A Constructive Summer at HBS
Finance Conference Explores Research Methodlogies
Four Promoted to Full Professor
New Chairman Updates Developments in MBA Program
Alumni Ticker: A Random Sampling of HBS Graduates in the News
Historic Gift from HBS to New Radcliffe Institute

A Constructive Summer at HBS

Two highly visible projects took shape on campus this past summer - one forward looking and one aimed at preserving a historic campus landmark. The first is the Spangler Center, the new campus center that is rapidly rising from its recently dug foundation between Aldrich Hall and the School's parking lot.

As many as one hundred workers have been laboring on the site each day, pouring the concrete foundation and positioning the structural steel beams and columns. While the summer's extreme heat occasionally halted work early - temperatures in the pit reached as high as 130 degrees - excavation was completed on July 1. HBS chief of operations David Moffatt describes the site as an easy one to work with. "We are operating in a limited space, but because it's an on-campus site, we don't have the kind of constraints one would find, for example, in downtown Boston," he explains. Praising contractor William A. Berry & Son for a "superb job," Moffatt has been pleased with progress on the building. "The whole project has been characterized by good fortune," he says.

While the outside structure is going up, planning has also begun for the interior design of the building. "There's a lot going on behind the scenes," notes Angela Crispi (MBA '90), assistant dean, chief planning officer. "We're choosing color palettes and making decisions about furniture, flooring, and lighting fixtures. We're also planning the landscaping around the building." Robert A.M. Stern Architects, based in New York City, is responsible for both the interior and the exterior design of the new building, which has been made possible by the generosity of C.D. ("Dick") Spangler, Jr. (MBA '56), and his family.

Not far from the Spangler construction site, work was also under way several stories up. Harvard pedestrians - both near and far - may notice a new gleam in Baker Library's recently restored bell tower. RJA Painting, based in Watertown, Massachusetts, repaired, painted, and applied fresh gold leaf to the structure, completing the job in mid-August. According to Dave Moffatt, the 55-foot-tall cupola - last refurbished in the summer of 1983 - was due for some tender loving care. "The weather conditions in this region necessitate restoration about every fifteen years," he explains.

Gilder Richard Pawlick applied the gold leaf to the bell tower's dome and spire. Pawlick, who also restored the dome on the Massachusetts State House, notes that the Baker Library restoration required between thirteen and fifteen rolls of the shiny stuff. "Each roll is 41/4 inches wide and 67 feet long," he says. "In order to achieve optimum color and luster, it is very important to properly prime and then size the surface for the right level of tackiness before laying down the gold leaf." After pressing on the paper-thin strips of gold, Pawlick burnished the dome with a soft brush before giving it a final polish.

Built in 1927, the Baker Library bell tower was one of three planned for the campus. However, budget constraints squelched plans for bell towers on the river residence halls. "It's good to see the Baker Library cupola returned to its original splendor," says Moffatt, who notes that the Cotting House cupola - which does not have a bell - is slated for restoration next year.

by Judith A. Ross

Finance Conference Explores Research Methodologies

While HBS scholars have long appreciated the value of field-based research, the broader academic community in the field of finance has been slower to accept this method of inquiry. Field-based research, which closely studies the actions and decisions of one or a handful of firms, accounts for less than 2 percent of all research published in the leading finance journals. Accordingly, in early July, HBS finance professor Peter Tufano organized a conference for eighty researchers from the United States and Europe to discuss finance research methodologies with special emphasis on the role of field-based research. Its purpose was not to resolve issues on appropriate methodologies for research but rather to begin a discussion to stimulate thinking and debate.

The conference, titled "Complementary Research Methodologies: The Interplay of Theoretical, Empirical, and Field-Based Research in Finance," focused on five subjects: corporate capital raising, corporate restructuring, extracting information from security prices, risk management, and security design. The fifteen papers presented at the conference, chosen by a committee of eminent scholars, showcased a mix of research designs: some used traditional methods of inquiry - mathematical theory or statistical analysis, for instance - while others employed interviews, primary company materials, surveys, and close examination of the trading of individual securities. A selection of these papers will be published in a special issue of the Journal of Financial Economics, a leading finance journal and joint sponsor of the two-day conference.

"We're going to discuss the papers themselves to advance our understanding of the topic at hand," said Tufano in his opening remarks, adding, "We also want to step back and consider the broader agenda of how we carry out our research. The papers presented will be our vehicle for discussing academic decisions, just as case studies are a vehicle for advancing our understanding of business decisions."

The conference allowed scholars from eighteen universities to present their research. A strong contingent from HBS provided examples of the intensive use of field-based methods of inquiry. In a session on corporate restructuring, HBS professor Stuart C. Gilson discussed how financial analysts and the financial media responded to an innovation in accounting pioneered by a prominent airline. At a session on information and prices, HBS associate professor Benjamin C. Esty presented a paper detailing how the price of an unusual security could be used to extract the market's best guess of the size and basis for the resolution of a large lawsuit. Another session included a paper by Tufano, HBS assistant professor George Chacko, and HBS doctoral candidate Geoffrey Verter that looked at how risk management theory could be applied to understand a biotech firm's decision to buy call options on its own stock. In the final session on security and market design, HBS professor Kenneth A. Froot used a careful examination of a single transaction in the emerging market for catastrophic risk bonds to motivate a search for explanations for anomalies in the pricing and structure of this market. Another highlight of the conference was a keynote speech by Nobel Laureate and HBS professor Robert C. Merton that emphasized how finance research leads finance practice.

