B-School In Media Spotlight

Last Friday, President Neil L. Rudenstine released an 83-page, 24,000-word report outlining his vision for leading Harvard into the 21st century.

In provocative, often philosophical terms, the president calls upon his colleagues across the University to come together in a common effort to revitalize Harvard, building on and refining its strengths after decades of expansion.

"Given the centrifugal tendencies of our time--and the extent to which the fabric of so many institutions, systems, and even entire nations has been strained--it is critical that we find ways to foster unity within our diversity," Rudenstine writes.

It's only been a week. But already, there is reason to believe that the Rudenstine vision of fostering unity may be faltering.

Two years in the making, the president's plan of University-wide cooperation is no surprise. Still, at a university with a long history of decentralized financial and curricular leadership--where each of 10 faculties has traditionally been seen as substantially autonomous and independent--many see his vision as bold, even daring.

Now, just one week after it was made public, it's becoming clear why.

Even before the report's release, there weresigns of trouble. Two days earlier, a startlingstory in the Wall Street Journal suggested thatHarvard's Business School is on the verge of aserious crisis.

The Business School, historically the mostindependent division of the University, is widelyacknowledged as playing a critical role indetermining the success or failure of Rudenstine'sgoal of enhanced cooperation. With its large,wealthy and active alumni base, the school is alsoexpected to be a major force in the University'supcoming $2 billion capital campaign.

The Journal story, and several stories thatfollowed on its heels over the last week, havecalled into question how active the BusinessSchool's participation in both those efforts mightbe. Indeed, several observers have questionedwhether the school's dean, from his secure powerbase across the Charles River, is digging in hisheels against the centralizing forces ofMassachusetts Hall.

Citing a presentation the dean, John H.McArthur, made to Rudenstine in June of 1992, theJournal article indicated that McArthur fearsHarvard, the nation's leading business school, isin danger of falling behind the competition.

McArthur's 1992 comments--in which he hintedthat the Business School faced a possiblefinancial crisis and "flounderingmediocrity"--were released to the Yale School ofOrganization and Management as back-groundinformation for a case study of the BusinessSchool.

Indeed, last Thursday, the day before theRudenstine report was made public, McArthurparticipated in an unprecedented seminar at Yalethat put the Business School's alleged problemseven more plainly in view.

The dean's appearance at Yale--a news-worthyevent in itself, because McArthur rarely speaksin public--was all the more unusual because of thenature of the event. Here was arguably the mostpowerful leader in business education--a pioneerof the case study method--inviting M.B.A. studentsat a top competitor to critique Harvard's program.

The irony was not lost on the press, andMcArthur's visit to New York Times.

The next day, Friday, saw the release of theRudenstine report. But that wasn't what everyonewas talking about. That morning, a prominentlyfeatured article in the Journal suggested that theBusiness School was contemplating the creation ofa one-year MBA program, in a desperate effort toraise money.

The story, which cited unnamed sources at theBusiness School, turned out to be inaccurate. Butit did have the effect of drawing the mediaspotlight away from the Rudenstine report, awayfrom the needs of the University, and onto theBusiness School.

In short, McArthur's presentation stoleRudenstine's thunder.

That same day, the Business School's entirefaculty assembled in a closed-door meeting toreview the results of an internal report of theirown. Commissioned 18 months earlier by McArthur,the report recommended a dramatic overhaul of theschool's flagship M.B.A. program, including areduced reliance on its trademark case studymethod.

Results of the review were not supposed to bereleased until November 8, when the report is tobe distributed to the school's students. Instead,however, the recommendations made in the documentwere widely leaked, and reported in the Mondaypapers.

The coverage didn't stop there. By Tuesday, astrongly worded article in the Boston Globesuggested that McArthur's public appearance atYale, and his remarks at the June 1992 retreat,were a deliberate effort to derail Rudenstine'svision.

