problems we face in our business lives. Three paradoxes are presented that go against traditional thinking but match up with scriptures.

Covey, S. (Dec. 2006). Servant leadership: Use your voice to serve others. Leadership Excellence 23, (12). 5-6.

This article bridges the gap between servant leadership and the idea from Moral Intelligence of the moral compass. Covey suggests that when we live and act according to the principals of “nature” (I will substitute God's Word). Our formal authority becomes more effective because people follow for the right reason; genuine commitment, not fear.

Chimaera Consulting (n.d.). Famous models: Situational leadership. Retrieved January 31, 2008 from: http://www.chimaeraconsulting.com/sitleader.htm

This site give an overview of the Situational Leadership model and explains the leaders side of the model. It helps identify where leaders can improve the interaction with employees to achieve the desired result.

Crainer, S. (Winter2003). Succeeding with values. Business Strategy Review 14, (4). 3-4.

This interview with Randall Tobias, gives real examples of what a CEO must do. They are truly charged with communicating the company vision and ensuring that each person is marching in the same direction. He states that only ethical leaders are truly successful.

Gdich. (2007, August 16) Situational leadership training [video file]. Video posted to http://www.youtube.com/watch?v=eYyDWP2-ywE

Introduction to an ASME training session on particular style of leadership.

Hersey, Paul. Interview. Situational leadership: Conversations with Paul Hersey. By John R. Schermerhorn, Jr. Center for Leadership Studies, 2001.

Interview with one of the founders of the “situational leadership” model. Hersey developed the approach while trying to train technical staff to take the next step and become productive leaders. He realized that there was no “golden” strategy to being a good manager, but instead each situation needed a specific skill to be used. By employing the correct skill for the problem anyone could become a successful manager.

Hunter, James C. (1998). The servant: a simple story about the true essence of leadership. New York: Crown Business.

This book gives insightful, provoking thought on what it is to be a servant leader. It gives the ideology needed to understand what is truly behind our own psychological perspective on leadership that has be erroneously created from external influences. It also helps us understand how others view the world and give us ways to deal with differences in perspective.

Lennick D. & Kiel F. PhD (2007). Moral intelligence: Enhancing business performance & leadership success. Upper Saddle River, NJ: Wharton School Publishing.

This book was written to help leaders understand that a strong ethical standard is necessary when dealing in business when long tern success is desired. The authors point out that it is important to work on the ethical portion of our belief system to ensure that it does not suffer from neglect. The book also included the Moral Competency Inventory (MCI) that enable the test taker to evaluate the personal areas of strength and weakness. All choices/decisions must pass through an ethical filter to ensure we do not violate our Moral Compass.

Lovin, R. (2006). Faithful and effective. Christian Century, 123(12), 33.

Levin uses headlines from recent days to show that all Americans seem to be pulled by the measurement of effectiveness. Often times, the measure is place much higher than we are capable and some turn to deceit to close the gap. As believers we must focus on being faithful to Christ and that is how we may be truly effective in our calling on earth.

Murphy, P.E. & Enderle, G. (1995). Managerial ethical leadership: Examples do matter. Business Ethics Quarterly 1, (5). 117-121.

A biographical description of how the former CEO of Johnson & Johnson, James Burke handled the transition of power and the deadly crisis of poisoned Tylenol, twice. He was a man of ethics and made it a priority form his first day in his leading role. The article also highlights 3 other CEO's who showed superior ethical behavior.

New American Standard Bible, Updated edition. La Habra, Ca: The Lockman Foundation, 1995.

Nehemiah is an incredible book that demonstrates the plan of God carried out through one man. Nehemiah was able to get direction from God and make a plan to accomplish his task in a very short time. He meticulously planned the entire task and made sure all his bases were covered so that he could focus on the difficult issues that came up during the project.

Patten, R.M. (Sept./Oct. 2004). From implicit to explicit: Putting corporate values and personal accountability front and centre. Ivey Business Journal 69, (1). 1-4.