"It was refreshing to take a step back and think deeply about what we are doing," said one participant. "I had expectations that we were going to have a conference to explore the potential usefulness of clinical methodologies. It was far more than I expected. The experience will have an impact on the way I think."

The conference also featured a parallel cyber component for those unable to attend. The still-active conference Web site (www.hbs.edu/hbsjfe), which will remain posted through the end of the year, gives visitors an opportunity to download papers and presentation slides, hear the sessions, and post comments using online message boards.

Four Promoted to Full Professor

Clayton M. Christensen has a joint appointment in the Technology and Operations Management and General Management units. His research focuses on the management of technological innovation, developing organizational capabilities, and finding new markets for new technologies. His 1997 book, The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail, won the Global Business Book Award for the best business book published that year. Christensen is currently head of the required General Management course.

Prior to joining the HBS faculty in 1992, Christensen served as chairman and president of Ceramics Process Systems Corporation (CPS), a firm he cofounded with several MIT professors in 1984. A former Boston Consulting Group project manager, he was instrumental in founding the firm's manufacturing strategy consulting practice. In 1982 he was named a White House Fellow and served as assistant to U.S. Transportation Secretaries Drew Lewis and Elizabeth Dole.

Christensen holds a BA with highest honors in economics from Brigham Young University and an M.Phil. in economics from Oxford University, where he studied as a Rhodes Scholar. He received an MBA with high distinction (1979) and a DBA (1992), both from HBS.

Stuart C. Gilson has been a member of the HBS faculty since 1991. His research focuses on how companies can create value by restructuring their assets, operations, and financial obligations in response to competitive challenges and major shifts in the business environment. He has written on a broad range of restructuring topics, including corporate bankruptcy and debt workouts, tracking stock, equity spin-offs, corporate downsizing, bank mergers, and employee buyouts. Currently, he is studying the factors that are driving the surge of restructuring activity in Europe and Asia and how managers can use restructuring techniques to help the stock market more accurately value their companies.

Gilson, who was previously on the finance faculty at the University of Texas at Austin, has taught courses in corporate finance, mergers and acquisitions, and investment banking. At HBS he teaches the course Creating Value through Corporate Restructuring in the MBA and Executive Education Programs. He also chairs the executive program Finance for Senior Executives and has taught in the Advanced Management Program.

Gilson's research has appeared in numerous publications, including the Journal of Finance, Review of Financial Studies, Journal of Financial Economics, Financial Analysts Journal, and Journal of Applied Corporate Finance. His paper "Investing in Distressed Situations" received the 1995 Graham and Dodd Award. Gilson holds a BA in economics from the University of Manitoba, a master's in economics from the University of British Columbia, and a Ph.D. in finance from the University of Rochester.

Josh Lerner has a joint appointment in the Finance and Entrepreneurial Management units at HBS, where he has been a member of the faculty since 1991. His research focuses on venture capital organizations and their role in transforming scientific discoveries into commercial products. Much of this research is collected in The Venture Capital Cycle, a forthcoming book from the MIT Press. He has also studied the impact of intellectual property protection, particularly patents, on the competitive strategies of firms in high-technology industries.

Venture Capital and Private Equity, an elective course Lerner developed and introduced into the HBS curriculum in 1993, has enjoyed widespread popularity and is now taught in two sections. In addition, he serves as faculty chair of the Focused Financial Management series, a set of targeted executive education courses, and designs and teaches an annual course for executives on private equity.

Before earning a Ph.D. in economics from Harvard in 1991, Lerner worked for several years on issues concerning technological innovation and public policy at the Brookings Institution, with a public-private task force in Chicago, and on Capitol Hill. He is a faculty research fellow in the National Bureau of Economic Research's Corporate Finance and Productivity Programs and co-organizes its Science and Technology Group.

A member of the HBS faculty since 1990, David A. Thomas teaches organizational behavior and human resource management. He is a noted authority on executive development, mentoring, and the challenges of creating and effectively managing a diverse work force. His articles and case studies on these topics have appeared in numerous scholarly journals and books, including the Harvard Business Review, Administrative Science Quarterly, and The Handbook of Career Theory.

Together with his coauthor, HBS professor John J. Gabarro, Thomas recently published Breaking Through: The Making of Minority Executives in Corporate America. From 1993 to 1998, he taught and developed materials for the widely subscribed second-year elective, Self-Assessment and Career Development. The course uses cases, experiential exercises, and assessment instruments to guide students through an examination of their career interests and motivations and increases their understanding of how to manage their own careers.

Before joining the HBS faculty, Thomas was on the faculty of the Wharton School. He earned an M.Phil. and Ph.D. in organizational behavior from Yale University, as well as an MA in organizational psychology from Columbia University. He received a BA, with distinction, from Yale, where he was a Victor Wilson Scholar. Thomas consults and lectures widely on topics ranging from career and leadership development to major systems change and organizational design.