MIT Reports to the President 1997-98
SLOAN SCHOOL OF MANAGEMENT
The 1997-98 year marked the completion of Glen Urban's term as dean of the MIT Sloan School of Management and the culmination of Sloan's five-year plan for preeminence initiated in 1994. This report highlights the achievements of that five-year term and, more specifically, the accomplishments of the past year.
During the past five years, the MIT Sloan School:
The progress on the international front is providing new resources for both curriculum development and research. Sloan is responding to a shift in the structure of the executive education market by designing new executive programs based on both traditional in-class and remote learning approaches. Initiatives in pharmaceuticals, the Center for Innovation in Product Development (CIPD) and efforts with engineering in lean autos, aircraft and ships highlighted research in 1997-98.
Sloan restructured with a minimal increase in head count to generate the resources necessary for these programs. A new matrix organization enables Sloan to be more flexible in the face of changing demand and to increase efficiency through the sharing of resources across programs. Staff productivity has increased by more than 25 percent after projected staff growth. In addition, faculty members are using a point-based load measurement system. This new system, along with the increased number of students, has boosted teaching productivity 25 percent after projected faculty growth.
The volume of research directly accounted on Sloan books is projected to decline by $3 million in FY98, due to the phase-out of the Organizational Learning Center plus a drop in income for Center for Information Systems Research, Center for Coordination Science and the 21st Century Organizations program. However, the level of research at Sloan supported by the close ties with other MIT schools, including Lean Aerospace, Lean Sustainment, International Motor Vehicle Program and CIPD, is increasing substantially. Sloan estimates the combined research volume to be at an all-time high.
Sloan's budget remains healthy, given the proposed revisions to the five-year plan. The School has been able to contribute resources to the Institute substantially above the level of the original plan. The five-year profit-sharing experiment has been successful. Sloan has contributed more than $9 million in incremental funds over the FY94-FY98 period through reduction in general funds, profit sharing and new overhead taxes versus $6.9 million in the original plan. Sloan forecasts it will contribute more than $18 million in the plan period FY99-FY2003. These results are expected even after new programs -- executive education and international -- are implemented to respond to increasing business school competition and to meet the attack on faculty from other top schools.
Overall, it has been a very productive year resulting in the implementation of many of the programs proposed in the 1994 five-year plan. In closing the fifth year of my term as dean, I want to thank the Institute leadership for its support, as well as faculty colleagues and staff for contributing to Sloan's success. I now pass the baton to the new dean Richard Schmalensee. Dick worked very closely with me as Deputy Dean, and I know he will provide outstanding leadership for Sloan.
Glen L. Urban
Our mission is to create and deliver a small MBA program based upon collegiality and teamwork, an international focus, and a diversity of cultures and interests. The innovative and integrative curriculum provides a strong analytical foundation to management, encourages the interplay of ideas and their practical application, and allows students to design an individualized educational program exposing them to leading-edge research and practice.
In 1997-98, student enrollment for the MBA program and Leaders for Manufacturing was 717, the largest in Sloan School history. The first-year MBA class had 308 students and included 28 percent female, 8 percent U.S. minority, and 38 percent international, average age of 27.5 years, and average work experience of 4.6 years. Of the students' undergraduate degrees, 48 percent were in engineering, 24 percent in social sciences/humanities, 20 percent in business, and 8 percent in math/science.
The fall of 1997 was the fifth year of the revamped MBA curriculum. Students complete a fall core of six subjects and then choose a specific management or self-managed Track. The newest track, Operations and Manufacturing, awarded its first certificates this year. Additionally, the New Product and Venture Development Track enjoyed skyrocketing enrollment of students interested in entrepreneurship and product marketing. More than two-thirds of graduating MBA students completed a management track. The balance opted for the self-managed track, which provides them with maximum flexibility in course selection and the ability to customize their program following completion of the fall core.
Overall student satisfaction with the MBA Program remained high in 1997: 91 percent of MBA students rated their Sloan experience 7 or higher on a 10-point scale. Some 89.1 percent stated that they would recommend the Sloan MBA Program to potential business school students, up from 85.1 percent last year.
Twenty-seven members, or 8 percent, of the first-year MBA class were from under-represented minority groups. The Class of 1999 includes 13 African-Americans, seven Mexican-Americans, five Puerto-Ricans, and two Native American. They joined 46 second-year minority students. On average the Sloan School provided $10,000 in scholarship support for first year students from underrepresented minority groups.
The Minority Business Club and Minority Student Support Group met regularly during the academic year to discuss minority student issues. Representatives from the MBA Program and Master's Admissions Offices also attended school Diversity Committee meetings and participated in a diversity training day in the fall term.
The MBA Program again subsidized the membership of minority students in the National Black MBA and National Hispanic MBA associations, allowing students to attend national conferences. RÈsumÈ books were developed for both groups and were used at career fairs for these events.
U.S. News and World Report ranked the Sloan MBA Program #3 in the nation in its 1998 annual survey of graduate business schools published in March, up from #4 in 1997. The program's continued high rankings (#2 in 1996, #1 in 1995, and #2 in 1994) are recognition of student selectivity, high graduation rate, career placement success, and academic reputation.
MBA students and faculty participated in five international trips this year. The international trips continue to be an important part of the MBA Program student experience. The trips are initiated by students (itineraries, logistics, and fundraising) and are supported by the MBA Program Office and International Management faculty. Each trip is preceded by a regional academic seminar that examines the relevant management, social, and cultural issues of the countries visited. The trip destinations this year were China, Japan and Korea; Venezuela and Columbia; Australia and New Zealand; and Vietnam and Thailand. Some 250 MBA students participated.
LEADERS FOR MANUFACTURING
The Leaders for Manufacturing Program (LFM) is a partnership between MIT and 20 U.S. manufacturing firms to discover and translate into teaching and practice principles that produce world-class manufacturing and manufacturing leaders. LFM supports students both as fellows in the program and as research assistants throughout the Institute. Both groups of students participate in a research program that is directed by a joint faculty-industry committee.
The largest component of the educational efforts is the Fellows Program, a 24-month dual-masters degree (engineering and management) program involving a single integrative research project carried out on site in partner firms. Of the 48 students who graduated in 1998, 90 percent took positions in manufacturing firms, and 30 students accepted positions with LFM sponsors. AlliedSignal, Qualcomm, and Dell were notable for a large number of hires. Industry continues to show strong support for hiring LFM graduates. The class of 1999 is comprised of 42 students; the class of 2000 had 48. This year marks the 10th year of operation for LFM.
