Global Failures Create a “Lodestar” for HBS Research and Teaching

Photo by Beth A. Keiser/Associated Press

From new cases to new courses and research projects, the HBS faculty’s response to the global financial crisis has been “quite extraordinary,” says Professor Joe Badaracco, chair of the MBA Program. Many faculty members have adapted assignments and class discussions to incorporate the crisis, and they are encouraged to continue, says Badaracco.

Several new cases already are in use, including “New Century Financial Corporation,” focusing on a subprime mortgage highflier that goes belly-up; “Subprime Meltdown: American Housing and Global Financial Turmoil,” dealing with the U.S. system of financing homes; “Executive Pay and the Credit Crisis of 2008,” examining the impact of the financial crisis on executive pay; and “The Future of Financial Reporting,” a video case on mark-to-market accounting rules.

In April, Senior Lecturer Clayton Rose and Assistant Professor Daniel Bergstresser’s new case on JPMorgan Chase’s acquisition of Bear Stearns will be taught to all first-year students in two different courses and from two different perspectives. “In Finance, we’ll focus on Bear’s capital and liquidity issues,” explains Rose, who worked at Morgan for twenty years. “In Leader-ship and Corporate Accountability, the focus will be on the government’s decision to ask JPMorgan to purchase Bear, and the potentially conflicting responsibilities of management.”

New electives offered this spring include Creating the Modern Financial System, Professor David Moss’s course on the history of financial panics. It draws parallels to the current crisis. Consumer Finance, jointly taught by HBS professor Peter Tufano and HLS professor Howell Jackson, examines the laws and regulations governing financial services. Rose also has a new elective in the works for next fall, Managing the Financial Firm, which will explore the challenges of managing financial institutions during periods of unprecedented disruption.

To facilitate sharing of faculty knowledge and ideas, and to foster new research across disciplinary and course boundaries, a six-member faculty working group, established in November, invited the entire faculty to a half-day discussion of the crisis. Afterward, the group launched a Friday series of in-depth presentations on topics related to global economic issues. “Unlike traditional seminars that are open only to specific interest groups, these are open to everyone on the faculty,” explains Tufano, who cochairs the working group with HBS professor Paul Healy.

Alumni, too, are eager for HBS insights into what’s happened and how to fix it. A new, three-day Executive Education program called The Global Economic Crisis: Diagnosis, Analysis, and Action quickly reached capacity of eighty alumni, says Bobbi Carrey, director of focused programs. Half of the participants for the March program reside abroad, she adds.

“The economic crisis that unfolded over the last year was as unprecedented for most of us as it was unforeseen,” says Professor Carl Kester, deputy dean for Academic Affairs. “It will be a lodestar for business school research and teaching for years to come.”

For the latest faculty views on the global economic crisis, visit www.hbs.edu/economic-crisis/.

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