Artificial Life (2)
Game Theory (1)
Movie Reviews (67)
Outer Space (4)
Quantum Theory (5)
Special Relativity (1)
Science Fiction (4)
Three Cheers for the Private Sector!
An experiment in social organization: trying to get one's laptop socket repaired by (a) the non-profit sector (U.C. Berkeley), or (b) the private sector (Apple Computer).
The Private Sector: Apple Computer's Mail-in Repair Service:
The Non-Profit Sector: U.C. Berkeley's Workstation Hardware Support Group
From an economist's point of view, this is an excellent example of just why it is that private-sector businesses are so much more efficient on average than public-sector or non-profit-sector bureaucracies. I'm not going to go back to WHSG for any service, ever again, if I have any control over things: from my perspective--if I am, as I think I am, willing to pay $40 a day to get my laptop fixed and back faster--WHSG has burned $300 worth of well-being by its (a) changing its mind about what to do without talking to me, and (b) failing to make the minimal effort needed to make sure that I was informed about the change of plan. Since they've just cost me the equivalent of $300 for no reason--how have they benefitted from this? Not at all--I don't want to see them again.
But do they care? Does their manager care that the next time I need a machine fixed, I won't go to WHSG? Almost surely not. The flow of machines into WHSG is by and large a command-and-control process dictated by Berkeley's internal bureaucratic procedures. The flow of machines into WHSG is not directly connected to his budget. So there are no costs to him of having me annoyed. There is a--small--cost involved in speaking sharply to his technicians, and saying: "Geez. Make sure people know what you are doing if you change the plan." But the only thing impelling him to make that effort to improve communication between technicians and people wanting their machines fixed is the subjective feeling of doing a good job, and that plus $2.00 will barely get you three stops on the BART at rush hour.
At this point someone is sure to raise an objection: "Isn't Apple Computer a big bureaucracy too? Why shouldn't it be as rude, as inefficient, and as careless with its customers as Berkeley Workstation Hardware Support?" The answer is that the pressures are there, but that they are offset by market discipline. If Apple does not sell its products and services to buyers, it dies as an organization, and everyone inside Apple knows that their jobs depend on the organization's profits in a very real and immediate sense. So there are constant pressures on Apple to make its customers happy wherever it can do so cheaply--and putting the status of repairs-in-process up on Apple's website in real time is one thing that makes customers happy, and is cheap and easy to do.
Now this doesn't mean that everything should be privatized: you don't want ruthless and efficient concentration on improving the bottom line $$$$$ figure everywhere. But surely Workstation Hardware Support should be privatized. Surely it's in no one's interest to have repair technicians who have never been told that keeping customers happy when they can do so easily and cheaply is part of their job, and that making sure customers know what is going on is an easy way to keep them happy.