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05/08/92

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Raisa Gorbachev scholar studies corporate finance

STANFORD -- When she taught her first course in corporate finance last year, Tatiana Krylova of Moscow State University had 150 students and four copies of one textbook, Fundamentals of Financial Management, by Stanford University Prof. James VanHorne.

"I could only teach basic definitions, but that was important because none of my students had heard of such concepts as the time value of money, opportunity cost, risk and return and compound interest," said the visiting scholar at Stanford's Institute for International Studies.

When Krylova returns to Moscow in July after a year at Stanford, she will have dozens of textbooks and course syllabi, and a wealth of experience with capitalism in her head. She has audited classes in business and economics, conducted research on corporate finance in Russia, worked with other Stanford researchers on a Russian aircraft company's conversion to employee ownership, and studied banking by consulting with Bank of America specialists.

Krylova is the first recipient of the Raisa Gorbachev Partnership in Learning fellowship at Stanford. Funded by the San Francisco-based Friends of Raisa Foundation in honor of the wife of Mikhail Gorbachev, the program was designed to promote communication and understanding of economic issues between the United States and the former Soviet Union. Krylova is the first of three scholars who will come to the Stanford campus for a year to do market-related research and coursework.

In September, she and two Stanford professors, Mark Lang of the Graduate School of Business and John Litwack of the economics department, will conduct a seminar in Moscow on corporate accounting and finance for Russian professors and business managers.

"We felt the Soviet Union needed people who had firsthand experience with market economies, and so [in 1990] we suggested to Raisa Gorbachev that she name a committee that could select mature people as candidates," said Ingrid Hills, who organized the Friends of Raisa Foundation with fellow San Francisco residents Dodie Rosekrans and Barbara Rosenberg.

"We wanted people who were not beginners to make sure they had enough weight in the Soviet Union to introduce change when they went home."

The selection committee was also to give preference to women candidates in order to encourage high-level participation by women in business, academia and government. Stanford faculty interview finalists and make the final selection.

Krylova taught accounting courses that were relatively unpopular at Moscow State until three years ago, she said.

"The students didn't consider these courses necessary," Krylova said.

That's because most of the more than 3 million accountants in the former Soviet Union functioned primarily as bookkeepers or registrars of information. They were not permitted to make management decisions, and managers of Soviet enterprises weren't concerned with finance, only with production, she said.

"In your country, you have different methods of accounting, and accountants get to choose what they think is the best method. There was no creativity in accounting in the USSR."

The Gorbachev reform era ushered in a new chart-of-accounts law, Krylova said, but very often it didn't get implemented. Bookkeepers tended to be "afraid they would be punished for breaking some laws they don't know about."

Student interest in accounting picked up three years ago, and now there are waiting lists for courses, she said.

"Many of the students are working and proud," Krylova said. "It's a well-paid profession now."

Krylova will help create a new two-year master's program in business administration at Moscow State, and thus has been especially interested in observing how that material is taught here.

"What I like about Stanford's MBA program is that they have a lot of guest speakers," she said. "Practitioners in private companies are often invited in when we are discussing a case study. It's great to connect the operational practices with the theoretical perspectives."

Krylova said she underestimated how much her country had to learn about private finance, but she is optimistic that it can be learned quickly, partly because the School of Economics at Moscow State has managed to get at least several months' exposure abroad for eight faculty this year and for 10 more next year.

"The training of trainers is the most efficient way to go about it," Krylova said. "I'm very grateful to the Friends of Raisa Foundation. It's not that usual for us to get help on this great a scale."

Krylova will be an enormous asset to her country because "very few people have her bilingual skill and an understanding of accounting in both Russia and the United States," said Dave Bernstein, who worked with her at the Stanford Center for International Security and Arms Control. "She did a magnificent job of getting across concepts" to both the Russian managers and center scholars who worked together on plans for converting the Saratov Aviation plant to civilian production and employee ownership, he said. The Stanford center is assisting as part of a larger study and hopes to develop models for converting other defense plants to civilian production.

Krylova is residing in Escondido Village with her two children and her husband, who is on leave from his position of laboratory director for the Mining Institute of the Russian Academy of Sciences.

She will meet Raisa Gorbachev for the first time when the Gorbachevs visit Stanford Saturday, May 9.

"We were supposed to meet last August in Moscow," Krylova said, "but then there was the coup."

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