SIMONBUSINESS WILLIAM E. SIMON GRADUATE SCHOOL OF BUSINESS ADMINISTRATION | WINTER 2001

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Charles Plosser’s James S. Gleasonfor Hall2002. Open for BusinessEconomic Forecast The above plaque hangs in the entrance to James S. Gleason Hall, which was dedicated on November 19, 2001. For more, see article on page 14.

James S. Gleason once said that accelerating new product develop- of business and civic organizations, integrity and honesty were the most ment, improving operational effective- and in many other worthwhile causes. important attributes managers could ness and pursuing growth through He also serves as president and direc- possess. Throughout his almost four acquisition. tor of The Gleason Foundation, which decades with Gleason Corporation and Today, as chairman and president, offers financial support to organiza- a lifetime of personal and professional Mr. Gleason oversees a revitalized tions in such areas as arts, humani- accomplishments, he has remained companythatenjoysan apexofdis- ties, research, health and social sci- true to this belief. It is no surprise, tinction, and controls the major share ences. Recipients have included the therefore, that he is a singularly of two worldwide markets approaching American Red Cross, The Consortium respected leader in the global corpo- $1 billion in value. For Graduate Study in Management, rate, public and academic communi- Mr. Gleason is a member of the Convalescent Hospital for Children, ties. Simon School’s first Executive Regional Council on the Aging, Drug When Mr. Gleason became CEO of Development Program graduating and Alcohol Council, Rochester Gleason Corporation in 1981, the firm class. He has consistently demon- Philharmonic Orchestra, the University was under enormous pressure from strated his commitment to education of Rochester and the Simon School. shareholders because of poor perfor- by giving generously of his time and In 1995, the Foundation announced mance. With remarkable courage and resources to the Simon School and the the Gleason Global Initiative, a $1 mil- vision, Mr. Gleason formulated a strat- University of Rochester. He currently lion grant to help the Simon School egy to enhance shareholder value by serves as a University Life Trustee and promote the understanding of a global refocusing on his company’s core busi- as a member of the Simon School’s marketplace and economy. The ness. Four major themes served as Executive Advisory Committee. He is Foundation’s latest leadership gift of the guiding principles for the strate- also a Trustee of the Rochester $4,000,000 allowed the Simon School gies and actions which he initiated: Institute of Technology. to break ground in spring 2000 for expanding global market presence, Mr. Gleason is active in a number James S. Gleason Hall. Winter 2001 08 10

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03 Message From the Dean feature 04 Economic Recovery? Sooner Than You Think Dean Charles Plosser’s economic forecast for 2002 14 Feature 08 Simon Ranks Among the World’s Best Major publications vote “yes” on Simon during 2001 .

Feature 09 Accounting After Enron business Simon professor and accounting expert Jerold L. Zimmerman on the Enron crisis.

Faculty Research 10 The Block Pricing Puzzle Salesforce Design With Experienced-Based Learning The Joint Determination of Leverage and Maturity The Marketing Role of IPO’s: Evidence From Internet Stocks

cover story 14 Open for Business The dedication of James S. Gleason Hall will enhance the Simon environment for students and corporate partners.

in memoriam 22 Jeffrey R. Smith ’88 Zhe “Zack” Zeng ’98 Alfred H. Heineken

alumni news 24 Alumni in Asia Welcome Simon Contingent Alumni Profile: Nobuaki Otsuki ’96 Farash Luncheon Program Connects Students and Alumni BUSINESS 2001 Winter Mergers and Acquisitions

Class Notes SIMON

01 DEAN: Charles I. Plosser SENIOR ASSOCIATE DEAN FOR CORPORATE RELATIONS AND INSTITUTIONAL ADVANCEMENT: Charles W. Miersch SENIOR ASSOCIATE DEAN FOR FACULTY AND RESEARCH: Ronald W. Hansen ASSOCIATE DEAN FOR EXECUTIVE PROGRAMS: Richard M. Popovic ASSOCIATE DEAN FOR M.B.A. PROGRAMS: Stacey R. Kole CHAIRMAN, PH.D. PROGRAM: Ross L. Watts ASSISTANT DEAN FOR CAREER MANAGEMENT: Lisa M. McGurn ASSISTANT DEAN FOR INFORMATION TECHNOLOGIES: Kevin Brennan ASSISTANT DEAN FOR M.B.A. ADMISSIONS AND ADMINISTRATION: Pamela A. Black-Colton EXECUTIVE DIRECTOR OF ALUMNI RELATIONS AND DEVELOPMENT: Hollis S. Budd DIRECTOR OF ALUMNI RELATIONS: James Moore DIRECTOR OF MAJOR GIFTS: M. Eve Elzenga DIRECTOR OF MARKETING: Dawn S. McWilliams DIRECTOR OF OPERATIONS AND FINANCE: Martha Every DIRECTOR OF PUBLIC AFFAIRS: George M. Tomczyk DIRECTOR OF STUDENT SERVICES: Donna Lampen-Smith

EDITOR: Charla Stevens Kucko CONTRIBUTING WRITER: SIMONBUSINESS, Vol. 16, No. 1 © 2002. Sally Parker Published semiannually by the University of Rochester, William E. Simon Graduate School of Business Administration, Carol G. ART DIRECTOR/DESIGNER: Simon Hall, Box 270100, Rochester, New York 14627-0100. Michael T. Johnson Postmaster: Send address changes to the William E. Simon Graduate PRODUCTION MANAGER: School of Business Administration, Carol G. Simon Hall, Box John M. Robortella 270100, University of Rochester, Rochester, New York 14627-0100. BUSINESS 2001 Winter PHOTOGRAPHY: © 2002 William E. Simon Graduate School of Business Annette Dragon, G. Steve Jordan, John Myers, Administration, University of Rochester SIMON Jan Regan, John Smillie, Shannon Taggart 02 WILLIAM E. SIMON GRADUATE SCHOOL OF BUSINESS ADMINISTRATION

Message From the Dean

eaders who are familiar with Simon Business will notice some differences in the Winter 2001 issue. R First of all, we have added an Alumni News section, with information for and about Simon alumni throughout the world. This information, which has previously been shared with our alumni in a separate quarterly publication, will now reach them twice a year in this magazine. They will also continue to hear from us in an annual alumni newsletter, and in the dean’s annual report. While we decided to make this change for reasons including cost efficiencies and timeli- ness of news, we also think that our corporate partners, prospective students and members of the media will be interested in knowing how Simon graduates are faring in their personal and professional lives. We’ve devoted a large part of this issue to the much-anticipated dedication ceremonies for James S. Gleason Hall, a magnificent new building which increases usable space for the Simon School by 38,000 square feet. Gleason Hall will provide greatly enhanced accommoda- tions for our students and recruiters, and free up space to enlarge facilities for our Admissions and Alumni Relations areas, as well as the Simon School’s Executive Development Program. Additional space for corporate partnerships, club meetings and team-related activities will enable our students to pursue expanded leadership opportunities. And finally, we offer this issue—albeit sadly—as a memorial to two Simon alumni who were lost in the September 11 terrorist attack in New York City. Jeffrey R. Smith ’88 and Zhe “Zack” Zeng ’98, both of whom graduated from the University of Rochester and the Simon School, represented the finest qualities of a Simon M.B.A. Friends and colleagues remember both men for their deep loyalty and concern for others. We dedicate this issue of Simon Business to Jeff and Zack, and extend our deepest sympathies to their families.

Charles I. Plosser Dean and John M. Olin Distinguished Professor of Economics and Public Policy BUSINESS 2001 Winter SIMON

03 04 SIMONBUSINESS Winter 2001 WILLIAM E. SIMON GRADUATE SCHOOL OF BUSINESS ADMINISTRATION

Feature economic outlook SOONER THAN YOU THINK. he economy might not be doing very well right now, and indeed it may worsen slightly, but key econom- T ic indicators show it is poised to turn around more quickly than most people predict, says Charles I. Plosser, dean of the Simon School. Plosser, an internationally renowned economist, delivered his prediction on December 11, 2001, during the 23rd annual Economic Outlook Seminar, sponsored by the Simon School, Greater Rochester Metro Chamber of Commerce and JPMorganChase. “The economy is poised for a recovery. Most of the pieces are in place to warrant such a prediction. If things go according to plan, we should see a return to positive growth in the first quarter of 2002,” he said. “Real GDP growth will start out at a very modest pace in the first quarter and gradually strengthen during the year. By the second half of 2002, real growth should be close to 4 percent.” Plosser told an audience of more than 400 that an understanding of future recovery requires reflection on the past. The economic slowdown began when business investment spending fell after the first quarter of 2000. Then came the September terrorist attacks, which turned a slowdown and possible recession into reality. Like any disaster, the attacks destroyed human and physical capital; estimates of cleanup costs and the loss of life and property are $30–60 billion. But as horribly sad as the tragedy is, Plosser said, it represents a relatively minor shock to the $10 trillion U.S. economy. Unlike a natural disaster, however, the attacks introduced greater uncertainty regarding national security. The result: a sharp and significant retrenchment in consumer spending, transforming the slowdown into a recession, according to Plosser. If things go according to plan, we should“ see a return to positive growth in the first quarter of 2002.

“How quickly economic growth returns depends in large part on how quickly and strongly consumer spend- ing bounces back,” he said. For clues as to how the economy will respond in the current climate, Plosser looked back to other shocks on U.S. consumer spending. Consumers closed their pockets for a while during the 1970’s Arab oil embargo and, to a lesser extent,” follow- ing the 1990 Iraqi invasion of Kuwait. In each case, Plosser noted, “the economy rebounded, and long-term BUSINESS 2001 Winter growth rates that were consistent with underlying increases in productivity were restored.”

The current climate carries the added weight of uncertainty related to war and possible future attacks. But key SIMON

05 WILLIAM E. SIMON GRADUATE SCHOOL OF BUSINESS ADMINISTRATION

Feature economic outlook indicators of economic growth are point- Plosser s 2002 Economic Outlook ing to better times ahead: ’

The Federal Reserve has aggressively Unemployment will continue to rise even after economic eased short-term interest rates during the turnaround, peaking at about 6.5 percent. year, which has fueled substantial increases in liquidity. Interest rates are expected to rise above 2001 lows, about 100 The Federal Reserve has lowered its basis points at year’s end. Federal funds target 10 times so far in 2001 (as of Dec. 11), and the funds rate Real GDP growth will make modest gains in the first quarter, grad- is now at its lowest level in nearly 40 ually growing close to 4 percent by the second half of 2002. years. Plosser said he is concerned that Inflation will likely remain in the 2.5 percent range for the year, monetary policy is “excessively easy,” as perhaps drifting higher in the third and fourth quarters. the most recent cuts will not have a sig- nificant impact on the economy until the second half of 2002, “when in all likeli- hood the economy will have recovered, Consumer spending has rebounded. The unemployment rate is a lagging indicator of economic conditions, so it and we will be facing a substantial risk of Consumer spending contracted increased inflation.” will continue to rise even after the econo- sharply in September, a direct result of my has turned around. The movement in interest rates in the terrorist attacks. But in October, 2002 is highly uncertain, he said. “As spending grew at a pace not seen since The jobless rate from the fourth quar- economic growth picks up, we might 1986. Some of this was fueled by low ter of 1999 to the same period in 2000 expect to see rates rise above their lows of financing rates on new cars, but most was 4.4 percent. The forecast for this year.” Plosser predicted an increase other subcategories of spending also 2000–2001 is 4.5 percent, and Plosser of about 100 basis points in short-term showed positive growth, he said. predicted it won’t exceed 6.5 percent in rates by the end of the year. 2001–2002. Recessions, he said, are The measured indices will probably New construction grew in October after often associated with much more dramat- remain in the 2.5 percent range for the five months of decline. ic increases in unemployment: The job- year, with some drifting higher during less rate peaked at 7.8 percent in June the third and fourth quarters, Plosser pre- Construction starts were up almost 2 1992 and at 10.8 percent during the dicted. He cautioned, however, that his percent in October after a drop of 1981–82 recession. forecast of modest rate increases may approximately 1 percent in prove to be an underestimate. One rea- September. “Even after five son is that the median inflation rate con- months of decline, construction tinues to drift upward, and if inflation for the first 10 months of 2001 picks up at all, long-term bond rates may ran 6 percent ahead of the first 10 rise significantly. months of 2000,” Plosser said.