The release of McArthur's comments, the Globestory implied, was calculated to coincide with therelease of Rudenstine's report. The story painteda picture of a Business School, under McArthur,trying to throw off the yoke of Rudenstine'sleadership, and trying to excise itself from anysignificant degree of participation in the funddrive.

"McArthur is seeking to maintain as much of theschool's independence as possible," wrote Globecolumnist David L. Warsh '66. "A potentiallybrutal internecine battle is in the offing."

McArthur did not return a phone call yesterday.But Rudenstine vigorously disputes Warsh'sanalysis.

"I think the timing was purely coincidental,"Rudenstine says. "I'm sure John had no idea whenhe set up [the Yale visit] that my report wasbeing published."

"I don't think this bears on [the BusinessSchool's participation in the capital campaign] atall," Rudenstine adds.

In addition, the president says he believesMcArthur's comments about the Business School'sfinancial crisis were misinterpreted.

"The references to a financial crisis had asmuch to do with the past as with the present,"Rudenstine says. "I don't think the dean wouldcharacterize the school's economy as being incrisis right now."

But the dean's critics within the Universitypaint a different picture. Some suggest that thetiming of the last week's events has been lessthan ideal, and hint that McArthur's motives maybe suspect.

"The questions are fair," says one seniorUniversity official of Warsh's article. "I thinkthat anything that raises unnecessary issues isnot a happy event."

"I happen to think that in this case it may nothave been as purposeful, but who knows," says theofficial, speaking on condition of anonymity."It's hard to figure out."

McArthur's critics suggest that he has neverbeen fully cooperative in the capital campaign,and that the last week has merely served toheighten public awareness of his battle againstthe central administration.

"He believes that every tub should be on itsown bottom," says Business School alumnus WarrenAlpert, who last year pledged $20 million to theMedical School. "But that isn't what Rudenstinebelieves. Rudenstine believes that [resources]ought to be spread around."

Some observers suggest that Rudenstine isspending a significant amount of time trying toencourage McArthur's cooperation.

"It's not easy," says the high-rankingUniversity official. "I think that the presidenthas his goals and will push and is fairlyrelentless in finding all sorts of ways to try todo that. He'll keep working with him."

Others defend McArthur as deeply concernedabout what goes on at the University beyond theBusiness School.

"John McArthur is acting...in a way that showsthat he is trying to deal with the broader issuesof the University," says Education School DeanJerome T. Murphy. "Within that context he isacting like a team player."

Still, Murphy concedes, "I don't know what goeson when Neil Rudenstine sits down with JohnMcArthur to negotiate these kinds of issuesbecause I'm not privy to those conversations."

Provost Jerry R. Green--who last springadmitted that he thought it "a little bit strange"that he is not allowed to use the BusinessSchool's opulent new Shad Hall gymnasium--saysMcArthur is cooperating fully in implementingRudenstine's mission.

"I can say, in my experience...that BusinessSchool faculty members have been very open andeager to cooperate," Green says.

Even McArthur's critics acknowledge that thedean's participation at the University-wide levelhas increased some what under Rudenstine.

"Is the Business School doing a better job thanit was? Yes," says a senior University official."Is it doing as well as one might wish, or is itunhappy with what it might be doing? Those are theinteresting questions."

And, while McArthur's critics and friends maydisagree on how eager the dean is to cooperatewith Rudenstine, they concur that cooperation isvital to the Rudenstine vision--and to theUniversity's future.

Seen in that light, more negative publicitylike that of the past week is not likely to beviewed with a kind eye by Massachusetts Hall.

Concludes Alpert, "Is McArthur going to fightRudenstine? I don't know. But they're going tohave to come together, or both will be out ofjobs."

If there is a fight, McArthur has the financialmuscle of the Business School's alumni to use asleverage. He can also go public.

But Alpert suggests that Rudenstine holds thetrump card. "If McArthur doesn't carry his end ofthe business he's out. O-U-T, out. He'll beretired early. He's either got to listen toRudenstine or he's out."