Each of the 48 graduates completed a six-month internship at a partner company. These internships have provided significant economic benefit to partner companies. They also have increased faculty involvement in current industrial problems and have had an impact on both MIT on-campus research and classroom teaching.
LFM has worked with the Deans of the Management and Engineering schools to create a position of Director of Leadership for the Sloan School and LFM. A search process to fill the position is under way. This person will integrate and coordinate the various aspects of LFM's leadership curriculum, and will work to expand the leadership offerings for the Sloan School as a whole.
Research has been conducted with seed funding from LFM in diverse areas. The Organizational Change group, for example, has focused on the real value of LFM to companies and how LFM helps its partners to change.
Another initiative, the Next Generation Manufacturing (NGM) project, has sought to address LFM's mission of discovering the principles for world-class manufacturing in the future. This past year LFM partner companies committed funds to continue the project and have adopted NGM's framework as the guide against which the curriculum and research of LFM be mapped.
LFM is collaborating with Stanford's SIMA program on a project on remote diagnostics. Partner companies have strongly supported such joint research.
LFM has added Celestica as an internship partner of the program. Chrysler Corporation will not continue as an active partner this coming year. Students this year also took a number of internships in foreign countries as part of LFM's efforts to reflect the global nature of its member companies.
LFM continues its efforts to extend the educational experience to other audiences in our partner companies beyond the Fellows. A six-day Industry Leaders Course on Product Development was held at MIT for 40 partner company personnel with sessions spread over a two-month period.
The National Coalition for Manufacturing Leadership (NCML), a partnership of 14 universities with joint management and engineering programs founded by LFM, hosted a joint recruiting forum at the University of Michigan.
LFM is collaborating more with other groups at MIT with similar missions. LFM now reports with six other programs to a Dean of Engineering Systems. LFM is working closely with the Systems Design and Management Program, sharing class offerings and support staff with them.
LFM'S goals for the coming year include:
More information about this department can be found on the World Wide Web at the following URL: http://web.mit.edu/lfm/www/
Stephen C. Graves, William C. Hanson, David E. Hardt
Sloan's Office of Executive Education has continued its efforts to provide superior programs to key partner companies and alumni of executive education, drawing on Sloan's research depth and expertise to help managers and executives solve important business problems. The office achieved the following results in 1997-98:
Both the Management of Technology and Sloan Fellows Programs -- which fall under the purview of Executive Education -- successfully recruited large classes for 1998-99, indicating continuing strong demand for these mid-career management degrees. (See separate reports that follow.)
Six executive short courses were successfully presented in May and June -- The Chief Network Officer: Managing the IT Infrastructure; Negotiation: Theory & Practice; Management of Change in Complex Organizations; Corporate Strategy; System Dynamics: Modeling for Organizational Learning; and Product Design, Development and Management.
Responding to market demand for more customized programs, Sloan increased its offerings of executive education programs for individual companies. For the third time, the School offered an innovative "change agent" program to Siemens Nixdorf.
We have reaffirmed our commitment to maintaining and expanding our research base as a means of adding value to our educational programs.
More information about this program can be found on the World Wide Web at the following URL:
Susan C. Lowance
MANAGEMENT OF TECHNOLOGY PROGRAM
The MIT Management of Technology (MOT) Program, the first joint program between the Sloan School and the School of Engineering, was established in 1981 to develop leaders who will create the linkages between their organization's underlying technology and its overall strategy. The program grants the special degree SM in Management of Technology.
The MOT Class of 1998, with 56 participants, was the largest to date. As in previous years, the average age was 35, and average post-university work experience was 10 years. Some 55 percent of the participants were international, representing 21 countries, and 85 percent were sponsored by their organizations. Before entering the MOT Program, 30 percent had earned master's degrees, and 16 percent PhD's.
For the annual MOT international trip, the class of 1998 met with government and industry leaders in Latin America, including Chile, Argentina and Brazil. In Argentina, the parents of one of the MOT's hosted the entire class at their ranch for a wonderful day's respite.
The MOT Program has begun to attract greater attention in the outside world. It has achieved and maintained its target enrollment of 50-55 students. In addition, our Web site continues to provide good marketing for the program, now having received more than 55,000 visitors.
Our primary goal for the coming year is to strengthen our relationships with U.S. sponsoring organizations in order to expand our already-strong applicant pool.
More information about this program can be found on the World Wide Web at the following URL: http://web.mit.edu/mot/
The MIT Sloan Fellows Program entered the 1997-98 academic year again with one of the largest classes over the 67 year life of the program.
The program strives to provide a learning community that reflects the international character of organizations today and to select participants with the highest potential for leadership roles. The 1998 class comprised 57 participants, all sponsored by their employers, of which 50 percent were U.S.-based organizations and 50 percent were international. This balance was achieved in the face of increased demand for places by Latin American companies, continued demand by Asian companies, and strengthening demand by U.S. companies. Participation by women and U.S. minorities, however, remained low, at 15 percent.
The teaching quality, as ranked by the participants, received the highest praise. Graduates were offered the option of choosing between the degree designations MBA or MS in Management. The majority elected the MBA. The thesis remains a degree requirement for Sloan Fellows.
The program will continue to cultivate a dynamic and balanced U.S./international learning community that cultivates effective leadership to meet the fast-changing demands of today's economic environment. Efforts will continue to increase participation by women and minorities.
Susan C. Lowance
Sloan's Doctoral Program aims to provide institutions in the United States and abroad with outstanding management faculty and researchers.
On the input side, we experienced another record year. We received 479 applications from 48 countries, fully a quarter of them from China. We made 24 offers and got 15 acceptances (a yield of 63 percent, better than in past years). Total enrollment now stands at 87. The number of women in the Doctoral Program remains at 24.
On the output side, our total number of graduates for the past academic year was 21. Job successes and placements have been quite good in all 10 of our management fields. Recent graduates have found positions at Columbia, Northwestern, Cornell, the Univ. of Michigan, INSEAD, Kobe University, the National University of Singapore, INCAE-Costa Rica and the London School of Economics. Compared to last year, no graduates chose industrial careers this season.