Inventories have shrunk substantially New orders for durable manufac- this year, helping to work off some of the tured goods rebounded signifi- accumulated excesses. cantly in October. The reduction in inventories during One of the few positive signs the last two quarters of 2002 came at a for manufacturing in quite a while pace not seen since the 1982 recession. appeared in October, when new This is good news, Plosser noted, orders for durable manufactured “because as consumer demand begins to goods grew by 12.8 percent. This rise, firms will need to ramp up produc- followed a decline in six of the last tion more quickly instead of meeting the nine months. Plosser attributed increased demand with accumulated some of the increase to new hard- BUSINESS 2001 Winter inventory.” ware orders in the defense indus- try—evidence of the stimulative

SIMON effects of war. Charles Plosser urged “level-headed optimism” in his economic 06 forecast for 2002. passing through Congress, he said. he Congress, through passing trouble no have should economy”and the on effect positive a have to tinue con- will terrorism combat to spending defense in occur.“Naturalincreases will stimulus fiscal evolves, terrorism on war the as and effect, take legislated been already have that rates tax marginal lower When said. Plosser pipeline,” the in already stimulus of plenty motives. political by tainted icy pol- economic bad masks often effort war a or package stimulus a that warned He volatile.” less than rather volatile more economy the make to more does and late too arrives generally It fashion. timely a in work not does Fiscalpolicy near-term. the in difference much that make will Congress. in discussion under package stimulus the or policy fiscal of impact the absent inflation.” in run-up huge a triggering without percent 5.5–6 below couldn’tunemployment that argued go people many when 1996 as recently as “And was out. it pointed Plosser years,” 30 last the of 15 in percent 6 above been

About the Dean proposals spending some said Plosser is there that is matter the of fact “The don’tI simple. it is reasonthink “The predictions his made he said Plosser has unemployment average fact, “In abig,Msahsts H seio fthe editor of Cambridge, Massachusetts. Heis Research in Economic Bureau of the National beenaresearch also associate of policy. Hehas nomic onU.S.eco- comment whoregularly known economists internationally Committee—a groupof Open Market the Shadow co-chair of cited surveys. Plosser is quently andfre- consulting services prominent of the accuracy andhmlsig ntems eeteiin of editions recent inthemost earned himlistings andleadership have accomplishments andorganizations. Plosser’s companies to numerous consultant ILA .SMNGAUT COLO UIESADMINISTRATION BUSINESS OF SCHOOL WILLIAM E. SIMON GRADUATE Monetary Economics Economics Monetary S oaaei n uiesadecswrdie Frteps 2yas i oeat have rivaled forecasts 22 years, his worldwide. For thepast audiences andbusiness to academic lectured distinction whohas international of aneconomist I.Plosser is Dean Charles imon School and the Carnegie-Rochester Conference Series on Public Policy Public on Series Conference Carnegie-Rochester recessions in U.S. history.”U.S. in recessions mildest the of one as history in down go better,will gets this it before worse little a get “Andmay it noted. while he shocks,” tremendous some absorbed has and well remarkably doing still is economy past. the from learned lessons and cators indi- economic current of light in mism conceded. he heap,” trash the to right predictions these send could Congress of halls hallowed the from emanating policy economic bad some or terrorism, on war the in events unforeseen attacks, ahead. year the of tainties uncer- fiscal major the given especially avoided, be should and rationale nomic eco- sound no have companies, insurance and airlines for bailouts as such attacks, terrorist the to related proposals ing interest.” best long-term our in thus are and in live we world the in change a from stem “They NewYork for relief disaster City, said. he some and security domestic for spending additional benefits, unemployment of extension the consideration: merit “From a historical perspective, the perspective, historical “Froma opti- level-headed urged PlosserStill, terrorist“Asignificant of resumption spend- some that argued Plosser But Journal of Journal Who’s Who in America in Who Who’s SB and Who’s Who in the World the in Who Who’s question during the Economic Outlook Seminar.Outlook Economic the during question Rochester Universityof Trustee,a and Peabodya LLP poses Nixonof firm law the Robert Jr.,at G. Witmer partner and bankers at Bank von Graffenreid in Bern, Switzerland.Graffenreid Bern, von in Bank at bankers and managers money to annually forecast his presents also He community.business Dutch the to forecast annual his sents pre-Netherlands(Amsterdam)he the where in Commerce www.simon.rochester.edu.at viewed be may Plosser’sspeech OutlookI. EconomicCharles of text full The School. SimonRochester, the for N.Y.,of cast home the Newfore-the economic Yorkhis shared and economy State seminar,the discussed at spoke also who JPMorganChase, Rochester,for N.Y.economist Goloven, regionalMarc in annually held is Seminar Outlook Economic The Plosser is an annual guest of the American Chamber of Chamber American the of guest annual an is Plosser n a evda a as served , andhas . 07 SIMONBUSINESS Winter 2001 WILLIAM E. SIMON GRADUATE SCHOOL OF BUSINESS ADMINISTRATION

feature international rankings Simon Ranks Among the World’s Best The Simon School is continuing to gain international acclaim for providing a world-class business education. During 2001, the following publications recognized Simon as being among the very best:

U.S. News and World Report (March Financial Times (October 2001)—Ranks 2001)—Ranks the Simon School No. the Simon School’s Executive M.B.A. 26 among top business schools in the Programs (Rochester, N.Y.; Bern, U.S.; No. 11 in accounting; No. 12, Switzerland; Nyenrode, the Netherlands) finance; No. 15, quantitative analysis; No. 19 among the top 50 executive No. 18, MIS; No. 21, operations. M.B.A. programs in the world.

The Wall Street Journal (April 2001)— Computerworld (October 2001)—Ranks Ranks the Simon School No. 27 the Simon School among the top 25 among the world’s top business “techno-M.B.A. programs” in the U.S. schools; one of the country’s 10 “hid- den gems”—“less heralded schools with great graduates.” Career Services Office (now the Career Management Center) is ranked No. 2 in the nation for its efforts to satisfy corporate recruiters. Forbes Magazine (October 2001)— Ranks the Simon School No. 21 among the nation’s top business schools offering students the best return on their invest- Business Week (October 2001)—A sur- ment in an M.B.A. program. SB vey of the “Best of the Bunch” execu- tive M.B.A. programs at 161 business schools ranks the Simon School’s Executive Development Program No. 3 in finance; No. 7 in teamwork. In it’s biennial survey of full-time M.B.A. programs in October 2000, Business Week ranked the Simon School No. 21 in the U.S., No. 2 in the U.S. for teaching; No. 11 for intellectual capital generated by faculty.

Hispanic Business Magazine (September 2001)—Ranks the Simon School as the No. 6 M.B.A. program in the U.S. for Hispanic students. BUSINESS 2001 Winter SIMON

08 WILLIAM E. SIMON GRADUATE SCHOOL OF BUSINESS ADMINISTRATION Feature Accounting After Enron As events surrounding Enron Corp.’s bankruptcy filing began to unfold, Simon Business spoke with Simon professor and accounting expert Jerold L. Zimmerman on the future of the accounting profession.

he collapse of Enron Corp. has earnings and hide debt. If the latter business with the client. Again, the most T prompted widespread speculation occurred, a few unethical Andersen partners important thing to auditors is their reputa- of corporate misdeeds from all cor- have exposed their Andersen colleagues to an tion. If they don’t have the reputation for ners of business, politics and the media. enormous litigation liability.” rendering an independent opinion on finan- This winter, the company filed a $50 billion An internationally known accounting cial statements, they won’t have that client, bankruptcy, lost $32 billion in market cap, expert, Zimmerman predicts tough times for they won’t have any clients, and then they and drained more than $1 billion from the accounting profession given the ques- (Continued on page 30) employee retirement accounts. tioning it has been under since Enron’s Enron’s accountant, Arthur Andersen collapse. For starters, he says, recruiting Jerold L. Zimmerman LLP, claims that Enron’s managers misled it, will become more difficult. Ronald L. Bittner Professor of Business while others charge Andersen of various “It’s going to take the profession Administration and Professor of Accounting transgressions. Andersen, Enron’s board of time to overcome the adverse publicity directors, and their investment bankers have of current events. Public accounting been accused of, at best, inadequate checks has been trying to attract different kinds immerman’s research and teach- and balances, and at worst, criminal behav- of people, and the Enron affair certainly ing interests involve financial and Z managerial accounting. He and ior. isn’t going to help. Public accounting Professor Ross L. Watts

But it’s far too early to know what really has never been as glamorous as invest- received American Institute of Zimmernam happened, argues Jerold L. Zimmerman, ment banking or consulting.” Certified Public Accountants Profile Ronald L. Bittner Professor of Business Today’s businesses are increasingly Awards in 1979 and 1980 for their joint papers. He was the Administration and a professor of account- international, and their business envi- 1978 winner of the ing at the Simon School. ronment and technology demands have Competitive Manuscript “All of the statements people are making become more complex. To better serve Award, sponsored by the now are very speculative and uninformed. their clients and to attract leading job American Accounting We really don’t know what happened there. candidates, auditors expanded their ser- Association, for his paper, “The Costs and Benefits of Cost Allocation.” His research, And it may be several years before all the vices to meet their clients’ new needs. which has come to be called “positive theo- facts come to light and are fully digested. This necessitated C.P.A. firms hiring ries of accounting,” seeks to understand We don’t know if the Enron debacle was bad people who have broader business skills the costs and benefits of various account- investment decisions, inadequate corporate to provide the wider menu of services ing procedures. He and Watts co-authored a book, Positive Accounting Theory, pub- governance, an accounting failure, or a com- demanded by their clients. lished by Prentice-Hall in 1986. bination of all of the above,” Zimmerman “They’re trying to broaden their Zimmerman’s current research with says. image and their service base and provide James A. Brickley is “Changing Incentives in Despite what lawmakers and the media a wider range of business consulting ser- a Multitask Environment: The Case of are saying, Zimmerman argues that vices,” Zimmerman maintains. “That Teaching at a Top-Tier Business School,” and with A. Scott Keating is “How Taxes Andersen, as Enron’s auditor, has strong has allowed them to attract a profes- Affect Book Lives.” The second edition of incentives to deliver fair and objective opin- sional who is interested in more than Managerial Economics and Organizational ions on the financial positions of their just auditing financial statements.” Architecture by James A. Brickley, Clifford W. clients. Public accounting firms have every- Andersen’s dual duties of consulting Smith Jr. and Jerold Zimmerman was pub- lished by McGraw-Hill/Irwin. In addition, thing to lose if their names become tar- and auditing at Enron have raised ques- the third edition of Zimmerman’s textbook, nished. tions about its objectivity as Enron’s Accounting for Decision Making and “If an auditor gets the reputation of hav- auditor. Accountants generally argue Control, was published by McGraw-Hill. ing sold his or her opinion to a client who is that the dual role is possible, and even Professors Cheryl McWatters (McGill trying to hide something, financially sound desirable. According to Zimmerman, University), Dale Morse (University of Oregon), and Zimmerman have completed clients will not engage that auditor,” the debate is not new; it has circulated the second edition of an undergraduate Zimmerman explains. “If you are a rep- in the accounting profession for 30 accounting text, Management Accounting, utable business person, and the vast majority years. also available from McGraw-Hill. of business people are, you don’t want to “Some opponents argue that Zimmerman is managing editor (with Ross L. Watts) of the Journal of Accounting hire an auditor who is tainted with the per- because auditors also offer consulting and Economics. He was also a distin- ception that their opinion is for sale. services, auditors have impaired their guished faculty member of the American “While Arthur Andersen has an incen- independence. There is no scientific Accounting Association’s Doctoral Consortium, and a visiting professor at tive to maintain its brand name capital, indi- evidence that consulting services impair BUSINESS 2001 Winter vidual Andersen auditors responsible for the auditor independence. Moreover, Chinese University of Hong Kong, Hong Kong University of Science and Technology, Enron audit might have made either honest clients must disclose consulting fees

and Hong Kong University. SIMON mistakes in conducting the audit, or at worst paid to their auditor so investors can colluded with Enron’s managers to pump up assess the extent of the auditor’s other 09 WILLIAM E. SIMON GRADUATE Feature SCHOOL OF faculty research BUSINESS Simon Faculty Research

