Haas NewsWire

Haas NewsWire, September 26, 2000

Dean Tyson Responds to Business Week Ranking of Haas School
Gertler Finds Mexico's Anti-Poverty Program Improves the Health of Poor Families
Students Share the Wealth Through Students for Students
New Staff
Haas in the News
Happening at Haas

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By Laura Tyson

The Haas School of Business is one of the world's outstanding business schools. The best indicator of its quality is market competition. The very top business schools compete vigorously with Haas for students and faculty. And Haas MBAs are regularly courted and hired by many of the world's most selective firms. The recent rankings of business schools published by Business Week do not reflect these market assessments of the quality of the Haas School. In contrast to a rank of 18 in the Business Week results, Haas earned a rank of 10 in US News, a rank of 9 among US schools in the Financial Times, and a rank of 4 in Forbes during the last year. The discrepancy in these results suggests that there are special features of the Business Week methodology that make it a misleading measure of quality. Nonetheless, there are lessons to be learned and information to be gleaned by analyzing the Business Week results.

Let's start with a few bright spots. The Haas School ranked #14 in student satisfaction, which accounts for about 45% of the total score. This is a reasonable showing, one that has improved over time, and one that I am committed to improve still further in the future. This year's ranking in student satisfaction is based on opinions from the Class of 2000, which accounted for 50% of the responses, as well as opinions from the classes of 1998 and 1999, each of which accounted for 25% of the responses. The two earlier classes did not benefit from the many enhancements in school services that have been realized during the last two years. With the School's dedication to continuous improvement, we hope and anticipate that satisfaction levels among current and future students will continue to trend upward.

I am enormously pleased that the Career Services office and its outstanding professional team have revitalized this mission-critical service at the Haas School. In its last survey only two years ago, Business Week ranked the Haas career services office at the bottom of its top 40 list. Only two years later, Business Week applauded the efforts of the Career Services staff. Praise for their efforts is richly deserved.

Probably the most troubling aspect of the Business Week survey was the ranking by corporate recruiters. According to this indicator, which accounts for 45% of the total score, the Haas School fell from #16 two years ago to #22 this year. Despite the School's disappointing ranking on this measure, however, the performance of Haas students on the job market-as measured by both the number of job offers per student and the median post-MBA salary per student-was as good or better than most of the other business schools that were ranked higher on the recruiter survey. There are two partial explanations for this puzzling discrepancy.

First, the Business Week methodology appears to suffer from a persistent East Coast bias in its survey of recruiters. No school west of the Mississippi made it into Business Week's top ten this year, and West coast schools have always done less well than Eastern and Midwestern Schools in Business Week rankings. To some extent this bias reflects the fact that many of the "old-economy" corporate recruiters surveyed by Business Week interview and hire many more students from Eastern and Midwestern Schools than from Western Schools. Such firms know that the odds of their attracting Haas graduates are low given the School's small size and the preference of many Haas students to remain in the Bay Area and to work for "New Economy" firms too small and/or too new to be included in Business Week's survey of corporate recruiters.

Second, according to a recent statistical analysis by MBA Program Director David Downs, smaller business schools have historically done less well on Business Week rankings than larger ones. This year, as in past years, most of the very top schools are at least twice as large as Haas as measured by the size of their MBA class. Darden won the best showing for small schools this year, earning a rank of 9 while Tuck, the smallest business school, fell to #16. Size and rank may be related in the Business Week methodology simply because large corporate recruiters are less likely to be well informed about the quality of programs at smaller schools and more likely to come away empty-handed if they try to recruit at such schools.

Another troubling and perplexing conclusion of the Business Week methodology was the poor performance of the Haas School on a new indicator called "intellectual capital." This indicator, which accounts for 10% of the total score, purports to assess the quality and influence of faculty research. Haas ranked 38th out of 40 on this measure-a result that starkly contrasts with the #1 ranking Haas earned for the quality of its faculty research from the Financial Times in January of this year. We are concerned about the methodology adopted by Business Week. For example, the magazine states that its survey measured intellectual capital based on both the number of faculty publications in selected journals and the length of such articles. The latter measure is surely a peculiar indicator of research excellence. We hope to work with Business Week to learn more about its methodology in this area and to suggest ways it could be improved to provide more meaningful results.