While the number of under-represented minority students (and applicants) remains small, currently three active students. However, we take quiet pride in graduating a Ph.D. student of Hispanic American heritage who was placed in one of the top schools of the country. We also brought into the program a new student from Puerto Rico (supported in part by the General Electric Faculty for the Future project). To increase the participation of minority students in Ph.D. studies, we have continued initiatives begun last year to increase our diversity including participating in the KPMG Peat Marwick PhD Project (an annual recruitment event).
SLOAN VISITING FELLOWS PROGRAM
The MIT Sloan Visiting Fellows Program provides the opportunity to pursue full-time, non-degree studies tailored to individual goals and interests. Each Visiting Fellow's program of study, usually for one or two semesters, is designed in consultation with a faculty adviser to meet individual professional needs and interests.
Originally a small program with about four to six participants a semester, the program has steadily increased to more than double that number. Thirteen participants were enrolled for fall 1997 and 12 for spring 1998.
The 1997-98 academic year included self-sponsored and company-sponsored participants as well as Fulbright Scholars and visiting students from Linkoping University and the Norwegian Technological University. Graduates of the Management of Technology (MOT) Program continue regular participation in the Visiting Fellows Program as a second semester or year of sponsored study.
Regular sponsors of participants included Schlumberger and Sanwa Bank. Sinclair S.A. and McKinsey & Co. each sponsored participants as well.
More information about this program can be found on the World Wide Web at the following URL: http://web.mit.edu/
SYSTEM DESIGN AND MANAGEMENT PROGRAM
See the listing under School of Engineering
UNDERGRADUATE PROGRAM IN MANAGEMENT SCIENCE
During the 1997-98 school year, the recent rapid growth of the undergraduate program began to level off. We began a series of curricular and extra-curricular enhancements to the program. Seventy-six seniors majoring in management science graduated, our highest number of graduates in several decades. Of those 76 seniors, 38 chose an option in finance, 24 selected information technologies, 14 chose marketing research, four went into operations research, and two went into behavioral science. Two had double options in finance and information technologies, one had a double option in finance and marketing, and one in information technologies and marketing.
Fourteen of our graduates received simultaneous SB degrees. Six also received SB degrees from the Department of Electrical Engineering and Computer Science and one each from the Departments of Economics, Chemical Engineering, and Mathematics. One received additional SB degrees from both the Department of Economics and the Department of Electrical Engineering and Computer Science.
At a post commencement reception, the School recognized Nori Nadzri and Jamie Buller, June 1998 graduates, with the Sloan School of Management Senior Prize. Awarded to outstanding seniors majoring in Management Science, this annual prize honors students who achieved high scholastic standing and demonstrated leadership and professional promise.
As of the Registrar's fifth week count this spring, 167 students were enrolled in the Management Science SB Program. Four additional students joined the program after the fifth week. Some 42 students were enrolled in Management Science as their second SB degree program at MIT. The total spring undergraduate enrollment was 213, up only one from spring 1997.
Enrollment in the undergraduate program has almost doubled since spring 1994, when total enrollment was 110. The program is now the fifth largest undergraduate program at MIT, larger than most of the departments in the School of Engineering, and larger than all but the biology department in the School of Science.
A large number of students from other MIT degree programs continue to enroll in management subjects. In the 1997-98 academic year, there were 804 undergraduate enrollments in Sloan School subjects (the same number as the year before). This represents the equivalent of 101 full-time students. The number of Spring enrollments was 473, which represents 193 virtual Sloan undergraduates in addition to our 213 actual undergraduates. We are computing "virtual" undergraduates by dividing the number of Full-time Equivalents by 60 percent, the approximate portion of an MIT upperclass consisting of departmental subjects.
A new curricular initiative planned for 1998-99, and piloted in February 1998, includes two significant changes to the subject 15.279 "Management Communications for Undergraduates." The subject is now a requirement, making Sloan the first MIT undergraduate department to require oral as well as written communication skills in its curriculum. This subject will also include a front-end orientation to the Sloan School and to managerial pedagogy. Extra-curricular enhancements planned for next year also include a speaker series for undergraduates.
Increased Student Satisfaction
The '97-'98 Undergraduate Program satisfaction survey showed increases in overall satisfaction to 7.8, up from 7.1 on a scale from 0 to 10. Students rated faculty advisers 6.2, up from 5.8; the Undergraduate Program Office 7.8, up from 7.4; Educational Services 6.5, up from 6.3; and the bidding system 6.3, up from 6.1. Some 93 percent of the students -- up from 71 percent last year -- rated their overall satisfaction as 7 or higher. The question, "Would you recommend Course 15 to freshman?" also received a higher positive response this year (8.9) than it did last year (8.1). Satisfaction with teaching, faculty expertise, relevance, innovativeness, and facilities decreased slightly.
During January 1998 Sloan offered a number of IAP activities: The Foreign Currency Exchange Bourse Game, given for the eleventh year in conjunction with Citibank, was coordinated by Professor Jiang Wang and the Educational Services Office. Three entrepreneurial subjects were offered. Senior Lecturer Russell Olive offered "Personal Entrepreneurial Career Strategy and Preliminary Venture Analysis." Visiting Lecturer Barry Unger offered "Starting and Running a High-Tech Company." Visiting Lecturer Joseph Hadzima presented "The Nuts and Bolts of Business Plans." Professors John Little and Dimitris Bertsimas presented a series on "What is Management Science? What is Operations Research?" Professor Charlie Fine coordinated a lecture on "Business Ethics in the Talmud," and Professor John Sterman led a series of sessions on "System Dynamics and the Future."
Sloan Undergraduate Advising and Committee Assignments
Faculty who served as undergraduate advisers included Professors Thomas J. Allen, Dimitris J. Bertsimas, John S. Carroll, Chyrsanthos Dellarocas, Stephen C. Graves, Denis Gromb, Leigh Hafrey, Neal Hartman, John D. C. Little, Stuart E. Madnick, Michael Mikhail, J.D. Nyhart, Jim Orlin, William J. Qualls, Maureen A. Scully, Scott Stern, Marcie Tyre, John Van Maanen, and Roy E. Welsch. Advisers also included Sloan Administrators Jeffrey A. Meldman, Director of Undergraduate Programs; Heather M. Madnick, Assistant Director Undergraduate Programs and Assistant Director of Educational Services; and Debbie H. Shoap, Associate Director, Sloan Educational Services Department. Professor Carroll continued as departmental coordinator of MIT's Undergraduate Research Opportunities Program (UROP) and Professor Hartman as departmental writing coordinator for Phase Two of the Institute Writing Requirement. Meldman served as chair of the Undergraduate Advisors Committee. He and Ms. Madnick were IAP Co-Coordinators. Ms. Madnick currently serves on the IAP Automatic Registration Committee and was elected Co-Chair of the MIT Undergraduate Administrators Round Table.