The Block Pricing Puzzle hy does the same large-percentage block of percent discount. That’s a 30 percent gap in price for Barclay W stock cost so much more if purchased from a the same percentage of stock. private shareholder than it would if bought “The puzzle,” according to Barclay, “is why are directly from the corporation? these two types of transactions so different? The Calling this question “The Block Pricing Puzzle,” answer we came up with is very straightforward. It Michael J. Barclay, Alumni Distinguished Professor of focuses on the differences between buyers and sellers.” Business Administration and professor of finance at The price reflects what will occur after the transac- the Simon School, and colleagues Clifford Holderness tion is complete. Because it offers the investor a say in of Boston College and Dennis Sheehan of how the company is run, a block trade is priced at a Pennsylvania State University set out to unravel the premium. The incentive of control is worth the extra mystery. Their theory is spelled out in a paper of the cost. In a private placement, company managers are same name. looking for an investor who will not be tempted to Using a block trade or a private placement, investors can purchase a large-percentage block of A deeply discounted price stock. In a block trade, the stock comes from a com- pany outsider—an individual or a corporation in a becomes the incentive related line of business—who is looking for a buyer who will pay a premium for control in the company. “ to buy. In a private placement, current managers of the company exercise control of the stock. They are sell- exercise control rights. A deeply discounted price ing a significant number of shares to raise capital, but becomes the incentive to buy. they still want to run the company with little share- Each type of transaction also seems” to dictate a holder control. company’s future performance, the authors found. Between these transaction types, there is a huge Companies that conduct block trades tend to perform

BUSINESS 2001 Winter difference in the cost of a block of stock. Block trades well, accruing benefits to other shareholders. An typically are priced at an 11 percent premium to the active, large blockholder is paying attention to how

SIMON post-announcement exchange price. In a private the company is run and is speaking up about manage- placement, on the other hand, the stock sells at a 19 ment practices. Wall Street loves the shareholder 10 WILLIAM E. SIMON GRADUATE SCHOOL OF BUSINESS ADMINISTRATION

accountability. The probability of a tender offer is But despite such dire predictions, a private place- also relatively high in this situation, and existing ment is an attractive option for investors who want to management is likely to undergo a big shakeup. avoid an activist shareholder profile, such as insurance On the other hand, companies that make private companies and pension funds. And they can still placements perform extremely poorly down the line, obtain good value for their investment even if the Barclay says. Shareholders are passive, leaving the stock price falls precipitously, Barclay says: “The price company in the hands of management. And the fact discount is likely to be deep enough to put the astute that these shareholders own such a large chunk of the investor ahead in the end.” (Research Paper FR 01- company insulates the firm from corporate takeovers, 05) SB entrenching a management that is in pursuit of its own interests.

Salesforce Design With Experience-Based Learning WhatW is the best way to manage and structure a sales- ways to influence the rate at which a product sells. force to increase sales? Among marketing and opera- “When experience is an important determinant of Misra tions experts, this is an age-old question. Sales are a salesperson’s sales ability, it also becomes an impor- pivotal, after all, to the health of a company’s bottom tant factor in determining the optimal allocation of line. salesforce resources,” the authors write. A cross-disciplinary team of Simon School profes- A salesforce that is small or has a limited budget sors thinks they’ve hit on a key factor long over- runs the danger of being stretched too thin, selling looked: on-the-job experience. The team explored many products not necessarily very well. Sales drop the issue in a recent paper, “Salesforce Design With as a result. Pinker Experience-Based Learning.” “Dilution of experience has a significant role, and Little has been written about the role of learning you want to avoid it,” Pinker says. or the acquisition of on-the-job experience in the suc- In such cases, managers could improve sales if cess of a sales team—even though salespeople typical- they understood how to account for learning among ly learn their trade largely by just doing it. the staff. Managers in companies that sell less com- “A manager can look at the data of a salesforce plex products may prefer to make primary and sec-

and make decisions on how to use them, and not ondary assignments that pool resources and then Shumsky take into account learning,” says Edieal J. Pinker, cross-train on all products. assistant professor of computers and information sys- In companies that produce and sell complex prod- tems at Simon. “But if learning is taken into ucts, such as business technology systems or precision account, things could be even better. We are saying machine tools, managers who consider how experi- there are probably some missed opportunities for hav- ence is accrued by the salesforce might find they pre- ing a better salesforce.” fer independent specialized salesforces that do not “People who focus on operations are concerned cross-sell. about staffing”—how quickly they can jump on sales “There are times when you want to build walls leads, for instance, to satisfy performance criteria— inside the salesforce because you want that salesforce says Robert A. Shumsky, associate professor of opera- to build up experience in that particular product,” tions management. And marketing folks, explains Shumsky explains. Sanjog R. Misra, assistant professor of marketing, Earlier studies used static frameworks that fail to pursue improved sales by focusing on product pricing allow for the fact that a salesperson learns to sell over and cross-selling, or how to organize staff sales time, which has a significant impact on productivity responsibilities. and profitability. (Research Paper OP 01-01) SB These questions are nothing new. But the leading research of Misra, Pinker and Shumsky pulls these issues together—with a twist: What role does the We are saying there are probably level of learning play in the success of the sales team? Through numerical experiments that bring learn- some missed opportunities for BUSINESS 2001 Winter ing into the mix, the authors show how the experi-

“ SIMON ence of the salesperson, the price of the product and the way staff are organized work together in complex having a better salesforce. ” 11 12 SIMONBUSINESS Winter 2001 Feature ILA .SMNGAUT COLO UIESADMINISTRATION BUSINESS OF SCHOOL WILLIAM E. SIMON GRADUATE “ benchmarking procedures htaaeistiko as of think academics What ytebsns omnt spoiigadtie e of providing adetailed set as community thebusiness by particularly important to shorten its debt maturity.debt its shorten to important particularly be would it leverage, of level higher a choose to firm a prompted circumstances tax if Forexample, says. firm’sthe affect he structure, maturity appropriate firm’sa change also would would that policy leverage areas.Transactions other on effect their for examined be to need area one in made decisions vines; like effect. similar a have may debt long-term much too issuing And, project. profitable a pursuing from managers discourage can high too is that leverage choosing Forinstance, says. firm’sa to respectSmith decisions, investment future maturity. and leverage corporate between relationship the examine management, and economics of professor ate associ- Marx, M. Leslie and finance, of professor and Administration Business Professorof Distinguished Maturity,”Barclay,and J. Michael and SmithAlumni Leverage of JointDetermination “The In finance. corporate of facets two examines that paper a written mistakes.” make to are they likely less the decisions, of set this of implications the understand managers help can we clearly more “The School. Simon the at nomics eco- and finance of professor and Administration Business ProfessorEpsteinof Henry and CliffordW. says choices,” policy Jr.,Smith Louise discipline’smysteries. the of more untangle help to want who academics ing lead- by exploration of level deeper a undergoing are maturity.debt and issues leverage These of issues ture struc- capital the with particularly decisions, finance corporate making in aid to framework richer a for Leverage andMaturity Determination of The Joint T Far from standing alone, these facets intertwine facets these alone, Farstanding from with incentives create maturity and leverage Both have colleagues School Simon two and Smith complex involving decisions difficult are “These aut research faculty people in the business community to look to community business the in people CFO’s prompts every office in occur that deliberations policy basic of complexity he testing theories o aia structuredecisions. for capital (Research Paper FR 01-20) Paper(ResearchFR decisions.” structure capital for procedures ing benchmark- of set detailed a providing as community business the by viewed be should theories testing as of think academics “What adds. Smith knocks,” hard of school the in education their on relying CFO’sthat simply one develop the than productive more and richer focused, is that problems these about thinking for framework a provide help is do to trying road.” critical a along step another we’rewhat of as think doing to important is It lems. prob- these on others’attention focus help to going we’reprocess, this through “Wethat hope explains. Smith data,” the analyze and questions these with study. further require will that questions additional raises it as level—even new a to structure finance rate Finance, the in lished individually.only facets these at look papers those and decade, a than more little back go data the to theory this link to Previous efforts firms. industrial 5,000 than more for data of decades two study to ods meth- statistical sophisticated using jointness this explore to first the is paper pathbreaking The them.” between substitution of degree a is there because coordination their for need the recognize clearly more together,dimensions we two these at looking “By says. Smith sions,” deci- these of jointness the is cern “This isn’t just an academic issue. What we areisn’twe What “This issue. academic an just pub- be paper,will The which “We’ve made huge changes in the way we deal we way “We’vethe in changes huge made con- paper,primary this our “In takes the research in corpo- in research the takes Journal of CorporateJournalof should be viewed SB