As I stated at the outset, there are things to be learned from the Business Week rankings. For example, students expressed some reservations about the quality of the curriculum. I take these reservations very seriously and plan to initiate a full-scale discussion among faculty and students to determine what changes should be made in the curriculum. Over the coming year, I look forward to your comments, observations, and suggestions about how Haas can continue to improve in this and other areas. At the same time, I want to emphasize my belief that the Business Week rankings fail to reflect the world-class attributes of the Haas School, attributes that make it a very special place to get a business education.

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The Mexican anti-poverty program PROGRESA has succeeded in reducing childhood illness by 12 percent and has significantly increased the health of babies and pregnant mothers among program participants, according to a recent study by Paul Gertler, professor at Haas and faculty director of the Graduate Program in Health Management.

"One of the greatest tragedies of extreme poverty is its intergenerational transmission," says Gertler. "Few children of extremely poor parents are able to escape poverty."

Gertler evaluated the impact of PROGRESA on the health of young children and adults and on the economic productivity of the households participating in the program. Gertler was one of six researchers from Mexico and the US evaluating the success of different aspects (health, nutrition, education, etc.) of PROGRESA.

PROGRESA was adopted in 1997 to promote education, improve health care and health maintenance, and better nutrition among Mexico's rural families living in extreme poverty. The program provides education grants, nutritional supplements, education on hygiene and nutrition, and cash transfers for food directly to mothers in participating villages. This unique approach has been found to increase the chances that the benefits will be used for the purposes for which they were designed.

PROGRESA emphasizes helping children under six, pregnant women, and lactating women. By the end of 1999, the program had reached approximately 2.3 million families in almost 50,000 localities in 31 states. Its budget was $777 million or 0.2% of the Mexican GDP.

In his evaluation of PROGRESA's health care effects, Gertler found that participating villages showed a quicker increase in visits to the available health clinics than in non-participating villages. The study also found that PROGRESA resulted in 8% more pregnant women visiting health clinics during their first, instead of their second or third trimesters, thus increasing their own health and that of their babies.

As PROGRESA participants increasingly took advantage of the available health care --such as visits to monitor nutrition, prenatal care, and immunization -- the number of severe illnesses declined, reducing the number of hospitalizations by 23%.

Due to the success of the program, the PROGRESA model is already being adopted by other poverty-stricken countries, such as Argentina, Columbia, Honduras, and Nicaragua.

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Last year, as part of an effort to support their fellow MBA students in pursuing less financially rewarding summer jobs at nonprofit and public organizations, students from the MBA class of 01 promised a day of their summer salaries to the Students for Students fund. The pledges to the fund for summer 2000 totaled almost $28,000.

Sanjay Wagle, MBA 01, and Whitney Hischier, MBA 01, were two of the four students who took advantage of the program. They both worked at The Endeavor Initiative (www.endeavor.org), a nonprofit based in New York that promotes entrepreneurial role models in developing countries.

Sanjay was in The Endeavor Initiative's eMBA program that sends MBA students from top US schools to work with Endeavor entrepreneurs in Argentina and Chile. He worked in Santiago, Chile, for a company called Micsa.

Whitney, who managed Endeavor's educational programs in the New York office, said "I had a fantastic summer and was thrilled to be part of such a passionate and dynamic group of people who are impacting job creation and community role models in Latin America."

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Kristina Vera joined Haas Computing Services as a programmer analyst and HCS lab coordinator in July. She manages lab operations; provides software and hardware support and troubleshooting for HCS Lab customers; and trains and supervises student consultants. She graduated from UC Berkeley with a BA in American Studies. In her spare time, she is a DJ at the official radio station for UC Berkeley, KALX 90.7 FM.