The end game in the Business School battle maybe about power, and Rudenstine may ultimately havethe advantage. But between now and the end of thegame, there will be a fair amount of discussionabout the details of independence and cooperation.

How much McArthur can pay his faculty, whetherthe Business School can grant Ph. D's, and how,exactly, the Business School will share its donorswill all be topics for discussion. Whether that isa public discussion is up to McArthur.Crimson File PhotoTia A. ChapmanJOHN H. McARTHUR

Even before the report's release, there weresigns of trouble. Two days earlier, a startlingstory in the Wall Street Journal suggested thatHarvard's Business School is on the verge of aserious crisis.

The Business School, historically the mostindependent division of the University, is widelyacknowledged as playing a critical role indetermining the success or failure of Rudenstine'sgoal of enhanced cooperation. With its large,wealthy and active alumni base, the school is alsoexpected to be a major force in the University'supcoming $2 billion capital campaign.

The Journal story, and several stories thatfollowed on its heels over the last week, havecalled into question how active the BusinessSchool's participation in both those efforts mightbe. Indeed, several observers have questionedwhether the school's dean, from his secure powerbase across the Charles River, is digging in hisheels against the centralizing forces ofMassachusetts Hall.

Citing a presentation the dean, John H.McArthur, made to Rudenstine in June of 1992, theJournal article indicated that McArthur fearsHarvard, the nation's leading business school, isin danger of falling behind the competition.

McArthur's 1992 comments--in which he hintedthat the Business School faced a possiblefinancial crisis and "flounderingmediocrity"--were released to the Yale School ofOrganization and Management as back-groundinformation for a case study of the BusinessSchool.

Indeed, last Thursday, the day before theRudenstine report was made public, McArthurparticipated in an unprecedented seminar at Yalethat put the Business School's alleged problemseven more plainly in view.

The dean's appearance at Yale--a news-worthyevent in itself, because McArthur rarely speaksin public--was all the more unusual because of thenature of the event. Here was arguably the mostpowerful leader in business education--a pioneerof the case study method--inviting M.B.A. studentsat a top competitor to critique Harvard's program.

The irony was not lost on the press, andMcArthur's visit to New York Times.

The next day, Friday, saw the release of theRudenstine report. But that wasn't what everyonewas talking about. That morning, a prominentlyfeatured article in the Journal suggested that theBusiness School was contemplating the creation ofa one-year MBA program, in a desperate effort toraise money.

The story, which cited unnamed sources at theBusiness School, turned out to be inaccurate. Butit did have the effect of drawing the mediaspotlight away from the Rudenstine report, awayfrom the needs of the University, and onto theBusiness School.

In short, McArthur's presentation stoleRudenstine's thunder.

That same day, the Business School's entirefaculty assembled in a closed-door meeting toreview the results of an internal report of theirown. Commissioned 18 months earlier by McArthur,the report recommended a dramatic overhaul of theschool's flagship M.B.A. program, including areduced reliance on its trademark case studymethod.

Results of the review were not supposed to bereleased until November 8, when the report is tobe distributed to the school's students. Instead,however, the recommendations made in the documentwere widely leaked, and reported in the Mondaypapers.

The coverage didn't stop there. By Tuesday, astrongly worded article in the Boston Globesuggested that McArthur's public appearance atYale, and his remarks at the June 1992 retreat,were a deliberate effort to derail Rudenstine'svision.

The release of McArthur's comments, the Globestory implied, was calculated to coincide with therelease of Rudenstine's report. The story painteda picture of a Business School, under McArthur,trying to throw off the yoke of Rudenstine'sleadership, and trying to excise itself from anysignificant degree of participation in the funddrive.

"McArthur is seeking to maintain as much of theschool's independence as possible," wrote Globecolumnist David L. Warsh '66. "A potentiallybrutal internecine battle is in the offing."

McArthur did not return a phone call yesterday.But Rudenstine vigorously disputes Warsh'sanalysis.