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Marx Smith Barclay ILA .SMNGAUT COLO UIESADMINISTRATION BUSINESS OF SCHOOL WILLIAM E. SIMON GRADUATE money left on the table.” the on left money of amount raw the by indicated is than firms Internet B2C to costly less be may underpricing “IPO that and “economicallyaresignificant,” prices IPO low of benefits marketing the that particular,find In they markets. financial and markets product between tion interac- an is there that show Lewellen and Demers millions. the Webtheir in numberedof sites some says. Demers site,’” our to people get and table the on grow,to grow, grow.money to grow—spendLeave traffic. of amount fair a generate must site a database, the in mention a earn United States.the To around users Internet 55,000 WebbyNielsen//NetRatings,tracks visits which site 1990’s.IPO’slate had studied the that They in firms Internet (B2C) business-to-consumer at looked ToLewellen significant? and that Demers out, find really tradeoff marketing the Is table? the on money explains. Demers underpricing,” of form the in table the on million $72 of average an leaving and billion $71 over of proceeds raising UnitedStates,the in public went companies Internet write. authors the staggering, are amounts dollar ing result- The sold. shares of number the by multiplied values. stock skyrocket that benefits marketing create table, the on IPO’s,money underpriced leaving that by shows research stuff.weirdTheir the on light sheds finance, in student Ph.D. Simon a Lewellen, Katharina co-author and School, Simon the at accounting boom.” Internet the with sified inten- really it but average, on underpriced been have (IPO’s)offerings public initial that decades for known trading. of day first the on percent 100 than more by increase to stock for unusual 1990’s,not late was the it In ing. Feature Evidence From Internet Stocks Internet From Evidence IPO’s: The Marketing Role of E The companies’ instincts proved correct; visits to visits provedcorrect;companies’ instincts The ‘Wewas, have companies these of mindset “The much so leave to willing companies are Why 373 mid-1990’s“From2000, the February to gain price first-day the is table the on left Money of professor assistant Demers, by study recent A “We’ve says. Demers on,” going “Weirdwas stuff sector while pursuing a Ph.D. in account- in Ph.D. a pursuing while sector Internet the of years Valleyboom the during Silicon the in lived Demers A. lizabeth aut research faculty “ ates. (Research Paper FR 01-15) Paper(ResearchFR ates. gener- IPO the that mentions media of number the and IPO its underprices company a which to extent the between correlation a findings: IPO’s1990’s.their held the Among that during companies non-Internet selected, randomly 220 for mentions media the tracked They contend. 1990’s,late authors the the of issues” market “hot the and sector Internet the beyond even extend activity.market to attuned ally usu- not are who Stewart’sfans loyal among image Martha enhanced further public going instance, For interests. similar of people or friends among conversations and e-mails rooms, chat into circles quality.”higher as seen are public go that Companies public. going to value signaling a is there that theorize researchers “Some Demers. comments share,” mind and print company.the about buzz a creates turn in which tion, to B2C The marketing value of underpricing may underpricing of value marketing The investor usual the beyond spreads buzz The you buys eventually IPO “Underpricingyour atten- UnderpricedIPO’smedia robust generate P nepiigmyb escostly beless IPO underpricing may sidctdb h a mutof theraw amount indicated by is nentfirms Internet oe etonthetable. left money SB than

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Lewellen Demers 13 SIMONBUSINESS Winter 2001 14 SIMONBUSINESS Winter 2001 ILA .SMNGAUT COLO UIESADMINISTRATION BUSINESS OF SCHOOL WILLIAM E. SIMON GRADUATE Cover Story Cover such a person.” a such is JimGleason others. lead and inspire can who person whole a creating of process a is sets—it skill and knowledge of acquisition the than more is education M.B.A. purposeful. more even is JimGleason after building this name to sion deci- our But education. ness graduatebusi- to and School Simon the Foundationto and family Gleason the of cation dedi- and generosity oratesthe commem- name the course Of “Why Business — Charles I. Plosser I. Charles — ae .Gleason JamesS. Simon School DedicatesGleasonHall Dean, Simon School Simon Dean, Open Hall? gleason hall A $4 million leadership gift from gift leadership million $4 A School. Simon the Universityand the of supporter loyal a been Rochester,long Mr.has Gleason Life TrusteeUniversityof the of a and Programclass Development School’sExecutive first Foundation.Gleason of The chairman and Corporation Gleason of officer executive chief and chairman ’68, Gleason JamesS. benefactors— alumni loyal most School’sthe of one of generosity and leadership the to tribute a also is It education. business School Simon world-class a of value and quality the to testament enduring an is efficiency,result the and with elegance blends successfully interior,Hall stately Gleason and building is James S. Gleason Hall. Gleason JamesS. is building that inhabitants, its of aspirations and hopes the exemplified building a ever If A graduate of the Simon the of graduate A façade brick majestic its With dedicated interview rooms. rooms. interview dedicated eight including suite, Management Career expanded significantly a and rooms study 15 classrooms, new five houses It feet. square 38,000 by School Simon the for space usable increases Hall ing—Gleason School’sSimon build- classroom the Hall, Schlegel designed ago, decade a than more Abbott—who, Shepley,and RichardsonBulfinch, firm architectural Boston-based 2001. fall in partners corporate and Community Simon the to doors its opened building the corporations, and foundations donors, generous other from funding additional With 2000. May in project million $10 the on ground break to School the Foundationenabled Gleason the According to Simon School Simon to According the by designed Skillfully for ceremonies. dedication during ’68 GleasonJames S. said tion,” institu- fine this of part a be to proud deeply am “I Bird’s eye view from the 4th floor of the main stadium-seated 200-seat auditorium/classroom. 200-seat stadium-seated main the of floor 4th the Bird’sfrom view eye Gleason Hall relieves that pressure and pressure that relieves Hall Gleason students. our recruiting in interest porate cor- including services and support student to related activity of level the in increase an to due it of much pressure,increasing under “thosecame explained, facilities 1990’s,”the during he size and reputation in “Asgrew School buildings. the existing School’sthe on pressure the relieve to and space additional for need a of out born was building Plosser, new I. the Charles Dean ILA .SMNGAUT COLO UIESADMINISTRATION BUSINESS OF SCHOOL WILLIAM E. SIMON GRADUATE ratepartners. corpo- and alumni students, by used be will Room Reading Inc.)Group, Energy (RGS RGS lounge second-floor The An impressive new night view on the Simon campus Simon the on view night new impressiveAn WILLIAM E.SIMONGRADUATE SCHOOL ISSUED FORPERMIT: 21 AUGUST, 2000 ISSUED FORCONSTRUCTION:8/25/00 UUT15,2000 AUGUST _._._ _.._.._ _..._..._ Partition Types BLUEPRINT Job No.3299 OF BUSINESS ADMINISTRATION 1/8” =1’-0” NVRIYOFROCHESTER UNIVERSITY SCALE JAMES S.GLEASONHALL EE OSETXA-8.0 REFER TOSHEET ALPARTITION TYPES WALL IS FLOORPLAN FIRST SLATE 2 SLATE 1 N II OFWORK AND LIMIT EXISTING BUILDING 1 1 HourFireRating 2 HourFireRating 3 HourFireRating N A102 Drawing Number Project North 15 SIMONBUSINESS Winter 2001 WILLIAM E. SIMON GRADUATE SCHOOL OF BUSINESS ADMINISTRATION

Cover Story gleason hall

“I think it’s important to have space to reflect the aspirations of those people who are creat- ing and transmitting learning in those spaces, and certainly here at Gleason Hall, we have a facility that I think matches the aspirations of the faculty and students of the Simon School and the faculty and students that we might be see- ing at the Simon School in the future.”

— Thomas H. Jackson President, University of Rochester

From left, Thomas Jackson, James Gleason and Charles Plosser share a quiet moment before the dedication ceremonies.

assures that we will continue to for Alumni Relations and have a physical campus that is Development. commensurate with the excellence During dedication ceremonies of our programs.” on November 19, 2001, Mr. For students, that means Gleason expressed the motivation expanded physical space which behind his leadership gift. will allow them to focus on team- “Despite my unease at having my work instead of searching for a name on this hall,” he said, “I place to work. For the School’s decided that if it were going to be Admissions team, the new build- placed anywhere, that it should be ing with its state-of-the-art facili- at this wonderful University and ties provides a significant selling at the Simon School which has point when hosting prospective been so important in my life. students. Corporate partners who While I am still unnerved, I am regularly visit the School’s Career deeply proud to be a part of this Management Center are equally fine institution.” impressed—they now have eight In his dedication remarks, dedicated, spacious suites to inter- Plosser said the naming of James view potential employees. In S. Gleason Hall goes beyond addition, the project will encom- commemorating the longstanding pass renovation of parts of generosity of the Gleason family Schlegel Hall, including the and Foundation to the Simon Executive Development Program School and University. “Our suite and newly refurbished areas decision to name this building BUSINESS 2001 Winter The second-floor conference room will serve as a meeting area for the Simon Community. SIMON

16 WILLIAM E. SIMON GRADUATE SCHOOL OF BUSINESS ADMINISTRATION

BLUEPRINT

Partition Types _..._..._ 3 Hour Fire Rating _.._.._ 2 Hour Fire Rating _._._ 1 Hour Fire Rating

“Despite my unease at having my name on WALL PARTITION TYPES this hall, I decided that if it were going to be REFER TO SHEET XA-8.0 placed anywhere, that it should be at this

wonderful University and at the Simon EXISTING BUILDING School which has been so important in my AND LIMIT OF WORK life. I was fortunate to be a member of the first EDP and SLATE 1 from that Program took away a myriad of things which I have found invaluable in trying to run a business.” SLATE 2 § “The Simon School is clearly one of the best schools in the world. The faculty is second to none, scholarly outputs as well as graduates have a major impact on the business scene, a wonderfully diverse student body and satellite pro- grams in other countries give Simon an international flavor which is consistent with the direction in which business endeavors are moving today. While I am still unnerved, I am deeply proud to be a part of this fine institution.” 2 —James S. Gleason ’68

ISSUED FOR CONSTRUCTION: 8/25/00 after Jim Gleason is even more pur- and work here.” ISSUED FOR PERMIT: 21 AUGUST, 2000 poseful,” Plosser stated. “M.B.A. Thomas H. Jackson, president of education is more than the acquisi- the University of Rochester, shared Project North tion of knowledge and skill sets—it his perspective on the building’s sig- is a process of creating a whole per- nificance, stating, “Certainly here at son who can inspire and lead others. Gleason Hall, we have a facility that N Jim Gleason is such a person.” I think matches the aspirations of He continued: “Now that his the faculty and students of the name is above the entrance to this Simon School and the faculty and UNIVERSITY OF ROCHESTER building, it will be seen by the many students that we might be seeing at WILLIAM E. SIMON GRADUATE SCHOOL talented people who pass through the Simon School in the future.” OF BUSINESS ADMINISTRATION our M.B.A. programs, and by the Said Plosser: “Gleason Hall will people who educate and support enrich the educational and social JAMES S. GLEASON HALL them. I hope they will all pause and environments of the Simon School, think of Jim Gleason’s very positive and provide greatly enhanced SECOND FLOOR PLAN contributions to our School, accommodations for our students University, community and world, and corporate partners.” SB Job No. 3299 and consider it an honor to study AUGUST 15, 2000 A103 BUSINESS 2001 Winter Drawing Number SCALE SIMON 1/8” = 1’-0”

17 18 SIMONBUSINESS Winter 2001 ILA .SMNGAUT COLO UIESADMINISTRATION BUSINESS OF SCHOOL WILLIAM E. SIMON GRADUATE Cover Story Cover rooms in James S. Gleason Hall.GleasonJames S. in rooms study new many the of one utilizes 2003, of Class Colmenares,Marly and more options for privacy and comfort.” and privacy for options more and space greater with Center Computing virtual a create will networkwireless a migrationto rent concur- lectures.The Kalmbach and Horizons Broaden like presentationsYour high-demand attend to students Simon of number greater a enable will classroom/auditorium 200-seat a of addition teamwork.The productive in spent time to team their with work to place a for searching spent time shift can students that means rooms study of doubling The lives. their to freedom of degree another adds that space cal physi- of expansion the through students Simon benefits HallGleasonJames S. of opening “The — Stacey R. Kole R. Stacey — Associate Professor of Economics and Management and Economics Professorof Associate ProgramsM.B.A. and for Dean Associate gleason hall Simon School.”Simon the for point selling nificant sig- a providesHallGleason them; to available are that facilities the in interested always are dents capability.Prospectiveputing stu- com- enhanced and space agement man- careerincreased rooms, study them—more to resourcesavailable more have students our that means This class. the to students additional any adding without students, M.B.A. our for space additional providesHall“Gleason the Florescue-von Manstein Plaza. Florescue-vonManstein the across looking Hall,Simon G. Carol from School the of view new A — Pamela A. Black-Colton PamelaA. — Administration and Admissions M.B.A. for Dean Assistant WILLIAM E. SIMON GRADUATE SCHOOL OF BUSINESS ADMINISTRATION

BLUEPRINT

Partition Types _..._..._ 3 Hour Fire Rating “Gleason Hall provides a home for the new Career _.._.._ 2 Hour Fire Rating Management Center and Career Research Center, _._._ 1 Hour Fire Rating boasting 300 percent more space over our former location in Schlegel Hall. This addition serves to fur- ther underscore the Simon School’s commitment as WALL PARTITION TYPES REFER TO SHEET XA-8.0 outlined by Dean Plosser in The Path to Excellence to students for both their academic and career search EXISTING BUILDING endeavors. Our greatly expanded facilities are AND LIMIT OF WORK delighting corporate partners who now enjoy their choice of eight dedicated, spacious interview suites. SLATE 1 The Simon School is well positioned to provide the

level of customer service and career search resources SLATE 2 expected of a top M.B.A. institution.”