Article written by an executive within a large Canadian bank describing what their institution had done to prevent corporate scandal and induce a culture that truly cultivates ethical behavior. They have made and declared the code of conduct that each employee must act according to. They also use the results of company wide surveys to identify what topics of ethical behavior should be concentrated on. We need to place the ethics of our organization on the front burner so problems are prevented.

Rhode, D.L. (Jan. 2007). Moral leadership: Inspire ethical behavior. Leadership Excellence 24, (1).

Ethical Leadership does effect the financial position of companies although it is hard to measure. Many ways to ensure company wide ethical standards were discussed but it was noted that unless leaders show ethical behavior the culture will be lacking in ethical actions on all levels. Leaders have many opportunities to show their commitment to ethics if they only look.

Rowe, R. (Feb. 2003). Leaders as servants. Management 50, (1).

This short article reviews the 10 characteristics of a servant leader as defined by Greenleaf, a leader in the servant leadership movement. It was interesting to note the similarities as well as differences when compared with the I Corinthians 13 definition of Love, agape love. The article does little more than state the characteristics and present the servant leadership model as worthy of consideration.

Tonge, A., Greer, L. & Lawton, A. (2003). The Enron story: You can fool some of the people some of the time… Business Ethics: A European Review 12, (1).

This article give an overview of the Enron scandal. It raises the question that many parties share responsibility for the downfall. Ultimately it was the greed of leaders that brought them to their knees but analysts, banks and their auditors added to the unethical practices. The entire Enron problem has opened the books of our entire economic system to prevent such failure in the future.

Wheatley, M. (Jul. 2004). Servant Leaders: What has to change now? Executive Excellence 21, (7).

This article gives seven keys to servant leadership. The author seems very humanistic in her approach to servant leadership, but makes a few good points about the benefits of relationships. Wheatley gives some examples of forgiveness and restoration of things lost that support her views on the humanistic side of this leadership methodology.

Zandy, A. (July/Aug. 2007). If you want to lead…learn to serve. Debt 22, (4). 24-25.

This article gives practical examples of how to create a culture of servant leadership. Zandy points out that that the idea was based on Christian ideals but many other religions have used the same idea to show the power of becoming a servant.

Saturday, February 9, 2008

Biblical Leadership & Ethics

Week Four – Case Study:

Nehemiah: God's Project Manager

1. As Nehemiah became aware of what God was calling him to do, what sequence of actions did he take before finally receiving authorization and committing to go? Would this approach still be appropriate today?

Nehemiah's first action was to pray and seek what action God wanted him to take. He was able to carefully prepare his plan. It was a fully planned action that he wanted to take and was able to develop all the details that he would need to accomplish the task. He estimated how long his task would take and what supplies he would need to complete the job. By asking the King for letters of approval to accommodate each leg of his journey, the building project, and finally the ongoing needs of the city.

Today this approach would still seem to be appropriate. It is to everyones benefit if the plan is well thought out and planned in a way that identifies where possible problems may arise and have the action ready when difficult circumstances are presented. I tend to be a planner by nature and have recently been forced into acting before the plan is laid. It has helped me to improvise on the go, but it has not been easy or comfortable for my employees to follow that kind of leadership.

2. When Nehemiah had assessed the task God called him to undertake, how did he exercise exceptional leadership in enlisting support and motivating his followers?

One of the keys to the successful completion of the plan was enlisting the support of the highest possible authority. This guy (the king) had power and by his reaction to Nehemiah, some authority as well. It was important that the King was on his side from the beginning. Once Nehemiah was on the way and gathering his countrymen, he was continually reminding them of truth that God had promised them. This was the place of His dwelling and the land he had promised to the Israelites many years before. Although the encouragement helped, it was also the input that he solicited form the people and getting their “buy-in”. Then he was able to delegate the project to the people who would do the work and gave personal responsibility that mattered to each one. It is interesting to note that many of the people who were working on rebuilding a section of wall were building the section that protected their personal home. Not only were they rebuilding the city but they were also fulfilling the psychological need for security.