"I think the timing was purely coincidental,"Rudenstine says. "I'm sure John had no idea whenhe set up [the Yale visit] that my report wasbeing published."

"I don't think this bears on [the BusinessSchool's participation in the capital campaign] atall," Rudenstine adds.

In addition, the president says he believesMcArthur's comments about the Business School'sfinancial crisis were misinterpreted.

"The references to a financial crisis had asmuch to do with the past as with the present,"Rudenstine says. "I don't think the dean wouldcharacterize the school's economy as being incrisis right now."

But the dean's critics within the Universitypaint a different picture. Some suggest that thetiming of the last week's events has been lessthan ideal, and hint that McArthur's motives maybe suspect.

"The questions are fair," says one seniorUniversity official of Warsh's article. "I thinkthat anything that raises unnecessary issues isnot a happy event."

"I happen to think that in this case it may nothave been as purposeful, but who knows," says theofficial, speaking on condition of anonymity."It's hard to figure out."

McArthur's critics suggest that he has neverbeen fully cooperative in the capital campaign,and that the last week has merely served toheighten public awareness of his battle againstthe central administration.

"He believes that every tub should be on itsown bottom," says Business School alumnus WarrenAlpert, who last year pledged $20 million to theMedical School. "But that isn't what Rudenstinebelieves. Rudenstine believes that [resources]ought to be spread around."

Some observers suggest that Rudenstine isspending a significant amount of time trying toencourage McArthur's cooperation.

"It's not easy," says the high-rankingUniversity official. "I think that the presidenthas his goals and will push and is fairlyrelentless in finding all sorts of ways to try todo that. He'll keep working with him."

Others defend McArthur as deeply concernedabout what goes on at the University beyond theBusiness School.

"John McArthur is acting...in a way that showsthat he is trying to deal with the broader issuesof the University," says Education School DeanJerome T. Murphy. "Within that context he isacting like a team player."

Still, Murphy concedes, "I don't know what goeson when Neil Rudenstine sits down with JohnMcArthur to negotiate these kinds of issuesbecause I'm not privy to those conversations."

Provost Jerry R. Green--who last springadmitted that he thought it "a little bit strange"that he is not allowed to use the BusinessSchool's opulent new Shad Hall gymnasium--saysMcArthur is cooperating fully in implementingRudenstine's mission.

"I can say, in my experience...that BusinessSchool faculty members have been very open andeager to cooperate," Green says.

Even McArthur's critics acknowledge that thedean's participation at the University-wide levelhas increased some what under Rudenstine.

"Is the Business School doing a better job thanit was? Yes," says a senior University official."Is it doing as well as one might wish, or is itunhappy with what it might be doing? Those are theinteresting questions."

And, while McArthur's critics and friends maydisagree on how eager the dean is to cooperatewith Rudenstine, they concur that cooperation isvital to the Rudenstine vision--and to theUniversity's future.

Seen in that light, more negative publicitylike that of the past week is not likely to beviewed with a kind eye by Massachusetts Hall.

Concludes Alpert, "Is McArthur going to fightRudenstine? I don't know. But they're going tohave to come together, or both will be out ofjobs."

If there is a fight, McArthur has the financialmuscle of the Business School's alumni to use asleverage. He can also go public.

But Alpert suggests that Rudenstine holds thetrump card. "If McArthur doesn't carry his end ofthe business he's out. O-U-T, out. He'll beretired early. He's either got to listen toRudenstine or he's out."

The end game in the Business School battle maybe about power, and Rudenstine may ultimately havethe advantage. But between now and the end of thegame, there will be a fair amount of discussionabout the details of independence and cooperation.

How much McArthur can pay his faculty, whetherthe Business School can grant Ph. D's, and how,exactly, the Business School will share its donorswill all be topics for discussion. Whether that isa public discussion is up to McArthur.Crimson File PhotoTia A. ChapmanJOHN H. McARTHUR