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Stanford Report, May 24, 2000

Almost 3,000 celebrate Business School's 75th anniversary

Nearly 3,000 people joined a three-day celebration of the 75th anniversary of the founding of the Business School May 18-20. The event included seminars saluting the work of such faculty as Accounting Hall of Fame member Charles Horngren, game theory pioneer Robert Wilson, Nobel laureates in economics William F. Sharpe and Myron Scholes, and the four living deans who brought the school to international prominence in the second half of the 20th century.

The event was capped Saturday evening with an elegant gala dinner and dance held in a 20,000-square-foot tent erected for the event and attended by 1,700 faculty, alumni and staff. The weekend's events traced the school's path from the early 1920s, when Herbert Hoover led a campaign by a group of West Coast business leaders to found a business school at Stanford to prevent the exodus of future business leaders who went East to earn business degrees. The school's rise from a strong regional institution to international prominence began in the 1950s under the leadership of Ernie Arbuckle, who served as dean from 1958 to 1968.

During another panel discussion, the school's four living deans -- Arjay Miller (1969-79), Robert Jaedicke (1983-90), Michael Spence (1990-99) and current dean Robert Joss -- recalled changes such as the creation of the Public Management Program, the rise in the use of computing and the emergence of the Internet as a teaching tool.

One Friday morning session traced how Stanford's accounting research has turned the field into a vital managerial tool, and honored Horngren, widely considered to be the man who created the field of managerial accounting.

Horngren, the Edmund W. Littlefield Professor of Accounting, Emeritus, pioneered the use of accounting data for managerial decision making in the early 1960s. "Chuck's footprints and fingerprints can be seen over every aspect of the important changes that have gone on both at [Stanford Business School] and in accounting," said Joel Demski, a Business School faculty member from 1968 to 1984.

Demski, now a professor at the University of Florida, said that under Horngren's tutelage Stanford faculty and graduate students were encouraged to keep expanding the way accounting was perceived, used and taught. "The clear pattern we learned from Chuck," he said, "was to be unrelenting champions of innovation, change, risk-taking and the pushing forward of the staunch foe called 'the status quo.'"

Colleagues also recognized Demski for his outstanding work in the field. Gerald Feltham, also a former Stanford faculty member who is now a professor of accounting at the University of British Columbia, described how he and Demski collaborated to create evaluation models based on accounting data designed to help managers make informed decisions. "Joel recognized that there was a distinction between the economic implications of failure to implement a plan and failure to predict correctly, for example. He worked on integrating the management science perspective with the traditional accounting process," said Feltham.

In another panel discussion, faculty and alumni explored the role of research in a business school setting, roundly endorsing the school's commitment to pursuing knowledge for knowledge's sake, rather than confining faculty research to the immediate needs of the market. Only with an environment of academic freedom can Stanford attract top-notch professors, who in turn draw the best students and help establish it as an outstanding business school, they said.

"Students who come here want to be taught by the best faculty in the world. Who are these faculty? They are people who are totally committed to learning and to thought," said panelist Herbert Allison, MBA '71, who retired last year as president of Merrill Lynch. They would not be attracted to work at Stanford unless the school was committed to scholarly research, he added.

Garth Saloner, the Robert A. Magowan Professor of Strategic Management and Economics at the Business School, estimated research takes up between one-fifth and one-third of his colleagues' time, since all of them also teach. With a faculty of 70 to 80, that works out to about 20 person-years devoted annually to research, less than the resources that investment banks, consulting firms and other large corporations devote to research into management issues. But despite its relatively small volume of research, the school's faculty has made a remarkably big impact, developing various key theories and authoring major texts, he added.

James G. March, the Jack Steele Parker Professor of International Management, Emeritus, argued that while industry research seeks immediate payoff, scholars have the unique responsibility of looking out for the long term. "Scholarship is not a job but a calling, to follow ideas wherever they go," he added. SR