SEPTEMBER/OCTOBER 2002 Sir Adrian Cadbury: Putting Trust in People The New Psychology of Leadership Corporate Social Responsibility: When All the World’s a Stakeholder ContBiezEdnts 32 SEPTEMBER/OCTOBER 2002 64 36 DEPARTMENTS FEATURES 4 From the Editors 20 The Human Side 36 Taking Responsibility of Business Courses in social responsibility are 6 Letters Governance guru Sir Adrian teaching students to care about the 8 Headlines Cadbury focuses on those who world as much as they care about gather in the boardroom—and in making a profit. 50 Technology the classroom. Analyze This 54 Bookshelf 42 26 The Mind of a Leader Student analysts investigate and 56 Calendar The concept of leadership is evaluate the stock potential of real- changing to one of collaboration world companies—and they’re 58 Your Turn and delegation, and business outperforming some of the Classifieds schools are redesigning their own professionals on Wall Street. 60 programs to reflect this new ideal. 64 Spotlight 46 A World of Opportunity 32 Is Exec Ed Facing AACSB’s new board chair Jerry Extinction? Trapnell believes the association will If business schools don’t adapt meet the challenge of globalization to the changing corporate by reaching out to schools and environment, traditional executive organizations worldwide. Cover photo by Nigel Haverly, educa tion could go the way of courtesy of the Aston University the dinosaur. BizEd SEPTEMBER/OCTOBER 2002 1 Fromthe Editors Leaders in the Classroom I’ve been a writer all my life. While I remember learning grammar and punctuation rules, I don’t remember learning some of the other basic skills—how to organize an article so it flows smoothly from start to finish, when to use a modifier and when to leave the word stark, how to convey moods and emotions through simple sentences. Although I received a degree in journalism, I’ve always wondered if it’s really possi- ble to teach the skill of writing. A professor can pass along the rules about answering the five key questions in the lead paragraph, but how can he teach his students style? That’s how I used to feel about leadership. Doesn’t the will to step forward and run a company, redirect its initiatives, and take it to a higher level have to be innate? Therefore, how can a business school instill in its students a desire to break from the ordi- nary and become truly accomplished leaders? The explanation is twofold. First, students and executives enrolled in business school have already discovered in themselves a pas- sion for leadership. It is because they want to raise their skills to the next level that they’ve signed up for business school in the first place. For them, learning the intricacies of accounting and organizational behavior are akin to a budding writer learning where to place a semicolon—it’s an important skill, but it’s just refining the talent that already exists. Second, and more important, educators are proving that leadership can be taught, because critical thinking and decision making are skills that can be developed. And in today’s complex and fragmented business world, everybody needs those skills. Both businesses and business schools are begin- ning to realize that very few individuals can be responsible for all phases of running a company, and that group leadership may be the answer to specific problems. In recent books, leadership experts have noted that true leaders are the ones who step forward and address a problem in the workplace—even if they are junior-level execu- tives without direct organizational power. If anyone can be a leader, then everyone should know how to lead; business schools have to prepare all students for the inevitable time when they will step for- ward and assume leadership. Fortunately, as we see in this issue of BizEd, schools around the world are taking up the challenge of teaching leader- ship, offering concentrations, majors, and centers dedicated to the concept. Today’s students are learning more than the equiv- alent of placing a comma; they’re learning how to write the whole text on leadership. Iz BILL BASCOM 4 BizEd SEPTEMEBER/OCTOBER 2002 Letters A New Favorite geous salaries paid to business facul- Financial Times named our school ty. For this alone I am most grateful. first in IT among all MBA programs. I was somewhat skeptical when I received BizEd truly reflects the issues and Linda McCrerey the first issue of BizEd. Like most challenges we face. Each issue gets Communications Officer other deans, I have to read a lot of better, and the magazine is now part Graduate School of Management material, and I wondered if this new of my “must read” list. I encourage University of California, Irvine magazine would be worth my time. you to keep exploring our environ- After reading the interview with ment and improving your product. All About Enron Peter Drucker, I decided to take David