Faculty serving on the Undergraduate and Interdepartmental Policy Committee included Professors T. Allen, S. Graves, D. Gromb, S. Madnick, together with Dean Jeffrey A. Barks, Meldman, and Heather Madnick. Professor J. Carroll served ex officio and Professor J. Little chaired the committee.
MIT Undergraduate Advising
Lori Breslow, Neal Hartman, Steve Graves, and JoAnne Yates contributed to undergraduate education at the Institute by advising freshmen and conducting Freshman Advisor Seminars.
Heather Madnick, Jeff Meldman
CENTER FOR COORDINATION SCIENCE
The MIT Center for Coordination Science conducts multidisciplinary research to help understand how information technology can provide new ways of organizing human activity and help people work together better. Primary funding comes from a variety of government sources, including ARPA, NSF, and the Defense Logistics Agency. The center has corporate sponsorship from Fuji Xerox and is open to sponsors from the 21st Century Initiative listed below.
The past year has brought significant progress on the center's main project, the Process Handbook, a set of tools for inventing organizations that joins both coordination theory and coordination technology. The center developed a major reimplementation of the software, more than doubled the number of processes and activities represented in the database (now over 4500), and made a restricted version of the Process Handbook available to the public over the Internet.
Other activities included hosting a sponsor workshop and the publication of several working papers on a range of topics, among them measures of the value of information technology, and software tools to support exception handling. We also hosted a visiting scientist from Fuji Xerox.
In the coming year, we plan to continue developing the Process Handbook software and content. Two specific foci of attention are: (1) exploiting the concepts of coordination and dependencies in the Handbook, and (2) developing software tools for exception handling. We also plan further research and activities in electronic commerce and virtual organizations.
More information about this center can be found on the World Wide Web at the following URL: http://ccs.mit.edu
Thomas W. Malone
CENTER FOR ENERGY AND ENVIRONMENTAL POLICY RESEARCH
The Center for Energy and Environmental Policy Research (CEEPR) has been the locus of research at MIT on energy economics since the mid-1970s and environmental economics since the late 1980s. CEEPR is jointly sponsored at MIT by the Sloan School, the Department of Economics, and the Energy Laboratory. CEEPR receives financial support from corporate sponsors and government agencies in the United States and Norway. In conjunction with MIT's Center for Global Change Science, CEEPR co-sponsors the Joint Program on the Science and Policy of Global Change, which conducts interdisciplinary research to influence global climate policy.
A total of 18 Joint Program Reports were disseminated, and 12 earlier reports were published in various peer-reviewed journals. The most prominent of these, from a policy standpoint, was an article in Foreign Affairs, which provided a "report card" on the Kyoto Conference of the Parties. During the same year, CEEPR published a special report, Emissions Trading under the U.S. Acid Rain Program, which summarizes the Center's research over the past two years on this innovative approach to environmental policy. At the same time, 12 working papers and seven reprints were added to CEEPR's publications list.
Both CEEPR and the Joint Program convened workshops of sponsors and other interested parties to present and discuss research results. During the year, CEEPR held its usual fall and spring workshops in Cambridge. The Joint Program held one in the fall in Cambridge and another in London in June in collaboration with the Royal Institute of International Affairs.
The Joint Program's distinctive feature is the integration of streamlined but comprehensive economic, climate, and ecological models in one Integrated Global Systems Model. Output from this model forms the basis of the publications noted above and for frequent informal participation in the supply of analysis and information to the policy process.
CEEPR has become the foremost interpreter of the U.S. Acid Rain Program, a pioneering public policy experiment in the use of tradable emission permits to achieve an environmental goal. An initial two-year funding has been extended for three more years. A major new initiative has just been funded to extend the analysis to CO2 trading.
During the 1997-98 year, CEEPR completed the construction of a comprehensive mine-level data base on U.S. coal output and labor input that will provide new insights into the micro-phenomena underlying aggregate industry productivity improvement. Work has begun, in conjunction with the Norwegian Petroleum Directorate, to extend the analysis to oil production from the North Sea.
A. Denny Ellerman
CENTER FOR INFORMATION SYSTEMS RESEARCH
Established in 1974, the Center for Information Systems Research (CISR) investigates critical issues concerning the management and use of information technology in complex and dynamic organizations. Faculty associated with the center have conducted pioneering research in such areas as decision support systems, critical success factors, database systems, strategic IS planning, end user computing, executive support systems, and coordination technology.
In 1997-98, CISR research was summarized in two new working papers, a column in Harvard Business Review, and a white paper. CISR staff also presented research findings at the International Conference on Information Systems (ICIS), the annual meeting of the Society for Information Management (SIM) and three of its chapter meetings, and at seminars at the University of Minnesota, London Business School, and Nomura Management School. Staff are focusing on four key issues in IT management:
In addition to teaching in several Sloan graduate and executive education programs, CISR staff conducted an executive education course, Managing the IT Infrastructure for Global Competitiveness, in May for 40 IT professionals. In June, CISR held its annual Summer Session for 130 information technology professionals from all over the world. During the year, CISR staff designed and delivered management education programs for IT professionals at Pfizer, TRW, and GE Capital. CISR held one-day workshops on both knowledge management and enterprise resource planning systems for sponsors and research participants.
CISR research staff visited sponsor companies to discuss current research and to learn about their IT management issues. They participated in several IT education initiatives at sponsor firms. CISR research staff joined the editorial board of MIS Quarterly and served as reviewers for Sloan Management Review, MIS Quarterly, Information Systems Research, and ICIS. In October, a case study developed at CISR with The Travelers Property and Casualty Company was awarded third place in the Society for Information Management's best paper competition. Additional information about CISR is available at its Web site: http://web.mit.edu/cisr/www
INTERNATIONAL CENTER FOR RESEARCH ON THE MANAGEMENT OF TECHNOLOGY
ICRMOT offers a program of research on technology management, and the relationships among technology processes and marketing, production, and global business strategies. The work is supported mainly by large technology-based companies that are facing the demands of complex and dispersed technology management, often on a global scale. Member companies help select projects for funding and participate in Center workshops.