— Lisa M. McGurn Assistant Dean for Career Management

“The face of Simon being shown to recruiters, cor- porate sponsors and prospective students is better than ever. All in all, the physical resources of our 3 business school are nothing short of outstanding, and now it’s up to the talented intellectual resources (the Simon faculty and students) to put this new building to good use.” ISSUED FOR CONSTRUCTION: 8/25/00 ISSUED FOR PERMIT: 21 AUGUST, 2000 — Patrick Haughton ’02

President, Graduate Business Council Project North

N

UNIVERSITY OF ROCHESTER

WILLIAM E. SIMON GRADUATE SCHOOL OF BUSINESS ADMINISTRATION

JAMES S. GLEASON HALL

THIRD FLOOR PLAN

Standing room only Job No. 3299

during Gleason Hall AUGUST 15, 2000 dedication ceremonies A104 BUSINESS 2001 Winter Drawing Number SCALE SIMON 1/8” = 1’-0”

19 20 SIMONBUSINESS Winter 2001 ILA .SMNGAUT COLO UIESADMINISTRATION BUSINESS OF SCHOOL WILLIAM E. SIMON GRADUATE Cover Story Cover A sky view of the intricate lighting in the new building new the in lighting intricate the of view sky A by faculty and students.” and faculty by resources information valuable of sharing the and presentation the creation, the in factor key a as environment learning our of effectiveness the improves and nology tech- communication in latest the contains HallGleason building. the throughout technology integrationof careful on deliberatefocus and strong placed weHall, Gleason for phase planning the “During — Kevin Brennan Kevin — Information Technologies for Dean Assistant gleason hall technology. communication in latest the with equipped arerooms Study — RonaldW. — Hansen opportunities.” technology changing ever- to adapt to us allow also will but technologies, classroom in improvements provides only not Hall GleasonJamesS. new The material. their senting pre- for technologies latest the in interested also are they that surprise a be not should It research areas. their of edge cutting the on being on themselves pride faculty “Simon Faculty and ResearchFacultyand for Dean Associate Senior WILLIAM E. SIMON GRADUATE SCHOOL OF BUSINESS ADMINISTRATION

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Partition Types _..._..._ 3 Hour Fire Rating Windows of Opportunity, _.._.._ 2 Hour Fire Rating Rooms of Knowledge _._._ 1 Hour Fire Rating The “Windows of Opportunity” campaign WALL PARTITION TYPES REFER TO SHEET XA-8.0 offers Simon alumni and friends a unique way

to support the construction of Gleason Hall. EXISTING BUILDING With a $1,500 gift, you may choose to honor AND LIMIT OF WORK

someone in your family, a friend or a favorite SLATE 1 faculty member. An individual bronze plate will be mounted next to your gift, and your SLATE 2 name will appear on a central donor board. Payments may be made in one, two or three installments. In addition to windows, there are Gleason Hall donor opportu- nities at levels ranging from $10,000 to $1 million for study rooms, offices, classrooms and suites. For further information about windows and rooms, contact M. Eve Elzenga, Office of Alumni Relations and Development, at (585) 275-9176. 4

ISSUED FOR CONSTRUCTION: 8/25/00 2001–2002 Simon Corporate Partners ISSUED FOR PERMIT: 21 AUGUST, 2000 Simon thanks the 2001–2002 Corporate Partners for their generosity and support: Project North

Citigroup Inc. Procter & Gamble N Eastman Kodak Company Prudential Insurance Company of America General Mills Roland Berger Strategy Consultants UNIVERSITY OF ROCHESTER Global Crossing United Technologies Corporation WILLIAM E. SIMON GRADUATE SCHOOL JPMorganChase OF BUSINESS ADMINISTRATION Wegmans Food Markets, Inc. JAMES S. GLEASON HALL Johnson & Johnson OppenheimerFunds FOURTH FLOOR PLAN

For information regarding the Corporate Partner Program and membership, Job No. 3299 contact M. Eve Elzenga, Office of Alumni Relations and Development, at (585) 275-9176. AUGUST 15, 2000 A105 BUSINESS 2001 Winter Drawing Number SCALE SIMON 1/8” = 1’-0”

21 WILLIAM E. SIMON GRADUATE SCHOOL OF BUSINESS ADMINISTRATION

In Memoriam Jeffrey R. Smith ’88 and Zhe “Zack” Zeng ’98 —by Charla Stevens Kucko ranquility painted the Manhattan skyline that Tuesday morning in September as daily commuters filled the T bustling streets below. The time was around 8:15 a.m. Thousands of people—among them Simon alums Jeffrey R. Smith ’88 and Zhe “Zack” Zeng ’98—were on their way to work—Smith at Sandler O'Neill & Partners on the 104th floor of the World Trade Center’s South Tower and Zeng at the Bank of New York on nearby Barclay Street. The routine calm quickly turned to chaos at around 8:45 a.m. when the first airplane came without warn- ing and hit the World Trade Center’s North Tower. Approximately 18 minutes later, another plane, flying danger- ously low over Manhattan, struck the South Tower. From that moment on, September 11, 2001, would be forever etched on the pages of world history and in the hearts and minds of every American. And it would have a special meaning for every member of the Simon Community.

Jeffrey R. Smith ’88 laughter and good humor. The two Friends who knew Jeff Smith say he friends spoke over the phone the week had three loves in life—his family, his prior to the attack. “I was going to be friends and his Miami Hurricanes. in New York on September 24, and we Having grown up in Coral Gables, Fla., were going to get together and look at Smith was an avid fan of the football wedding pictures. He was in a very team. After graduating from Simon, good mood,” Degenhart recalls. Smith Smith had one goal in mind—to work lived in New York City with his wife, on Wall Street. It was a goal he pur- Ellen, and daughters Margaret, 3, and sued with persistence and determina- Charlotte, 1. Degenhart says Smith tion, and one he finally achieved when was a caring, loving father. “He doted he landed a job as an equity analyst over his girls, and he did a lot for Photo courtesy of Michael Degenhart with Sandler O’Neill. Smith, who was them,” Degenhart explains. “He came Jeff Smith (left) and Mike Degenhart at 36 and a 1987 University of Rochester to Ithaca to visit a few times, and he Degenhart’s wedding on June 23, 2001. graduate, was actively involved in the would strap those girls on his back and Simon Community and had many take off—he was a very good father.” was great to see him again in the city friends at the School. In the aftermath A memorial service was held for knowing that’s where he always wanted of the disaster, Smith was reported Smith on September 29 at Green Pond to be,” Chakrabarti explains. “We kept missing by the investment-banking firm Yacht Club in Green Pond, N.J.—a in touch, mostly over the phone, and it where he worked. place where he spent summer vacations was wonderful to reconnect with him.” Michael Degenhart ’88 and Smith with his family. More than 600 people On September 11, both Degenhart were best friends during their time at attended the service, many of them and Chakrabarti’s thoughts immediately Simon—a friendship they maintained Simon alumni, including Smith’s col- turned to Smith. While both hoped until Smith’s death. “Jeff was a caring lege roommate, Krish Chakrabarti ’88. that Smith was safe, their fears were person who never put himself first,” While at Simon, the pair met through eventually confirmed. Degenhart says explains Degenhart. “Where a lot of Degenhart. Chakrabarti remembers Smith called his wife after the first people lose touch with friends from Smith as a warm and energetic person. plane hit the Trade Center and said he high school and college, Jeff was very “Jeff played football, was heavily would remain in the building. “If Jeff good about keeping up his friendships involved in campus life and always in saw somebody struggling or needing and doing what he could.” Degenhart touch with fellow students helping help, he would have put their safety was a reader at Smith’s wedding four them out. He was very caring, and in before his own. I still, in my mind, years ago, and Smith was a groomsman my times of need, he was always there believe that he was helping others try- in Degenhart’s wedding on June 23, to help.” Following graduation, the ing to get out which could have slowed 2001—the last time they saw one two friends drifted apart following dif- his progress toward getting out if he another. Degenhart remembers a pre- ferent career paths, until a chance meet- had the chance. That’s just the kind of BUSINESS 2001 Winter wedding round of golf filled with ing on the subway in Manhattan. “It person he was.” SIMON

22 Photo courtesy of Ada Grant Zhe “Zack”Zhe Zeng become part of the community and give and community the of part become to Zack encouraged she and China, in lived they while teacher school a was society,”Wang.explained mother “His to back something give to wanted “He him. on effect Wang,profound a had Sam roommate, college to according that, event died—an father his UR, the at dent stu- a was Zeng While Brooklyn. in tled set- family The 15. was he when parents his with U.S. the to emigrated he China, Canton, of native A 30. September needed.” when help to ready always was he and everywhere, him with bag EMT his carried always “He 1997–98. during interned Zeng whereXerox, at manager program pricing Loughlin, Karen Zack’swas this that said ing choice,” know- in comfort some is “There scene. towardthe safety,south to ran north Zeng running of instead that learn to surprised not wereFormer colleagues help. could the Tradehe to if going see was to Center he them told Zeng technician, medical emergency certified A safe. was he know them let to girlfriend his and mother his called immediately he say leagues col- Friendsand hit. plane first the after just workplace his at arrived graduate, RochesterUniversityof 1995 a and 28 was who Zeng, others. for concern and selflessness their common—particularly in much n’tshared they but other each know did- “Zack”’98 ZengZhe Jeffand Smith Zhe “Zack” Zeng ’98 ILA .SMNGAUT COLO UIESADMINISTRATION BUSINESS OF SCHOOL WILLIAM E. SIMON GRADUATE Zeng would have turned 29 on 29 turned have would Zeng ’98 (third from left) at a friend’swedding.recenta at left) from(third ’98 nothing but pride for having known him.” known having for pride but nothing “Youadds, WangLoughlin feel says. wouldn’tthat then Zack,” been have hadn’the wish but “I back, heroism.gone for award posthumous a Zeng give to government the petitioning signatures 750 than family.”more collected Friendshave his of care took who person dedicated a and question, hero—no a as remembered be will “Zack Loughlin, to According selfless. and giving kind, committed, intelligent, humble, him: describe to used words the Among Zeng. described tures cul- and ages diverse of people as service the during evident became theme mon com- A Chinatown. in Zeng for service memorial a attended who people 200 than South the Towerbefore collapsed. stretcher a on woman injured an helping NewFOXYork.shown in was TV Zeng on airedwere Zeng of images known last he’d knew The says. Loughlin there,” be didn’tI when answer,. an . I get . safety his for concerned was I because morning that office his call to tried “I Zack. to Loughlin’sturned immediately thoughts clear.was choice his but expired, was Zeng’sattacks, the certificate of EMT day the On PittsfordAmbulance. with teered VolunteerWangwhile Ambulance volun- Brighton for worked Zeng certification. EMT Wangconvinced his Zeng earn to time, that During School. Simon the and UR at years his during Zeng with lived graduate, Wang, UR others.” ’96 to a Loughlin and Wangand moreLoughlin among were Karen news, the Uponhearing SB New York,N.Y. 10013. Street,Law,2001, SuiteCanal 254 P.C.Luk, & Luk to sent be at Attorneys FamilyZeng Zhe Trustthe may Account to payable made Checks 800-225-1581. 1- call or 02940-1203, Providence,R.I. P.O.Investments,Putnam 41203, Box to sent be may InvestmentsPutnam to payable made checks daughters, Smith’sfor Tofund a to contribute future. the in families their aid to Zeng Zack Jeffand Smithof memory in lished estab- Editor’sbeen Note:Fundshave in memoriam in Chevalier de la Legion d’Honnuer.Legion la de Chevalier him declared France,which of and Lion, Dutch the of Order the in Commander Knight a him named Netherlands,which the others, among of, those to commendation its Universityadded The history.and arts fine the medicine, in advances to dedicated foundations of executive and initiator,benefactor,the generous as Heineken saluted also RochesterUniversity of the degree, Laws of Doctor Honorary the him awarding countries. 150 than more in markets with organization 48-company a of centerpiece the and exporters, estimable and Netherlands’dynamic the most of one to brewery static relatively and traditional but successful a company’shis in from metamorphosis remarkable Heineken’sthat methods felt most was influence distribution modern and advertising marketing, of University.Erasmus with program M.B.A. tive School’sSimon the execu- joint of ceremonies commencement during 1989 in Rochester of Universitythe from degree orary 78. was He Netherlands. the in 3 January on pneumonia of world’sdied brewers, largest three the of one ther’sinto company beer Amsterdam grandfa- his built who Heineken, Henry Alfred Alfred H.Heineken But Heineken was also a humanitarian. In humanitarian. a also was HeinekenBut advance the in perhaps is It hon- an receivedHeineken SB 23