K. Long the magazine home. My conclusion: Dean, College of Business I read Jan Barton’s “Your Turn” in the May/ Reading BizEd is time well spent. Bloomsburg University June issue of BizEd. He said that he Each succeeding issue has provided Bloomsburg, Pennsylvania will not use the Enron development interesting, provocative reading, and in his class because he wants to has been timely, with articles that Technological Focus avoid teaching “fads” and stick to were well-written, focused, and basics. Since Professor Barton is worth the effort and time to digest. In the Technology column of the May/June a recent Ph.D. graduate of the After reading the article “Meet issue, you ran an item called “UCSD University of Alabama, of whom we Joe Dean” in the May/June issue, Offers IT Entrepreneurs Lessons in are most proud, I write this article I decided to share future issues with Management.” The piece refers to in hopes of influencing him and my department chairperson and my a San Diego Union-Tribune article other bright young professors. provost. (I ordered copies for each that quotes Peter Use Enron. Use WorldCom. of them.) The Cowhey talking Use Xerox. Use whatever examples response has been about UC-San of accounting appear in the news. overwhelmingly Diego’s new These stories catch the attention positive. I’ve actu- management of students. From a teaching stand- ally had chairper- school. He says point, their curiosity and excitement sons and faculty this is the first create an opportunity too good to walk into my office time that tech- pass up. Make accounting interesting and express their nology and to students however you can! opinions about management Enron offers many lessons. No various articles. education has great depth of analysis is needed to One final benefit been the focus talk about: is personal. My wife of a graduate I The audit failure at Enron, the is dean of the School school in breakdown of the wall of independ- of Arts, Humanities, California. ence between the auditor and Enron, and Communications Not true! and the massive consequences that at another institution. Since 1997, resulted when the auditor failed to As you might expect, the UC- do its job. she considers us busi- Irvine I The proper role of the audit ness folks to be “infi- Graduate School of Man - committee and the board of direc- dels.” I started sharing each issue agement has had an Infor ma tion tors. Enron is an example of what with her. The magazine has actually Technology for Management happens when these governance piqued her interest and given her focus. We have many classes with mechanisms fail. a different perspective about the an ITM emphasis, including the I Earnings and stock prices, unique issues and problems facing Lincoln Mercury ITM Lab in Mar - the incentives of managers to collegiate business educators. Our keting. This year we were named to “manage” earnings as they did at discussions no longer begin and end Computerworld magazine’s list of Enron, corporate ethics and trust, with comments about the outra- Top 25 Techno-MBA Schools, and and problems that result when the 6 BizEd SEPTEMBER/OCTOBER 2002 The Fall 2002 Executive Education & MBA Directory Reach 5.2 million* readers worldwide in the October 21 issue of BusinessWeek featuring the high profile special editorial report “The Best B-Schools.” Don’t miss this opportunity to promote upcoming programs in this special ad directory which is widely read and generates strong response. To learn more about targeted advertising opportunities, contact: Telephone: 1-800-424-3090 (within North America) Fax: 1-312-464-0512 (within North America) E-mail: [email protected] (All inquiries) Issue Date: October 21, 2002 Closing Date: September 6, 2002 Closing soon. Reserve Space Now! *2002 Spring MRI; BusinessWeek estimate for International. investors feel that the corporate the analysis was wrong because the just to yourself, but to all the officers have broken the trust. financial statements were fraudu- stakeholders in this decision. I think I How executive compensation lent? Doesn’t financial statement the incremental time you invest in incentives are used to meet earnings analysis only work if the information preparing for a classroom discussion targets—the role of stock options, provided is reliable? of Enron or WorldCom will have a and how stock options are accounted My last observation concerns huge payoff. for on the financial statements. Professor Barton’s comment that, William D. Samson I “Off-balance-sheet financing”— because he was “writing research, Roddy-Garner Professor of Accounting what it is and why it was important presenting at conferences, and University of Alabama to Enron. teaching,” he could ill-afford the Tuscaloosa, Alabama Enron serves as a useful spring- time it would take to rewrite a board to these important issues, course based on a fad.