Current research topics include using technology alliances to establish leadership in emerging technologies; knowledge management in cross-functional teams for product development; understanding the management of virtual work in dispersed organizations; metrics for valuing R&D; the role of technology in commoditized markets; lean transitions from engineering to production; and rapid software development techniques. In 1997-1998, research funds contributed to the support of seven members of the MIT faculty and five Ph.D. students, and also engaged a variety of students in master's programs in related thesis work. In the past year, 14 working papers were issued. Several have appeared in refereed journals including one that has appeared in a management review published by the Financial Times of London.
The Center continues to expand its efforts to strengthen the flow of knowledge to member corporations. Members are encouraged to help set research priorities, and serve as sites for MIT research projects to ensure that the research is directly applicable to their concerns. On-campus seminars were made available to member companies, beginning with an April 1998 presentation on the challenges posed by global atmospheric change to public policy and technology development. The presentation by Professor Mario Molina, Nobel Laureate for Chemistry in 1995, was viewed at member sites in the U.S. and Europe. A program of small, interactive workshops at MIT and elsewhere was expanded. In 1998-99, two workshops will be held in Europe, a third event in Japan in December, and two workshops at MIT.
INVENTING THE ORGANIZATIONS OF THE 21ST CENTURY
Inventing the Organizations of the 21st Century is a four-year-old research and education initiative that works with innovative managers, leaders, and academicians to help them invent the organizations that will become common 10 to 20 years from now.
In 1997-98, the initiative held one major meeting with sponsors -- a research review meeting that presented sponsors with a broad range of research results. We also completed a significant restructuring of the initiative to provide a more decentralized framework for sponsor participation. In the new structure, corporate sponsors pick from a "menu" of research projects and other activities related to the themes of the initiative.
Other activities included the hosting of scenario workshop for one sponsor (British Telecom) and the publication of several working papers on learning histories, multipoint learning, and workers "guilds."
More information about this program can be found on the World Wide Web at the following URL: http://ccs.mit.edu/21c/
Thomas W. Malone
LABORATORY FOR FINANCIAL ENGINEERING
The focus of the Laboratory for Financial Engineering is the quantitative analysis of financial markets using mathematical, statistical, and computational models. The LFE's goals are to spur advances in financial engineering and computational finance, and develop better ways to teach students and executives how to apply financial technology in corporate settings.
In the past year, LFE continued making progress on several existing projects and launched additional projects. Existing projects include the Derivatives Project, the Artificial Markets Project, the Risk Management Project, the Trading Technology Project, the Trading Volume Project, and the Financial Visualization Project. These projects and their corresponding preprints and reprints, along with LFE staff and affiliated faculty, are described in more detail at the LFE's web site.
New projects launched this year include the Derivatives SourceBook Project (a searchable web-based taxonomic bibliography of the derivatives literature), the Risk Preferences Project (an attempt to quantify individual and corporate preferences for risk and expected return using original survey data), and the Evolutionary Dynamics Project (computer simulations of the interaction between natural selection, competition, and innovation of economic agents).
The LFE's activities are supported through industry grants and private donations. This past year we matriculated the first two Merrill Lynch Fellows through the Operations Research Center. We continue to make progress towards a major gift from Merrill Lynch to support a variety of activities across the Institute. Lehman Brothers agreed to join the LFE as a sponsor of the Risk Preferences Project.
The Track in Financial Engineering, a part of the Sloan MBA curriculum, continues to be partially supported by the LFE and has been given more resources by the Sloan Dean's Office. Professor Greg Willard, a new assistant professor, has joined the TFE and is responsible for organizing the Proseminar in Financial Engineering.
The LFE continues to struggle with course development for the Trading Lab because of limited resources to fund this activity. Several trading simulations have been developed for the Analytics of Financial Engineering course (15.450). Research projects are also being developed related to the Trading Lab (such as the Artificial Markets Project described above). The Trading Lab has considerably more potential from both research and teaching perspectives if resources can be raised to support it to the same extent that other universities support similar activities.
More information about this program can be found on the World Wide Web at the following URL: http://web.mit.edu/lfe/www/
MIT ENTREPRENEURSHIP CENTER
The mission of the MIT Entrepreneurship Center is to train and develop the leaders who will make high-tech ventures successful. To that end, we offer educational programs to inspire, educate, and coach new generations of entrepreneurs from all parts of MIT. To support this mission, MIT's Entrepreneurship professors and staff teach and conduct basic research to enhance our fundamental understanding of the dynamic process of high-tech venture development in the United States and around the world.
The MIT Entrepreneurship Center was launched as an Institute-wide initiative in 1996. At that time, President Vest said, "We must not only be the best, we must serve as a model for others and ensure that, together, we all make a significant global impact in this vital field." To achieve these objectives set out by the President, we established two practical goals: to recruit 10 leading professors and practitioners, and to raise $60 million in endowment to fund teaching and research.
In 1997-98, while making progress toward those two goals, we worked in parallel with our current core team to meet the rapidly rising demand for entrepreneurship courses consistent with our mission. Student enrollment in Entrepreneurship courses increased from 327 to 926:
Independent Activities Period
We recruited a new tenure-track faculty member, Professor Simon Johnson, who teaches "Entrepreneurship Without Borders," a class focusing on global entrepreneurship and the international issues facing high-tech ventures. We also hired Matthew Utterback as our first full-time Program Manager. A Research Committee was established to evaluate proposals and support entrepreneurship research. We launched a joint project with the Harvard Business School to study systems supporting new venture creation and success in the United States. The Center received several accolades from the Press: Mass High Tech magazine awarded us the distinction of the Commonwealth's "Education All Star" and Inc. Magazine judged the MIT $50K Entrepreneurship Competition to be "more equal than the others" among university business plan competitions.
On the financial side, endowment pledges from entrepreneurial alumni increased to $16 million toward our goal of $60 million. A corporate sponsors program was established to add to the intellectual life of the School and to support our annual operating budget.
In the coming year, our faculty will develop and teach two new courses -- "Entrepreneurial Marketing" and "Technology Entrepreneurship." The latter is a joint course between Sloan and Mechanical Engineering. Our growth plans include recruiting another senior faculty member in Entrepreneurship and two new practitioners.