3. Much of what can be taken from the record of Nehemiah’s actions is implied and not directly stated. From the way he organized this project, what can you infer about his ability to balance the dynamics of task and relationship with his followers? Use specific examples.

He was trying to accomplish a task, rebuilding the wall around Jerusalem. To do this required a lot of planning and the participation of many people. He got them personally involved by reminding them who they were as a nation, reinforcing the promises they had received through their fathers from God, and getting them to contribute to the well being of their families by fixing the wall nearest their homes. I think all three of these contributed to the personal involvement of each person and their willingness to sacrifice for the persecuted nation whom God loved.

4. Based on the actions he took when he learned that external enemies planned to disrupt his project and harm his workers, what needs did Nehemiah meet for them that enabled them to stay on task? What steps did he take to meet them?

Safety during the building project was always an issue. They were in a land occupied by other nations that were desperately trying to keep them down. These are the same people God had earlier defeated when he gave the Israelites their promised inheritance. Now because of sin, God had allowed them to dominate their nation and even taken them into captivity. When Nehemiah heard of the plan to attack the workers, he did two things correctly. First, he told each person that the risk of attack was present, which was probably not a great way to encourage a people who are working at an incredible pace to keep the tight schedule. Although it was uncomfortable for Nehemiah to tell them the opposite of what they wanted to hear, he was able to establish trust that he was looking out for the workers. Then, he informed them of the plan to mitigate the severity of the attack. Posting guards and having each man work with a weapon handy in case of attack, enabled that fear to be reduced. They had a plan and were ready for anything but they also knew that God was ensuring the success of the project.

5. In the course of obeying God’s calling and completing the task he was charged with, Nehemiah received delegated power from the king. How did he go about establishing the authority he needed to be a credible leader?

Once he had rebuilt the wall the next task was to reestablish the temple and the city in general. He served 150 men at his table and went through incredible amounts of food. It is noted that Nehemiah was serving these people from his own pocket and on top of that he did not even collect the “taxes” he was authorized to take. His entire focus was on ensuring the people who would be left to run the city were prepared. He preached many sermons to expose some of the problems the rulers had fallen into and God turned their hearts to actually do the right things. They stopped forcing those who were in debt to sell their property or their families into slavery. All of Nehemiah's actions showed that he was more concerned about the people and God's promise being fulfilled than his own personal gratification.

6. When immoral and unethical behavior threatened to destroy the project from within, how did Nehemiah resolve the crisis? What different roles did his power and authority play?

While the building project was still ongoing the leaders of the city were forcing the builders to continue paying “usury”. These were the same builders who were making the sacrifice of their time and willingly putting themselves at risk of death for the safety of the rest of the city. God used the words of Nehemiah to soften and change the hard hearts of the unreasonable nobles. They turned from the unethical ways and became supporters of the cause. That is where he was able to use the authority gained earlier to change the thinking of these people. Then he exercised his power by forcing them to commit to the change of heart; he made them swear before God that they would then support them. If he had not forced the oath, it is likely that the leaders and nobles would return to the unethical policy in a short while.

7. When the building project was complete, what steps did Nehemiah take that demonstrated his concern for the sustainability of the rebuilt city? The sustainability of the temple and the priesthood?

Sustainability was obviously important to Nehemiah because every action that he made was in support of the people and the processes God required for Israel to continue. He set up the food and supply chain for the Priests and the others who served in the Temple. He allowed the people to keep more of their wealth by not collecting the taxes that he could rightfully collect. He gave incentives to entice people back to the city to ensure that the infrastructure would be cared for. All these actions were for the people, but they were directed by God. He was the master planner but Nehemiah was ready to listen, serve and carry out the His will.