“Billy Beane: Changing the Game” Case
1. Based on the “Billy Beane: Changing the Game” case, explain how and why the Oakland A’s economic situation after 1995 shaped its: a) Compensation Strategies
In the world of major league baseball, Oaklands A's defied the laws of baseball economics. The team spent only $34 million (the 2nd lowest payroll) had won 102 games and lost only 60 in 2001. On top of this, they finished first in their division and made the playoffs. Major baseball teams would hire high school players than college players. This made high school players costly. Oaklands A's strategy is to hire College players to save on resources. They argued that college players have already gained substantial exposure and competition. Beane would recruit new drafts and sign them for less than the going rate. Because of budget constraints, Oaklands A's had to trade its top pitchers in exchange with the younger, much less expensive pitchers to try to remain within budget. Another interesting case for Oaklands A's is the recruitment of Scott Hatteberg. Hatteberg played six years with the Boston Red Sox. He got injured and lacked the prowess in throwing the ball effectively. He was, according to Boston Red Sox, a lame player and did not sign him up again. With this, Hattenberg's monetary value diminished and that is why Oaklands A's recruited him at a much lower salary (because there are no other takers). Unknown to the other baseball teams, Hattenberg is the missing puzzle in A's team. Oaklands A's noted that Hattenberg has an uncanny knack for getting on-base. b) Staffing (recruiting, selection, and retention strategies) strategies Oaklands A's staffing strategies was based on sabermetrics. Sabermetrics is a systematic, statistical approach in evaluating teams and players. Based on this science it was found out that the basis for judging the performance of the player should on-base percentage. A's recruitment would prioritize college players than high school...
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