Moneyball. Sabermetric-Based Player Evaluation by Beane - Term Paper Example

?Moneyball Baseball is a common and most dominant sport in the US. Two teams of nine players each play the game using a bat and a ball. The players aim at scoring runs with the team having the most runs winning the game. A professional baseball game constitutes of nine innings where a one turn at a bat makes up one inning. Some of the major baseball teams in the world include the Pirates, Red sox, Yankees that play in the Major League Baseball, the American League, or the National league. Subject to the publicity, stiff competition, and economies of money involved in this sport, team managers adopt various strategies to win most games. Moneyball by Michael Lewis is a book that seeks to divulge information on how baseball teams should conduct their businesses in order to remain effective. However, a review article “Who’s on First?” by Thaler & Sunstein (2003) draws some criticism on the book. This paper will hence examine and evaluate the review article “Who’s on First?” by Thaler & Sunstein (2003). Sabermetric-Based Player Evaluation The sabermetric-based player evaluation used by Beane was a great shocker to other executives in baseball. In his evaluation, Beane took interest on how much a player was likely to contribute to his team's chances using scientific analysis (Thaler & Sunstein, 2003). In doing this, he relied on objective evidence rather than subjective evidence used by other executives. With the limits of human rationality and inefficient labor markets, Beane chose to ignore baseball's conventional wisdom in evaluating the performance of players to the surprise of other baseball executives. Indeed, in a conflicting situation between Beane and DePodesta's statistical methods of evaluation and other evaluation strategies by other baseball experts, statistical methods proved efficient to conventional statistics that were inefficient and often misleading (Thaler & Sunstein, 2003). As a result, Beane produced an amazing performance despite working on lower payrolls compared to other baseball teams. Indeed, Beane’s team, the Athletics was ranked eleventh in payroll(out of fourteen teams) and fifth in wins in the American League in 1999 but jumped to twelfth in payroll and first in wins in 2002 to the shock of other baseball executives. Ideally, Beane evaluation on players proved that players drafted out of high school are much less likely to succeed than players drafted out of college. Hence, against the practice of other executives, Beane did not recruit any talent from high school. Nevertheless, the new recruits that other teams neglected became great performers and other teams ended up buying them from Athletics thus improving its payroll. His ability to evaluate and recruit first-rate talent without a lot of money and using statistical methods to replace the lost players was also a great shock to other executives. In addition, the way Beane evaluated the performance of players in the field was also intriguing to other executives. He notes that the use of errors to evaluate the fielding ability of a player is so crude (Thaler & Sunstein, 2003). To this, he argues that a player may accumulate errors due to luck and thus in appropriation in evaluating his ability based on this. In addition, he notes that there might be luck in batting many runs subject to playing in good teams or having many opportunities. All this was a negation to the conventional beliefs adopted by other executives. Most shockingly, is the fact that Beane’s statistical evaluation of players led to his team’s greater success on the American League although Athletics had a low pay roll. Subsequently, major teams in the league like Boston Red Sox and Toronto Blue Jays are now hiring general managers who adopt Bean’s mode of evaluation (Thaler & Sunstein, 2003). Why Beane is Much More Effective in His Success Beane was much more effective in his success as compared to other baseball executives. This was subject to his statistical evaluation of players, disregard of the conventional wisdom in baseball, and objectivity to the sport (Thaler & Sunstein, 2003). The difference between Beane’s team and other executives manifest in a matrix of pitfalls and heuristics adopted by the two. Economically, Beane and his team used the statistical evaluation of players to obtain first class talent to Athletics at a very low cost. On the other hand, other executives use conventional wisdom to get highly rated individuals from high school at a higher price. Upon good performance by the first class talent by the Bean’s team, the richer teams use their resources to bid these successful players at a very high price thus rendering an economic benefit to the Beane’s team. Similarly, Beane’s team uses statistical evaluations to replace the lost players who equally perform better and attract huge sales. Hence, this trend of realizing success using low cost players and later selling them at a higher price is very effective for Beane’s team (Thaler & Sunstein, 2003). Another way is in the essence of a closer player in a close game. Where other executives use their closer players in the ninth inning, Beane’s team uses such players in the seventh inning. In both ways, this guarantees a win to any team. However, Beane’s team is aware of the systematic overpricing of the player in the closer role in the market place. Hence, they take a slightly above average pitcher and drop him into the closer's role. The player makes many saves, gets the overrating, and they subsequently sell him off at a high price. This shows the effectiveness of Beane’s team as compared to other executives who reserve the best players for the closer role. Moreover, Beane’s teams commit few mistakes as compared to other professional executives in other teams who commit colossal mistakes to the expense of the team. Unlike Beane’s team, that uses statistical evidence, other executives rely on their own experience, recent performance of a player, and biased observation to make decisions that affect the success and financial status of the team (Thaler & Sunstein, 2003). As such, though both teams may succeed, Bean’s team success is more efficient as it has less attached costs. Analysis of Professional or Personal Decision on Overestimations Indeed, there have been many financial instances where overestimation on the likelihood of success resulted to huge financial losses. Where success is presumable, an overestimation is not a good financial assumption. One should consider all the factors that attribute to the realization of success before narrowing down on one factor as the main contributor. In many cases, the success of any organizations attributes to the manager in charge. This is despite the fact that the employees contribute a lot to the performance of an organization. As such, a given company may make a decision to get the services of a manager who presumably led to the success of another company. The management will overestimate the likelihood of success from the target manager. In such a case, the company will use many resources to bid the services of the manager from the other company. However, this may lead to huge financial losses if the manager does not understand the operations of the new company, if his success was directly dependent on the efforts of the employees from his parent company, if the manager is less qualified for the new appointment, and if he lacks support from the employees of the new company. This will lead to low productivity, employee turnover, unnecessary costs of retaining or terminating the contract of the manager, and the loss on the initial acquisition cost of the manager. Conclusively, this results to huge financial losses to the company. Applications of Moneyball’s Management Lesson Indeed, Moneyball’s management lessons can be very fundamental in my endeavors. From Moneyball’s management I have learnt that as a leader I should be ready to make great risks, abnormal decisions, and personal sacrifices in order to succeed in a competitive environment. I have equally learnt on how to involve everybody in the team to ensure unity of purpose that will lead to success. Moreover, I will use the knowledge on the need to look for statistical, analytical, intellectual evidence in management and decision-making. I can equally use the little resources I have to generate huge returns in a field dominated by financial giants. More so, I can ignore the stereotypes and recruit fresh and talented persons for the job at hand using less resources. At the same time, I have learnt to give time a chance for my decisions to start realizing benefits. Where hard decisions are necessary, I should make and stand by informed decisions. In conclusion is should make detailed analysis of the employees and avoid making nonprofessional conclusions in management. Reference Thaler, R, & Sunstein, C. (2003).Who is on first. New Republic, 229(9), 27–30. Read More