Kenneth P. Morse
MIT PROGRAM ON THE PHARMACEUTICAL INDUSTRY
The MIT Program on the Pharmaceutical Industry (POPI) was founded in 1991 as a research and education program for understanding the structure and dynamics of the global pharmaceutical industry -- the firms and their suppliers, customers, and regulators. POPI seeks to improve the industry's performance and reduce the cost of health care by lowering product costs and decreasing the time required to bring new products to patients.
In 1997-98, faculty associated with POPI continued research on case histories of important drugs, the cost of new drug development, the use of combinatorial chemistry to systematize key aspects of drug discovery, and many other topics. A large symposium held in Cambridge in December 1997 examined many of these issues.
Among new collaborations, POPI has entered into a research study with colleagues at the Rand Corporation to examine the future economic impact of patenting biomedical research tools. The new research seeks participation from a number of pharmaceutical and biotechnology firms as well as governmental agencies.
Stan N. Finkelstein
SYSTEM DYNAMICS GROUP
The System Dynamics Group, founded in the early 1960s by Professor Jay W. Forrester, studies complex systems -- often with the aid of computer simulation models -- to learn how their structure influences their behavior. The Group is composed of Sloan School of Management faculty plus graduate students and MIT undergraduates. Inquiries should be directed to Nan Lux, the Program Manager, at <firstname.lastname@example.org>.
The System Dynamics Group has three main areas of research. The National Model Project continues research, under the supervision of Professor Jay W. Forrester, on how the U.S. economy works. The project strives to understand how the U.S. economy works, and analyzes the effects of proposed economic policies.
The second project is "The Improvement Paradox: Designing Sustainable Quality Improvement Programs" directed by Professor John Sterman. This research involves detailed field study with four partner organizations to ground computer models in intensive longitudinal study of quality improvement programs. Designing sustainable quality programs has proven to be difficult, and the evidence linking quality improvement to financial benefits is mixed. Even highly successful quality programs under certain conditions can lead to significant short-run deterioration in financial results and subsequent loss of commitment to the quality program.
Participants in the System Dynamics in Education Project continued writing Road Maps, a series of self-study guides that use modeling exercises and selected literature to teach the methods and principles of system dynamics. The initial nine chapters of Road Maps are now available free on the World Wide Web at http://sysdyn.mit.edu
More information about this organization can be found on the World Wide Web at the following URL: http://web.mit.edu/sdg/www/
Nan S. Lux and John D. Sterman
This has been another highly successful year for Sloan Admissions. The new class was made up of 358 students, including the Leaders for Manufacturing joint Sloan/Engineering candidates. Continuing the trend of the past several years, the class is an experienced one, having an average of 4.5 years of employment before matriculating. The average age was 27.3 years. Average GMAT score rose to 690.
The number of applications to Sloan again rose, to 3,452, reflecting a continued strong interest in the MBA professional degree, bolstered by a strong economy and job market. As business becomes more complex and reaches into sectors that were previously less business-oriented -- such as health care -- we have seen a diversification of applicants to include doctors, lawyers, architects, and other professionals who find themselves in need of sophisticated management skills to complement their professional expertise.
Sloan continues to be a diverse population on all dimensions. The incoming class is 38 percent international, 27 percent women, and 9 percent under-represented minority students. In addition, students have come from all over the United States, from backgrounds in engineering, mathematics, and the sciences, as well as from history, journalism, social science, economics, and business.
Plans for the coming recruitment season include renewed recruiting efforts in Europe as well as a continuation of our presence in Asia, South America, and across the U.S. and Canada. The voluntary participation of current students and alumni/ae in these efforts gives evidence of the satisfaction with our program.
ALUMNI RELATIONS OFFICE
The Sloan Alumni Relations Office's mission is to keep its 16,000 alumni worldwide connected with each other and the School, and to foster goodwill towards Sloan. Specific challenges for FY98 were to expand visibility of the programs and services available; determine alumni perceptions regarding their Sloan education; and implement a new online alumni directory. The alumni relations staff remained at 3, which is 30 percent the size of similar institutions.
In FY98, overall alumni activity and involvement were high. Highlights included nearly 100 alumni events held around the world, involving more than 2,000 alumni. Some 2,000 alumni volunteered to assist Sloan in recruiting, student mentoring, and admissions. Nearly 300 alumni took advantage of the personalized career counseling services. Reunion '98 had nearly 400 participants, a record high, that included a 40th year reunion class. The Sloan Alumni Interactive website continues to be a major conduit for alumni with more than 27,000 visitors to date.
A key issue for Sloan alumni is the availability of an online directory. Since networking is critical to business school alumni, the online directory and other networking services offered through MIT's Alumni Network Services (ANS) are considered "mission-critical" for Sloan. Collaboration with MIT's Alumni Association and ANS will continue to play a critical role for Sloan alumni to address issues of timeliness of database updates, and policies concerning access to alumni information. Success in these areas will be key to Sloan's progress in building its alumni community.
Key challenges for FY99 will be to finally bring online an alumni directory; to continue to increase visibility of the programs and services available to alumni, including the launch of a new Sloan website; expansion of value-added services such as alumni continuing education and distance learning. Significant effort will be made to ensure the integrity of the Sloan alumni database and updating processes.
More information on this office can be found on the World Wide Web at the following URL:http://web.mit.edu/sloanalum/
CAREER DEVELOPMENT OFFICE
The demand for Sloan graduates continued unabated in the past year, though competition is intense among the top schools for positions with prestigious firms. Preliminary placement figures indicate a very strong year, with the median base salary increasing 7 percent over 1998, from $75,000 to $80,000. The average number of job offers increased from 3.2 to 3.4. For the first time this year, the Career Development Office received a higher student satisfaction rating than any of the other offices serving Masters' students.
Though headcount in the Career Development Office has remained essentially flat (6 full-time plus 1.2 FTE), there has been significant expansion in all three of our main areas of business:
The recruiting season was extended by three weeks, from early November into March. More than 200 companies participated in on-campus recruiting. Two special recruiting events took place in the Ting Foyer of the Tang Center: The Consulting Showcase in fall and the High Tech Career Fair in spring. Our marketing activities the previous summer yielded 55 new recruiting companies.