Kristina can be reached at 2-5357 or via e-mail at kvera@haas.berkeley.edu. Her office is located in S300B.

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Jennifer Chatman, associate professor and chair of the Organizational Behavior and Industrial Relations Group and the Harold Furst Professor of Management Philosophy and Values, was quoted in the October issue of Working Mother magazine in an article on the unequal access to benefits in some organizations.

Russell Winer, the J. Gary Shansby Professor of Marketing Strategy and the chair of the Marketing Group, was quoted in the South China Morning Post on September 24 in "Schools Take a Global View of Asian Executives' Growing Demand for Knowledge." Winer commented on the Haas School's research into the feasibility of starting a program in Asia.

The Daily Cal covered the Cal Performances season-opening celebration on September 22. The celebration was also in honor of Earl F. Cheit, dean emeritus of the Haas School.

The San Francisco Chronicle also covered the Cal Performances season opener, mentioning that the evening was also to honor dean emeritus Cheit.

Severin Borenstein, the E.T. Grether Professor of Public Policy and Business Administration and the director of the University of California Energy Institute, did live interviews with KCBS and KGO radio stations September 22 on the effect of Clinton's decision to release 30m barrels from the Strategic Petroleum Reserve. Borenstein said that it would probably have a modest effect on world oil prices. He also said that lowering world oil prices is an indirect way to help poor people in the northeast better afford heating oil this winter.

The Leading Edge Conference was listed in Upside Today on September 22 as "Today's Special."

Dean Laura Tyson was quoted in The New York Times on September 22 in "Plan to Tap Oil Reserve Strikes Some Experts as Temporary Answer." Tyson commented that it was a short-term fix targeted at home heating oil, and not an attempt to change market dynamics.

Richard Lyons, professor in the Economic Analysis and Policy Group and the Finance Group, and Richard Portes, Distinguished Global Visiting Professor, authored a letter to the Financial Times advocating a change in the monetary policy of the European System of Central Banks.

Winer was also quoted in "All the World's a Campus," in The New York Times on September 20, on the Haas School's research into the feasibility establishing an Asian MBA program.

Borenstin gave a live interview on KGO radio on September 20 about the causes of the high gasoline prices.

Borenstein was also quoted on September 20 in the San Francisco Chronicle, the Oakland Tribune, Sacramento Bee, and AP Newswire on the cause of California's high gasoline prices. Borenstein explained that these prices are likely to persist for a while and that state authorities should be looking into how to increase competition in the California refining market.

Brett Trueman, the Donald and Ruth Seiler Professor of Public Accounting, chair of the Haas Accounting Group, and director of the Center for Financial Reporting and Management, was quoted in the Industry Standard on September 20 in an article titled, "SEC Tells Teen Trader to Pay Up." Trueman commented that this sort of fraud would not be possible if it weren't for na´ve traders who take online stock advice without doing their own research.

AScribe founders David Irons, former director of public affairs at the Haas School and Ron Wolf, MBA 96, were featured on the front page of the Chronicle's business section on September 20. The article "Spreading the Word," was about news wire services in general, but highlighted the nonprofit niche that AScribe serves. The full text of the article can be found at http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2000/09/20/BU40578.DTL&type=business

The Haas School's daylong conference on housing and urban policy was covered by the San Francisco Examiner on September 19. "Panel Addresses Critical Housing Shortage" quoted several of the speakers at the event.

On September 19, Borenstein was quoted in a piece on the NPR show "Marketplace" commenting that uncertainty about the form that electricity restructuring in California would take slowed the building of new generation facilities during the 1990s.

Pete Sealey, adjunct professor in the Marketing Group and co-director of the Center for Marketing and Technology, was quoted in the Star-Tribune (Minneapolis/St. Paul) on the Xbox, Microsoft's new game platform.

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