SIMONBUSINESS Winter 2001 Heineken 24 SIMONBUSINESS Winter 2001 ILA .SMNGAUT COLO UIESADMINISTRATION BUSINESS OF SCHOOL WILLIAM E. SIMON GRADUATE able, is not atypical of our Asia-based alumni. Asia-based our of atypical not is able, that, accomplishment recordof a Nobureveals event, arrangingthe for development, and relations alumni of directorexecutive ’96 NobuOtsuki Nobuaki Otsuki’96 Plosser and Budd Visit Six Cities in FourCountries in BuddCities Sixand VisitPlosser Alumni inAsia Welcome SimonContingent Andersen Consulting (now Accenture) as Accenture)(now Consulting Andersen Markets. SAP of Japaneseoperation the initiate to members management the of one am I processes. business their streamline and connect to users non-SAP and users SAP both helps that software collaboration e-business of marketing and development SAP,of subsidiary owned on focusing wholly- a is Markets SAP Japan. in ment develop- business of director deputy a as “Currently,for work I Starkman’98 tour,including the for together programs the put helped who alumni the all to thanks his offered also Plosser Dean programs.” our of success continued the to important very region this makes resource a as School the and other each see alumni Asia-based Rochester,”Plosser.“That Dean noted from distance their despite are, region this in alumni our active how see to gratifying is “It prominence. national Simon’sfor reasons other inter- increased and programs new Hall, Gleason about first-hand hear to Webhappy were site, the and publications via School the with touch in stay whom of many alumni, The 1997. since FarEast the to visit Simon-led November.first the was It early and October late in alumni Simon 100 than more with meet to Asia to traveled development, and tions rela- alumni of directorexecutive Budd, Alumni Alumni News Alumni A “Afterjoined I Simon, leaving Alumni NetworkAlumniNews the of issue last the in noted s Charles I. Plosser and Holli and Plosser I. Charles and Kyo Y.’00 Lee attended the November 1, 2001, Simon alumni reception at the Imperial Hotel in HotelImperialTokyo. the Budd,Holliat reception thanking alumni note Simon a In2001, November 1, the attended profile Andrew Nam’95 Andrew SAP Markets Inc. Markets SAP features , Dean , , Hartley in and achieved more than 1,000 percent 1,000 than more achieved and business the expand to capital venture U.S. the in half.com of that to similar quite is concept CD’s,DVD’s videos, The games. and books, used of transactions B2C/C2C on Japan,focusing in sites ping shop- Internet popular most the of one operates Bizseek Inc. Bizseek, of director managing and officer operating chief became I 2000, September InGroup. Services Strategic the for manager a Taiwan. Shoji ’98 Shoji Korea, Seoul’sHotel.Shilla at alumni RochesterUniversity of and Simon 40 than more for tion recep- a held and visits individual and corporate many made BuddHolli and Plosser Dean outings. golf informal for semi-annually meet also They network. recruiting and admissions School’sthe of supporters strong be to Networkcontinue KoreanAlumni Korea:South Seoul, Hong Kong:Hong future. near the in activities their malizing for- to forward look alumni Simon The School. the from degrees University,hold whom of most the of graduates 30 over to Taiwan.visit drew event The Plosser’sDean markedHyatt first Grand the at reception sored Taipei,Taiwan: “At Bizseek, I raised $4 million in million “At$4 raised I Bizseek, Deputy Director,Inc.DeputyMarkets Japan,SAP Development, Business Luigi Limentani ’98 Limentani Luigi in Japan,and in The University-wideThe The Simon-spon- The Alex Lin ’97 Lin Alex Members of the of Members and Hajime in Dean Plosser visits Simon alumni during his trip to Asia. to trip his during alumni Simon visits Plosser Dean post-bubble period.” post-bubble the in start-up Internet an for exit cial finan- successful a quite be to considered is M&A This mall. shopping Internet successful most the runs 1997, in lished estab- Rakuten, months. 12 in million $15 to million $1.5 from Bizseek of value corporate the enhancing million, $15 of value corporate total the at Corporation Rakuten to Bizseek sold we 2001, August of end the year.At a within growth sales was well attended. well was in HotelTokyoImperial the at alumni Simon for held they reception The production. seed agriculture to ing bank- to production photo from range businesses whose alumni with vidually indi- visited BuddHolli and Plosser Tokyo):and (OsakaJapan forums, also attended the reception. the attended also forums, M.B.A. international at School the represent to KongHong in grams, pro- M.B.A. for dean associate Kole, R. Stacey graduates. Simon many including alumni, 25 drewHyatt GrandKongHong the at reception while remark-while Dean personality tests. personality interactive variousprovides Francisco-basedWeb that site October 12, 2001. Ike is Ike 2001. 12, October daughter,on their Kaede, of birth the celebrated Midori, TokitaIke 1994 at sales of president vice is David 2001. 31, August on Rose, daughter,their Emily of birth the celebrated Elyse, wife, SteinbergerDavid 1989 Rochester.in at director a Johnis 2001. 6, October on “Liam”William son, Francis, new their welcomed Martha, McKennaJohn 1988 Mergers Connects StudentsandAlumni Farash LuncheonProgram ADMINISTRATION BUSINESS OF SCHOOL WILLIAM E. SIMON GRADUATE career interests. Once or twice a year,a twice or Once interests. career of range broad a with students to appeal K Element at operations technology directs currently who consultant Andersen Arthur former firms. consulting and banks panies, com- manufacturing international at ence experi- by preceded often are careers local whose graduates with rich is which tion, popula- alumni Rochester the on marily pri- drawn has program the series, cheon Simon. after years the in careers their manage alumni our how about learn could students current that so program ’90 Aroesty Matt Corporation of uncle and School the of friend A students. of groups small to presentations informal make to campus to alumni Simon brought that series fast break-FarashMaxa endowed developer estate real commercial Rochester 1995, In Speakers such as such Speakers lun- popular a into evolved Having Emode , the e-learning company,e-learning the , and his wife, his and JPMorganChase executive vice president vice executive , a San a , and his wife, his and , Max established the established Max , and his and ogNf ’96 Neff Doug Farash and acquisitions Martin PutschMartin 1996 KoreaMTV at works currently Andrew 2001. 10, January Nam,on SangWook son, second their of birth the celebrated Youngwife, his Sohn,Kyung NamSukhee(Andrew) Stewart at president vice senior is Martin old. years two brother,is who William, joins Martin Baby 2001. 26, Julyon Hamilton, Martin Lee-Joy,son, their welcomed Ellis Martin 1995 Ltd. at operation, director,managing overseas , a , in Tokyo. in NewYork. in the Simon School Simon the help to I’veable been “I’mthat delighted Mr.says Farash. classroom,” tional tradi- the outside happens business about learn we what of much so school, to go we where students. of groups enthusiastic with speak to afar from visited have Blackvoices.com Tribune’s the of officer financial chief ’95 Barrionuevo and bank, investment Manhattan ’89 Farashrecently,lectures; given also have town of out from alumni in Seoul. in and his wife, his and TokitaCo., Seed and Martina and “Nomatter from the from Stern Chicago and ProvidentGroup , , Darien Elizabeth, on Elizabeth, Darien daughter,their of birth the celebrated Doug, band, Beall* Lorrie 1999 at ciate asso- an is Daniel 2001. 18, father’sOctober on name), (Kara’sOsselmann Guido late Wilhelm son, their of birth Osselmann Chai Daniel 1998 Kaiserslautern. HoldingPutsch at president vice is Martin Germany.Kaiserslautern, in 2001, 4, August on married wereKubler George P.George JohnsonCo. at strategist market a is Kara and Mass., Boston, Sam Ticknor Sam December 2001. Mike and Elliott are the founders of founders the areElliott and Mike 2001. December online cigar store. cigar online Mike McKay ’86 McKay Mike , a , The Brattle GroupBrattle The Carlos celebrated the celebrated , and her hus- her and , and in and Kara The Elliott Foo’90 Elliott ness leaders from Rochester and beyond.” and Rochester from leaders ness busi- up-and-coming some showcasing by students its to environment learning the of aspect important this provide in spoke to students at a Farasha in Luncheonat students to spoke * Executive M.B.A. graduateM.B.A. Executive * Netherlands. PAQUES,BK at director marketing is Thomas 2001. June12, on daughter,their Madelein, of birth Ingebor,the announced Dusseldorp* Thomas Vereijkenvan Rochester.of out Debbie Vangellow N.Y. Inc. Corning by employed is Lorrie brother,Michael.joins Kellan Darien November2001. 8, Gamble’s with still is Debbie 2001. August in son their ’94 announced the birth of birth the announced eGars.com sales group, workinggroup, sales , in PaintedPost,in , and his wife, his and in Balk, the Balk, in , a successful a , and Procter& Greg 25 SIMONBUSINESS Winter 2001 26 SIMONBUSINESS Winter 2001 ILA .SMNGAUT COLO UIESADMINISTRATION BUSINESS OF SCHOOL WILLIAM E. SIMON GRADUATE Force, died in Austin, Tex.,in Force,2001. died 31, August on (ret.) ’70 Kerwick R. David Col. Lt. Class TechnicalCompany Services by administered ProgramIntranet Corps NavyMarine the for assurance information for manager the officer,navalretired Peter A is November.early in reception Washington,the alumni D.C., PeterMermagen 1959 been on Xecom’son been of Board has Chuck Internet. the and networks telecommunication over communications free error- fast, for solutions to-use easy- integrated, highly vides pro- Xecom Calif.Milpitas, in with officer tive execu- chief interim of role the Bellavia Charles 1973 BOCES at services office business of administrator the Johnis 1995. December Yorkin Brockport at NewUniversityStateof the from administration business school in (CAS) degreeStudies Advanced of Certificate Baker G. John cars. passenger and vehicles utility sport buses, trucks, for products forged and systems chassis systems, driveline of manufacturing and validation engineering, design, the in experience of years 80 than more with leader world a is AAM Mich. Detroit, Co. Manufacturing & Axle of division forging the for manufacturing of dent Allman Ronald 1971 in memoriam in in Newark,N.Y.in Wayne-FingerLakes received a received is vice presi- vice is Xecom Raytheon has accepted has surfaced at surfaced American notes , based , in . ing GartnerGroup in 1998, GartnerGroupin ing join- Priorto workplace. new the managing for applications Web-enabledand services port sup- resources, infrastructure integrated workforce, remote the managing (E)TCO, including models financial strategy,corporate with tions solu- workplace of alignment the including workplace, the on IT of impact the on focuses technology.mation work His infor- of management business of arearesearch the in cializing at director improvement. productivity and tems sys- information care, health in specializing experience of years 30 than more has Denver,Stevenin Colo.firms consulting systems mation infor- care health independent Michael Bell* Michael 1978 applications. trial indus- for components metal powder of supplier leading a Corporation’sis group powder Hawk Ohio. Solon, in operation HPMG the for ters headquar- new a establish will Mike role, new his In group. Corporation’s of president appointed Corkran Michael 1977 Group of dent Dr.StevenLazarus 1974 board. the on seat his retain will and 2000 April since Directors , UnitedAir States, , a virtual consortium of consortium virtual a , Boundary Information Boundary GartnerGroup powder metal powder is a research a is has been has is presi- is Hawk , spe- , Washington,D.C. and Md. suburban in firm consulting technology dent of dent presi- vice currently is Xerox, and Kodak Eastman both Jackson*Eugene 1979 City. Mexico outside live family his Mexico AstraZeneca firm pharmaceutical the of cer offi- financial chief as faces he challenges the and Simon ing leav- since career his describing FarashSeries, Luncheon Max the of part as students Simon current 30 over to talk a gave Russ visit, his During College. at The student first-year a daughter,is who his visit to 2001 October Beyer Russ 1982 Poughkeepsie,N.Y. at engineer software advisory an is Barbara ship. leader- and speaking public for by ToastmastersInternational, given recognition of level est Toastmasterhigh- the Award, Distinguished the received NeumannBarbara 1981 N.Y. Skaneateles, in family his with resides Dennis consumers. to services enhanced and data voice, deliver to technology protocol voice-overInternet utilizes Datanet USA Group. HPAat principal Telecom was Dennis Datanet, USA ing N.Y.join- Syracuse, Priorto in officer executive chief Datanet USA Dundon B. Dennis LLP.PricewaterhouseCoopers at consultant ment manage- a as and Bradstreet & Dun and Xerox at tions posi- executive held Michael JacksonAssociates was on campus in campus on was as president and president as , a veteran of veteran a , has . Russ and Russ . joined I.B.M. , a , in ner in ner part- a is I.B.M. and Gamble Procter& at executive ing John Yengo 1986 in Tokyo. of director of post the holds currently TominoKotaro Chicago. Ellis and NewYork of office November,In the joined he securitization. asset of field ing Journal the in profiled GordonScott company.tion extrac- value and development property intellectual R&D, Technologiesheld privately a is Acorn Calif. Angeles, Acorn Technologies of officer operating chief Daniele*Joseph 1985 engineering, finance and law.and finance engineering, science, business, as fields such in advantages competitive seeking organizations to vices ser- information online-based of provider a is Dialog N.C., Cary,in Headquartered wide. world- operations for bility responsi- financial overall with executive financial chief the as serving finance, of president vice senior as 2001 September Corporation Dialog NaylorChris Corporation. Xerox Pyramid Technologiesand Clarify,including industry high-tech the within positions management financial senior Terayon,numerous held Carol joining Priorto tions. solu- broadband of provider Inc.Systems, TerayonCommunication at officer financial chief to ed Lustenader Carol * Executive M.B.A. graduateM.B.A. Executive * Barefoot AdvertisingBarefoot as a leader in the grow- the in leader a as , a law firm based in based firm law a , TeckCorporation , a former market- former a , , a premier global premier a , joined was recently was New YorkBar writes that he that writes was named was was appoint- was in Los in Kirkland in The in tems for management, elec- management, for tems sys- information puter-based com- in courses developed he Washingtonwhere Seattle in Universityof the from UCI to comes Sanjeev systems. tion informa- of professor associate Irvine’sschool business California– Universityof Dewan Sanjeev 1988 training. and services employment for funds ment invest- force work federal ister admin- Monroeto of County the and Rochester of City the by designated nization orga- not-for-profit a Alliance, ResourceRochester of tor Dr.Young direc-executive was position, current her to named Technology the at ProgramM.B.A. Executive the Dr.Ann Young* Nextelnetwork. the using applications data less wire- implement and develop Fortune with worksNick position, this CommunicationsNextel of group sales data enterprise the join to fall the Franciscoin Houston, Tex.,San from JenkinsNicholas internships. student supervises and marketing and planning strategic care health teaches N.Y.Buffalo, Shein College D’Youvilleat member faculty Hospital, (N.Y.)Buffalo General for planning of president Ambrus MagavernSarah 1987 N.Y.Buffalo, in based meats deli of supplier national of dent Zemsky* HowardA. clients. national inter- and domestic of range a with agency award-winning an is Barefoot Ohio. Cincinnati, ADMINISTRATION BUSINESS OF SCHOOL WILLIAM E. SIMON GRADUATE Rochester Institute of Institute Rochester IBP Deli Companies Deli IBP 500 companies to companies 500 is also an adjunct an also is . Prior to being Priorto . joined the joined is director of director is moved to moved is presi- is as an as . In , vice , , a , Pittsburgh, Pa.Pittsburgh, Advisors Capital Laurel for analyst equity senior and Simon Wu 1989 of his family business, family his of president become Napierto & TomCarroll Fla. FortLauderdale, in located is company The Caribbean. the and America Latin LA for administration and accounting of dent EdwardBalcerzak 1990 Genesee Valley.Genesee Women’sFoundationof the of chairwoman appointed recently also was Karen nesses. Kodak’sof busi- commercial remainder the with businesses output and printing mercial Kodak’sin opportunities com- leverage and growth identify to work and customers raphy photog- professional important of needs the meeting on focus will Karen position, new her In president. vice and ing, imag- consumer business, ucts prod- output the of manager Previously,general was Karen November2001. 16, Kodak’s of president became Smith-Pilkington*Karen region. Northeast the for expert chain supply and operations an as well as Buffalo, and Rochester Albany,for leader Syracuse, consulting market middle the is He office. Rochester the of out working group Services Advisory Business LLP Coopers at manager Hessney Larry e-Business. in management information and banking and commerce tronic , which provides service to service provides which , professional unit on unit professional is a vice president vice a is Pricewaterhouse- , in the Assurance the in , has left Manning left has is a senior a is DIRECTV is vice presi- vice is Eastman Studio in opment. devel- business and marketing of president vice was she where Sychroncompany software start-up for workedNithya Previously, Calif.Milpitas, in services and solutions networking corporate in leader at ment manage- product of director RuffNithya NetworkingInstitute. Information its and school University’sMellon business Carnegie at taught also has He LLP.PricewaterhouseCoopers at practice tainment Enter- and munications Com- Information, the in consultant principal a was Giri company,the joining Before Calif. Pleasanton, in quartered head- AdventNetis agement. man- and strategy product of (Ph.D.)Giridharan company,appointed has infrastructure management AdventNetInc. Netherlands.the in leader market a is and panies com- construction for software provides Kraan Rotterdam. BVBouwcomputing of owner president/ and shareholder ty Broekhuizen*Eric 1991 Charlotte, N.C. Charlotte, in office second a opened City.recently Jenniferhas NewYork in companies 500 servicing agency ment Tempsemploy- temporary a is JenniferAwards. Achievement Under40” “40 its of recipients the of one as magazine, ness busi- small and professionals NetworkJournalThe Temps,Inc. of founder and dent Singleton D. Jennifer N.Y. TomAvon, in works and lives Company SupplyPottery Sales AvayaInc. Kraan , was featured in featured was , was appointed was , an Internet an , , a global a , is a majori- a is , a black a , as director as in Jennifer , presi- , Fortune Giri . with over 1,000 consultants. 1,000 over with firm marketing and nology tech- Paris-basedinformation a of partner PatrickDarmon TerenceGriswold’83 ’97 Anderson David including alumni, Simon other of number a boasts which firm, the at company good in Joeis clients. of variety wide a to services valuationprovides Rochester,in EmpireLocated firm. the of director managing Consultants of EcklJoe 1993 team. soccer ’88 Smith N.Y.,and he where Fairport,in live family his and Chris FarashSeries. Luncheon the of part as fall this pus cam- on Group,Energyspoke RGSthe of subsidiary ulated of officer ModestiChris 1992 applications. applications. distributed of management and deployment development, the for solutions infrastructure providing on focused pany Techologiescom- software a is NewYork, in Based Improv RCNCorporation. of dent Improv,presi- vice was Ami to move his officer.Priorto Technologies Amitabh Heda Amitabh headquarters. bank’sthe of out Charlotte ’00 Gardner’88 included team The September.in Simon to team America of with N.C., Charlotte, to Houston, from relocatedTex. Gordon Larry 1994 Empire Valuation , both of whom also work also whom of both , , a longtime employee longtime a , Energetix UmanisConsulting , led a recruiting a led , co-coach a youth a co-coach , has been named a named been has , as chief financial chief as and , who recently who , , chief financial chief , joined is a founding a is Bryan Smith Bryan , an unreg- an , Alan Tim and . Improv Bank , 27 SIMONBUSINESS Winter 2001 WILLIAM E. SIMON GRADUATE SCHOOL OF BUSINESS ADMINISTRATION