The Career Development Office expanded the recently instituted practice of outsourcing some of the career planning and counseling activities, enabling us to offer a greater number and wider variety of seminars and workshops while maintaining level headcount as mandated.
The Career Resource Center grew dramatically in popularity with students in the past year. The help desk was staffed evenings Monday through Thursday, and a demo workstation was configured nearby for ad hoc tutorials on electronic databases and web searches. The success of the CRC contributed significantly to our improved student satisfaction rating.
For the coming year, we plan to increase our focus on international markets, working with the Admissions Office and Executive Education to combine recruiting efforts and develop a solid employer base in key geographies. We are also working with Resource Development to strengthen partnerships with major recruiting companies, particularly in the technology sector.
More information about this department can be found on the World Wide Web at the following URL: http://web.mit.edu/cdo/www
CLIENT PARTNERSHIP AND RESOURCE DEVELOPMENT
Highlights of the year include the following:
The Team's strong fundraising results were achieved because of the commitment and tireless efforts of many faculty and staff, particularly Dean Glen Urban, Senior Associate Dean Alan White and Professor Lester Thurow. Furthermore, a growing number of key alumni volunteers made about 25 solicitation/cultivation calls in collaboration with SDT staff.
The fundraising momentum generated over the past five years has begun to show significant results that will become more dramatic in the years ahead. The Sloan prospect pool is considerably larger and more diverse than previously thought. The SDT intends to focus its efforts this year on reaching more of the 1,500 alumni/ae who have been identified as major gift prospects while targeting more of the 150 corporations and 25 foundations which are good prospects for the School.
Our optimism about the School's fundraising potential is based, in large part, on the ongoing cultivation of about 10 Sloan alumni and friends as well as several companies that have the ability and interest in making gifts in the $5 million to $25 million range to support select Sloan facilities, programs and activities. In fact, about five alumni have expressed their interest in making gifts in the $5 million to $10 million range to support the proposed new Sloan building and other priority projects/programs at the School. In addition, Sloan stands to benefit considerably from the evolving partnership between Merrill Lynch and MIT.
For FY99 the SDT has established a $25 million overall fundraising goal, including a goal of $1.7 million for the Sloan Annual Fund. The SDT will redouble its efforts to close a $25 million gift by working closely with MIT's President and Resource Development Office. As MIT prepares to launch another capital campaign, Sloan is in an excellent position to raise $150 million over 5-7 years.
At the same time the SDT will maintain momentum in building the Sloan Annual Fund by making about 1,000 prospect calls/moves per annum as we did in FY `98. A high number of prospect and the development of stronger relationships with more top donors are directly correlated to stronger results in the Annual Fund.. We plan to hold two Top Donor dinners in FY99: one in New York and the other in San Francisco to steward further the School's significant annual supporters.
The SDT will also develop a Class Reunion program in close collaboration with the Sloan Alumni/ae Affairs office in FY99. The potential success of the proposed Sloan Class Reunion program is very important to the School's external relations and long term fundraising programs. A new position has been created to develop such a program.
Educational Services manages the infrastructure upon which Sloan's academic mission is carried out. The office team oversees all registration issues for approximately 1,100 Sloan students; manages the web-based course prioritization system used by more than 2,000 MIT students, which equitably resolves difficult supply and demand issues in a department with popular classes and high enrollments: schedules the nearly 175 class sections offered each term (up from last year by about 5 per term); maintains Sloan facilities; and produces both online and paper resource material for the School (including the PhotoBook, Directory, biocards, weekly News@Sloan, and student intranet).
The Educational Services team focused this year on better service through technology. Successful projects included refining the online calendar that lists all student events and recruiting presentations and upgrading the bidding system with a new system rollout. A major benefit for first year students was the bidding enhancement that split out higher-priority bids, so students knew what was left in the "market" when they spent their points. Efforts to enhance communication channels brought several new initiatives to the student intranet, including sites for hot topic discussions (Opinions@Sloan) rentals or sales, and course section swaps. The installation of email stations and local access modem jacks allows students and guests to quickly check messages from sites throughout the School. A major initiative made the popular CourseFest much more accessible -- the videotaped faculty presentations are now presented on the web. Interactive websites developed this summer will allow wait lists to be created, sections to be swapped, and study space to be scheduled, all online.
As Sloan enrollment remains high (approximately 1,100) and Sloan classes become increasingly popular with MIT students in all departments, the Educational Services staff faces daily challenges to maintain high levels of service. Technology has provided the key both in terms of new and better kinds of services, and the ability to reach an expanding customer pool with the same staff resources.
Management of Sloan space was an addition to the Educational Services portfolio this year. Projects included coordinating the moves of more than 35 staff members, the complete renovation of a wing in E60, the creation of a 7-office research area, and the reconstruction of a set of restrooms (ongoing). Heavy involvement is expected in the analysis of options and needs as Sloan examines the possibility of a new facility.
Goals for 1998/99 include moving more completely to an electronic community by providing online biocard photos; switching the weekly News@Sloan newsletter to a totally electronic format; working with the Registrar's Office on the possibility of online drops and adds; moving to electronic course materials management for all classes through the Virtual Campus system; and integrating database issues across student information, bidding, and registration systems. Publication of a handbook is planned for faculty, to help them navigate the administrative maze involved with teaching in a large Institute. In all areas, streamlining of services continues to be the focus. Our goal is to find new ways to provide even higher quality service to a larger client base.
More information about this department can be found on the World Wide Web at the following URL: http://web.mit.edu/sloan/www/Services/Edservices/EDS.html
LEMELSON-MIT AWARDS PROGRAM
The Lemelson-MIT Awards Program is a major national educational initiative promoting invention and innovation through prizes, spokespeople, and ongoing public education activities. In 1998, our goal was to increase visibility of the Program's spokespeople and year-long educational activities, and to raise public awareness of the contributions of innovators in science, engineering, technology, and entrepreneurship to our society.
Following are highlights of our success in accomplishing this goal: Introduction of Vice President Gore by our Student Prizewinner at the Council of Competitiveness' Innovation Summit; the PR industry's Bull Dog Award in recognition of our national public education campaign; ongoing citation of our activities in a wide range of media outlets, including CNN, Fox and national network affiliates; Newsweek, Business Week, U.S. News & World Report, The Wall Street Journal, The New York Times, and USA Today; expanded reach to middle school and high school audiences, including presentations by spokespeople at the Smithsonian Institution; incorporation of our educational resources, such as our Invention Dimension web site's inventor profiles, into multimedia materials like a national syndicated radio program, "Build Your Own Business"; and standing-room-only attendance at our first ever on-campus Inventor's Workshop.
