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Sloan School of Management

Research@Sloan

Richard Schmalensee and Donald Lessard

When the MIT Sloan School of Management was founded in 1952 (as the School of Industrial Management), it was with the intention of changing the way management was done.

The foundation for this bold ambition was the belief that important management problems could be solved by the rigorous and creative application of tools from basic academic disciplines, including applied mathematics, economics, psychology, and sociology. This discipline-based and problem-focused approach to management research and education set the Sloan School apart. It also changed the way management was – and is – taught and practiced. This approach remains one of Sloan's greatest contributions to the business world.

Since those formative years, Sloan research has been a continuing source of innovation that has advanced both theory and practice.

Today, Sloan research continues to shape how the world teaches, understands, and practices management. Increasingly, our work builds on MIT's distinct intellectual excellence and entrepreneurial culture. Sloan's research excellence is widely recognized. The major ranking of business schools with an explicit focus on research, the Financial Times survey, ranked MIT Sloan first in research in 2000 and second in 2001, against schools with faculty two and three times its size, and individual faculty regularly garner top awards in disciplinary and professional arenas. Recent research awards include:

A sampling of the most recent Sloan working papers (published by the Social Science Research Network (SSRN) in the MIT Sloan School Research Abstracts Journal (http://www.ssrn.com/link/MIT-Sloan-School.html) shows a breadth of topics and approaches:

Given the range of disciplines and topics involved, there is no simple way to characterize research at Sloan. A useful first cut, though, is along three dimensions. These are:

1) Broad disciplinary areas around which the faculty is organized – behavioral and policy sciences, economics/finance/accounting, and management sciences,

2) Management topics addressed – including innovation and new product development, strategic organization, asset markets and international linkages, entrepreneurship, digital business models, the interaction of informational technology and organization structure and performance, impacts of accounting information, and the changing relationship between work and family, and

3) Centers in which researchers collaborate – many of which involve colleagues from across the Institute, including the Operations Research Center, the Center for Energy and Environmental Policy Research, the Joint Project on Global Change, the Center for eBusiness, the Center for Information Systems Research, the Laboratory of Financial Engineering, the Center for Coordination Science, and the Institute for Work and Employment Relations, among others.

Much of Sloan's research addresses current management issues while drawing on and deepening fundamental knowledge. The "Virtual Customer" initiative, for example, has the potential to transform product development by engaging customers directly in the design process over the Internet through the use of sophisticated algorithms that allow designers to elicit consumer preferences efficiently. Similarly, research by the accounting group on the impact of analysts' rating of underwriting and other potential conflicts predates the current public focus on this topic and brings informed opinion to the debate. A significant portion of Sloan research, though, is motivated directly by fundamental puzzles in the various disciplines. An interesting example is recent work by Simon Johnson showing that social institutions in developing nations have importantly affected development success and that the nature of these institutions can, in turn, be explained to an important extent by settler mortality rates in early colonial times.

According to a recent faculty survey, the greatest obstacle to research at Sloan is the scarcity of blocks of time that can be dedicated to research. This reflects the intensity of teaching in Sloan's broad array of programs: the second-largest undergraduate major at MIT, a substantial MBA program that accounts for about half our teaching, the LFM and SDM programs with Engineering, two degreed executive programs, and a PhD program.

Sloan faculty, on average, teach many more students than others at MIT. Efforts are currently underway to reduce the number of subject preparations per faculty member to permit most to concentrate teaching in a single semester, and to build stronger links between research and education. Funding also remains a challenge. Sloan obtains about $10 million per year in sponsored research, with roughly 80 percent coming from corporations. While the sponsored research level per faculty member (about $100,000) is low by MIT standards, it is well above that at any other major business school. (Most of our competitors can support essentially all research with School funds.) This level of corporate support requires considerable faculty involvement in sponsor relations, but it does have the benefit of requiring that researchers focus on practical impact as well as fundamental understanding, as "mens et manus" directs.

A major gift from an alumnus and his wife will enable us to take a large step toward addressing these challenges. It will provide research funding to a group of senior and junior faculty working at the intersection of strategy and organizational design, as well as providing these faculty with the time to collaborate, beginning with "listening in" on each others' courses. It will also support greater engagement by students in the research process and quicker, more effective incorporation of research results into courseware. We hope and expect to launch similarly focused efforts in other strategic areas.

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