Greg Vangellow has left Lisa Morris left Maybelline’s Telecommunications in M&T Bank to take the Manhattan headquarters in Pittsford, N.Y. helm at R. W. Dake & June 2001 to join L’Oreal in Company, a Rochester con- London. She met with Slobodanka Novakovic is an struction firm specializing in other London-based Simon associate in the energy M & interior renovations. Greg alumni for an informal din- A group at Lehman Brothers and his wife, Debbie ’99, ner in November. in London. celebrated the birth of their son in July 2001. 1999 Burke Kennedy is an assis- 1996 tant treasurer for the Bank After a stint as chief finan- of New York in Manhattan. cial officer of one of his pre- vious client’s companies, John Lanphere* has joined Dave Halladay returned in Xerox Corporation’s Color September to M&T Bank Products Systems Group as Five Alumni Named to in Rochester as a vice presi- its color product integration dent in commercial bank- manager. He returns to Rochester “40 Under 40” ing. Xerox after a two-year stint In the seven years that the Rochester Business Journal, a business as director of engineering weekly, has been honoring the community’s young leaders, the 1997 for Moore Research Center. Simon School has enjoyed regular representation on its annual Orlando Lacayo is at GMI, John lives with his family in list of “40 Under 40.” In November, however, a record five a Xerox PARC spin-off in Rochester. Palo Alto, Calif., as vice Simon alumni were recognized for their business success and community service at a luncheon at the Hyatt Regency president of engineering. Ricardo Leiman* dined in Rochester. They included: GMI is a fast-growing com- early November with a pany formed to commercial- group of College and Simon Craig Cairns ’95, senior vice president at Howe and Rusling, an ize electric paper. alumni in London. He is a investment firm with over $700 million under management. general manager in the U.K. Craig is also a board member of the Veterans Outreach Center Mike Maxwell has recently for Eximcoop BV, Brazil’s (he is a Gulf War veteran) and a volunteer C.Y.O. basketball joined Document Strategies, third largest commodity coach. He and his wife, Pam, have five children. Inc. as vice president for trading company. marketing and channel sales. Based in Rochester, DSI 2000 Kathryn Cleary* ’91, director of marketing for City Blue Imaging Services. Her involvement in the community includes provides document imaging, Zdenek Kratky was on cam- board memberships at the Rochester Area Community storing and management pus to speak with incoming Foundation and the American Red Cross (Rochester Chapter) services. students on career choices in and volunteer work with a long list of social service organiza- September. He is a consul- Stephen Spencer left BNP tions. She and her husband, Mark, have two children. tant with the Boston Paribas earlier this year to Consulting Group in join IntesaBci, S.P.A. as Kevin Dickens ’89, a founder and co-chief operating officer of Boston, Mass. associate director of the Choice One Communications, a publicly traded telecommunica- Project Finance Group in tions company. He is a board member of Geva Theatre and the Kimberly Mann is director New York. Headquartered United Way of Greater Rochester. He and his wife, Julie, have of product marketing for in Milan, Italy, IntesaBci is two children. Sema Telecoms in among the top 10 largest Wilmington, Mass. banks in Europe. Erik Grimm* ’98, president of Suburban Disposal 2001 Incorporated, which provides certified document destruction 1998 and recycling services. He is treasurer of the Western N.Y. Dan Burnside is a senior Christina Chew joined Chapter of Volunteers of America and a board member of the portfolio strategist at Karpus Partners Healthcare in Greater Rochester Y.M.C.A. Investment Management. November, where she coor- He lives and works in dinates the commercializa- Peter M. Palermo III* ’96, president and chief operating officer Rochester. tion of scientific intellectual of Strategic Triangle, Inc., a high-performance management and property for the pharmaceu- strategic alliance consulting firm. He is on the boards of St. BUSINESS 2001 Winter Hugh Higgins* is a sales tical and biotech industries. Joseph’s Villa and the Medical Motor Service of Monroe compensation manager at Christina lives in Boston, County; he is also a member of the Simon School’s Alumni