Robert S. Langer, MIT professor and inventor of groundbreaking technologies in the fields of tissue engineering and internal drug delivery systems, was awarded the half-million dollar Lemelson-MIT Prize. Jacob Rabinow, creator of numerous devices in diverse fields such as horology, sound reproduction, computer technology, and automobiles, was honored with the Lemelson-MIT Lifetime Achievement Award. Both Langer and Rabinow also received a kinetic trophy designed specially for the Program by MIT artist-in-resident Arthur Ganson. Akhil Madhani, an MIT Mechanical Engineering doctoral candidate and inventor of several robotic innovations, was awarded the $30,000 Lemelson-MIT Student Prize.
Our goal this coming year is to strengthen existing relationships and generate external collaborations with nonprofit and corporate initiatives supporting science and engineering outreach. In addition, we will launch a hands-on mentoring initiative for high school students, the Invention Apprenticeship, an on-campus speaker series on invention and innovation, and a quarterly newsletter.
More information about this program can be found on the World Wide Web at the following URL: http://web.mit.edu/invent/
SLOAN COMMUNICATION OFFICE
The mission of the Sloan Communication Office is to develop and implement an innovative, multi-media approach to promote, market and publicize Sloan as a world-class business school. The tasks of the four-person staff include designing and executing a global media strategy, coordinating and managing Sloan's web presence, supporting the dean's office communication, executing effective communication with alumni, and coordinating the development and production of various marketing materials.
The office underwent considerable staffing change in FY97-98. The entire staff is new, and all jobs have been redefined to meet the changing and increasing communication needs of Sloan. A new director began the year. A new media relations person, also responsible for supporting marketing materials production, started in September. A web coordinator, a one-year position designed to support Sloan's web relaunch, also joined the staff in September. At the close of the year, the office was still looking to hire an administrative assistant and an alumni communications manager.
Media Coverage Goes Up
Sloan enjoyed significant media attention during the year -- from The New York Times, Wall Street Journal and Business Week to Financial Times, Les Echos and Asahi News. Following is just a sampling of that coverage.
In March, in an article on the $50K competition, Inc Magazine declared, "Not all business plan competitions on university campuses are equal. To put it another way, the one at the Massachusetts Institute of Technology in Cambridge, Mass., is more equal than all the others." Mass High Tech, Financial Times and other media covered the competition as well. Sloan's "virtual campus" and Web-based accounting course were featured in an issue of the International Association for Management Education's Newsline (spring `98).
BBC Scotland just completed a series on entrepreneurship that included interviews with Professor Simon Johnson; Ken Morse, Managing Director of the MIT Entrepreneurship Center; and John Preston, senior lecturer and Entrepreneurship Center Assistant Director.
Sloan's pioneering move to all on-line applications received tremendous coverage worldwide in print, broadcast and online media this August and September. The New York Times, Houston Chronicle, The Los Angeles Times, Pittsburgh Post-Gazette, BBC On-line as well as CBS Up to the Minute, CNBC, Financial Times and The Globe and Mail were among the 60 media outlets to cover the story.
Web Relaunch Under Way
The largest project undertaken by the Sloan Communication office this past year was planning and managing the reconceptualization and relaunch of Sloan's web presence of some 6,000 pages. The effort is led by a cross-functional project planning team that includes Mary Schaefer, communication director; Johanna Schlegel, web coordinator; Suzana Lisanti, MIT's web coordinator; and Glenn Johnston, Sloan's acting director of technology services. This schoolwide collaborative effort has more than 60 people in the school directly involved with the project.
A Web Action Board (WAB) is made up of program directors who provide overall direction and set priorities for the project. Another group called the Websters includes people who are involved in the day to day upkeep of the web. At least three groups of students are working with the project planning team to support marketing of the new site and to build portions of the site, particularly for alumni. In addition, faculty, staff, students and alumni have provided input and direction as the project has progressed.
The project integrates the marketing and communication aspects of the web with the increasing number of web-based applications that provide services to alumni, students, faculty and staff. A vendor, Interactive Bureau of New York, is doing the design and helping to build the infrastructure needed for the relaunch and for future development.
A worldwide launch is planned for early 1999 of the top 1500 pages. Phase 2 will take place the six months following and will convert another 4,000 pages and incorporate greater functionality.
SLOAN TECHNOLOGY SERVICES
Sloan Technology Services (STS) supports the computing needs of faculty, staff and students at the Sloan School. It is dedicated to the support of research, teaching and the best uses of information technology (IT), implementation of new technologies, lifelong learning and changing infrastructure needs within an electronic community. STS undertook a number of initiatives during FY98:
Plans for FY99 are to:
SLOAN MANAGEMENT REVIEW
Sloan Management Review is a peer-reviewed management journal that disseminates research from the top business schools, with the dual purpose of affecting management practice and publicizing the Sloan School. SMR had a good year. Revenues, profits, circulation size, and citation levels exceeded expectations and were at an all-time high.
The journal is closing FY98 with revenues of $2.6 million and earned operating profits of over $1.2 million. We were able to contribute over $600,000 to the School's operating expenses. SMR's paid circulation is now over 25,000, up 10 percent from last year despite significant price increases. Renewal rates have increased 4 points to 58 percent. SMR's citation and impact ratings, measured by the Social Science Citation Index, were higher than ever. It was ranked fourth in management journals. Until last year, when it ranked seventh, it had been ranked 13th or 14th.) Only one managerially directed journal has a higher ranking. In addition, permissions and reprints sales continue to grow.
Seventy-three percent of the academically generated articles came from top-20 business schools; of those, three were from MIT faculty. Well-known authors included Gary Hamel, Dave Ulrich, Thomas Davenport, Michael Cusumano, David Garvin, Max Bazerman, David Feeny, Michael Earl, Karl Ulrich, Corey Billington, Scott Shane, and Richard Y. Wang.
We redesigned the journal to make it more accessible to readers, adding new graphics and a second color. The reader response has been overwhelmingly positive. We plan to continue to update our electronic offerings and increase revenues from permissions, reprints, and advertising. Revenues, profits, and circulation numbers are projected to go up modestly.
MIT Reports to the President 1997-98