SIMON Global Crossing Mass. Advisory Council. He and his wife, Lynn, have two children. 28 WILLIAM E. SIMON GRADUATE SCHOOL OF BUSINESS ADMINISTRATION

NOMINATIONS ARE BEING ACCEPTED FOR THE MAKE AN IMPACT!

Alumni involvement in the advancement 2002 of the Simon School adds value to the Richard L. Rosenthal degree you've earned. AWARD SAVE THE DATES... April 10, 2002 to be presented at Simon School com- Annual Spring Breakfast mencement ceremonies, to an alumnus or Genesee Valley Club, 7:30 a.m. alumna of the School or of the University Rochester, N.Y.

of Rochester. Candidates must be under May 24, 2002 the age of 35. The award recognizes inno- Alumni Golf Classic vative contributions in the fields of invest- Greystone Golf Club 1:00 p.m., Shotgun Start ment management and corporate finance. Walworth, N.Y.

To nominate a candidate, contact Sara McLaughlin, Please log on to www.simon.rochester.edu for an assistant director of alumni relations and development, up-to-date calendar of alumni events. at [email protected] or (585) 273-4888.

Invest in the Simon School Through Tax-Wise Giving By including the Simon School in your financial and estate plans, you may be able to benefit yourself.

There is a wide range of creative giving methods that will help ensure Simon’s status as a world-class business school well into the For more information on how you can 21st century. These instruments also allow you to optimize tax and strengthen the Simon School through economic benefits to you and your family in the following ways: planned giving, please contact M. Eve Gain a deduction on your current taxes, while generating a mea- Elzenga, director of major gifts, at sure of tax-free income through a charitable gift annuity. [email protected] or Fund a charitable gift with illiquid assets that you may not have (585) 275-9176. considered, such as real estate, life insurance or closely held stock. Pass assets to heirs while supporting the School, helping you to avoid or reduce estate taxes in the process while preserving the asset’s value for your heirs. BUSINESS 2001 Winter SIMON

29 WILLIAM E. SIMON GRADUATE SCHOOL OF BUSINESS ADMINISTRATION

Enron (Continued from page 9) won’twon’t have have consulting consulting services.” services.” ment creates incentives for damaged parties their retirement account in a single stock, In fact, companies retain their auditors to seek redress in the courts. The media which would increase the demand for as consultants for sound business reasons, and the plaintiff’s bar seek scapegoats; espe- investment advisory services. Zimmerman contends. For example, when cially scapegoats with deep pockets. The Zimmerman questions the wisdom of a firm wants to set up overseas operations, way the media and the politicians are these additional regulations. it usually needs advice to navigate the tan- attacking Arthur Andersen, and the way “Should government be in the business gle of tax laws of their domestic and foreign the law firms are lining up and filing law- of telling people how to invest their countries. The company could retain suits, I wonder if Andersen will survive this. money? People know that they shouldn’t another C.P.A. firm besides its auditor to “One thing we should keep in mind, in have their entire retirement account in one be a tax consultant. But the client would a dynamic free economy—where there is company. This is common sense and a vio- have to allow for a steep learning curve for rapid technological change and innova- lation of good financial planning that says the consultant to come up to speed—a sig- tion—is that companies are going to fail. ‘diversify.’ Any form of regulation ulti- nificant time and financial cost. Ethical And failures are good. It’s not good if mately is a restriction on our freedoms. behavior is ensured by strong incentives in you’re the failing company, of course. But Should the government protect us from the free market. business failures mean people are taking ourselves?” “There are rare cases where business risks. Some work and some don’t. Society Zimmerman is concerned that regula- people breach generally accepted ethical doesn’t get innovation and economic tion could cause more harm than good. standards. But the vast majority of transac- growth unless people take risks. And with “Whatever regulation they create as a tions that occur on a day-to-day basis occur risk taking, you must expect some business result of this situation is likely to impose far in highly ethical ways,” Zimmerman states. failures.” more costs on the 99.99 percent of compa- “So much of not just business but social Companies fail when they are no longer nies that don’t have problems than to pre- interactions are based on the person’s repu- able to provide services the public wants, vent a future crisis at the other .01 percent tation. You have a strong incentive to Zimmerman explains. Failure does not of companies. Government cannot prevent honor all sorts of personal and commercial necessarily mean fraud or mismanagement another Enron from making bad invest- commitments that you make. exists. ment decisions without impairing “In fact, businesses have very strong “There were plenty of dot-com failures entrepreneurs’ risk-taking incentives.” incentives to be ethical. The credibility of and people accepted those failures. Kmart While Zimmerman warns it is too early their products and services is wrapped up is in bankruptcy court because it can’t com- to tell who or what is to blame for the in their brand name.” pete with Wal-Mart and Target. And we Enron collapse, he says a complicated mix A few of years ago, Zimmerman says, accept that. Competitive markets prune of events could have made things go 200 people in Belgium and France reported the bad ideas and move the remaining wrong. nausea and dizziness after drinking Coca resources and people to more productive “As companies fail, managers try to Cola. Poor quality carbon dioxide and a uses.” keep them from failing, and they might not fungicide to treat wooden pallets in the A similar examination of what fueled be fully forthcoming of what the current warehouse were the problem. The compa- Enron’s rise and its collapse would give a situation is. If they were to reveal the situa- ny recalled 14 million cases of Coke from richer understanding of the situation, tion, it would cause the company to fail the region, launched big advertising cam- according to Zimmerman. sooner. Perhaps it’s human nature to be paigns and took a $60 million charge to “The media has not published an arti- overly optimistic. Auditors are aware of earnings to fix what might appear as a small cle, that I’ve seen, about what Enron’s busi- these tendencies and usually issue audit problem. ness plan was. What was their strategy? opinions warning investors of ongoing con- “They had a huge incentive to maintain Why were they a successful company for so cerns or problems. the consumer’s perception that they provide many years, and what suddenly changed “There have been cases where auditors quality products. Built into our free mar- that has caused them to go from a very suc- make mistakes, or the client has gotten into ket are the standard ethical canons, mainly, cessful, profitable company to one that has a gray area where the rules are not precisely ‘Do unto others what you would want filed for bankruptcy protection?” black and white, and they get themselves them to do unto you,’ which also drives so As the story continues to unfold, on that line that, with hindsight, turned much social and commercial interaction.” Zimmerman predicts lawmakers and regu- out to be the wrong side of the line to be The massive scope of the Enron col- lators will react to immediate concerns that on, which made it appear after the fact that lapse deserves an in-depth look, within the do not get at the heart of the problem. the auditor wasn’t tough enough.” context of the company’s goals, the econo- “Politicians love to pass laws aimed at right- What happened between Enron and my’s recent slump, the role of the Sept. 11 ing perceived problems.” Already, Arthur Andersen remains to be seen. terrorist attacks on consumer confidence Washington is talking about barring “It will probably be several years before and energy prices, he says. Sometimes accounting firms from providing consulting the full record is available from both par- things just go wrong. and auditing services to the same client, ties,” Zimmerman offers. “At that time “A lot of what appear in hindsight as mandating rotation of auditors, and chang- somebody will sit down and write a fairly

BUSINESS 2001 Winter ‘audit failures,’ ” Zimmerman explains, “are ing accounting rules. Investor-oriented objective history, taking into account all of in fact legitimate business risks that turned changes are ahead, too, he believes—for the information, and we’ll have a much out badly because of unexpected events, example, rules that forbid individuals from better understanding.” SB SIMON such as Sept. 11. Our litigious environ- having more than a certain percentage of 30 $ WILLIAM E. SIMON GRADUATE SCHOOL OF BUSINESS ADMINISTRATION EXECUTIVE ADVISORY COMMITTEE

J. Peter Simon, Chairman

William Balderston III George J. Gillespie III, Esq. Harry Keefe Leonard Schutzman ’69 M.B.A. Charles L. Bartlett James S. Gleason ’68 M.B.A.* Henry A. Kissinger George J. Sella Jr. J. P. Bolduc Robert B. Goergen William W. Lanigan, Esq. Marilyn R. Seymann Paul A. Brands ’66 M.B.A. Paul S. Goldner ’79 M.B.A. Donald D. Lennox William E. Simon Jr., Esq. David J. Burns ’78 M.B.A. Bruce M. Greenwald ’69 M.B.A. Jane Maas Joel M. Stern Andrew M. Carter Mark B. Grier ’80 M.B.A. Paul W. MacAvoy Sir John M. Templeton Richard G. Couch ’79 M.B.A.* General Alexander M. Haig Jr. Louis L. Massaro ’80 M.B.A. Ralph R. Whitney Jr. ’73 M.B.A.* Frank G. Creamer Jr. ’70 M.B.A. Larry D. Horner J. Richard Munro Joseph T. Willett ’75 M.B.A. John L. Davies ’73 M.B.A. Michael S. Joyce James Piereson Ronald H. Fielding ’76 M.B.A. David T. Kearns Robert E. Rich Jr. ’69 M.B.A.* Barry W. Florescue ’66 B.S. William M. Kearns Jr. William D. Ryan * Executive M.B.A. graduate

William E. Simon Graduate School of Business Administration Rochester, New York 14627

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