Seats of Honor Professors in top-tier posts make breakthroughs in management education By John H. Ostdick The formula for assembling a talented, innovative university faculty mirrors business recruiting: Providing an exemplary culture, top pay, and outstanding resources yields exceptional scholars. Universities, especially comparatively young ones like UTD and its rapidly growing School of Management (SOM), have to maximize their means for supplying such hiring inducements. Endowments, once the domain of private colleges, are becoming the linchpin that allows public universities to retain the talent needed to produce world-class programs. Linking money with top names of past and present Endowed funds - donations specifically earmarked to establish perpetual money sources - often carry the names of academic, business, and civic pioneers. At The School of Management, top posts - either the highly prestigious positions known as "chairs" or named professorships - honor Eugene McDermott, one of the visionaries who founded UTD; the Caruths, local business and civic giants; and Ashbel Smith, a doctor and community leader known as the father of The University of Texas. Dean Hasan Pirkul and Drs. Frank Bass, Sureth Sethi, Rajiv Banker, and Ram Rao, are the leading SOM faculty members occupying these spots. The advancement of these UTD scholars owes much to endowment donor benevolence. Historically, such generosity can be traced as far as Plato, who gave his nephew a farm and told him to use harvest income to support faculty and students. Today, recipients usually are highly accomplished in teaching and groundbreaking research. In The U.T. System, endowed professors receive special budgets that augment salaries and support their research. "The endowed chair provides the funds to attract the best and brightest professors with competitive salaries and extraordinary support for research," says Dr. Hobson Wildenthal, UTD executive vice president and provost. In turn, the reputation and research of those named to endowed posts tend to attract more research funds to the University, as well as boost the morale and output of their colleagues. Endowment donations differ from one-time gifts in that endowment monies are invested, and an annual sum is drawn from the earnings. Donors can name an endowment for the person or entity of their choice. The U.T. System has established guidelines and qualifying levels for endowments, which range from a Named Professorship to a Distinguished Chair. A Distinguished Chair, for example, requires a donation of one million dollars or more. Making progress Back in the 1970s and 1980s, when UTD was a new - and not particularly wealthy - university, it found itself with relatively few truly endowed chairs, Dr. Wildenthal says. "We've made some progress in the past ten years." The SOM sees signs of progress in the Eugene McDermott Professor of Management Chair, which Dr. Bass holds, and the Mabel Peters Caruth Professor of Management Information Systems Chair, which Dean Pirkul occupies. Both are fed by money in Austin invested in mutual funds, which guarantees that ongoing funding is secure. "But we need other ways to reward more of our people," Dr. Wildenthal notes. Another way the University addresses that need is through the Founders and Ashbel Smith Professorships. They are funded by an unrestricted internal endowment, established by founders Cecil Green, Eugene McDermott, and J. Erik Jonsson to meet UTD's ongoing financial needs. University-wide, UTD has fifteen endowed chairs, eight Ashbel Smith or Founders Professors, and ten other named professors. "It's important to note that the professors who are here, including myself, would not be here without the endowed positions. The salary, funds, research, and prestige associated with the chair are tantamount," explains Dr. Bass, noting that Dr. Wildenthal and UTD President Franklyn Jenifer changed the focus of the University when they concentrated funding endowments on the engineering and management schools. "It was the turning point for the School." Dean Pirkul: A matter of academic accomplishments Not surprisingly, the SOM faculty members honored with high-profile endowments are its most recognizable names, those who lend the School both prestige and particular skills. Dr. Pirkul joined UTD from Ohio State University in 1996. The honor of holding the Caruth chair is especially meaningful, he says, because it was awarded as recognition of his academic accomplishments. His research specialty is topological design of communications networks, a field in which he has published, lectured, and consulted extensively. Dr. Frank Bass: Marketing science pioneer Dr. Bass, a trailblazer in the evolution of the modern business school and a marketing science pioneer, holds the prestigious Eugene McDermott Professor of Management Chair. Dr. Bass, who also heads the Morris Hite Center for Product Development and Marketing Science, earned international recognition and Nobel Prize nominations for his marketing and economics work, including the celebrated "Bass Model," which tracks the distribution of durable goods. For many years after he joined UTD from Purdue University in 1982, marketing faculty nationwide referred to the School as "Bass's shop." The native Texan, who also directs the School's PhD Programs, is currently focusing on broadband technology and its far-reaching implications for mass customization in high-velocity markets. He is building the most comprehensive database to date on new-product diffusion. There is an overlap of research activity between the McDermott Chair and Dr. Bass's involvement with the Morris Hite Center (see Marketing Savvy on page 24), but the chair is devoted primarily to teaching and the PhD Programs. "One way of measuring the reputation of UTD's programs is the extent to which top universities hire its PhD graduates," Dr. Bass says. "One of my former students at UTD (Dr. Dipak C. Jain) was appointed this year dean of the Kellogg Graduate School of Management at Northwestern University, which Business Week ranked as the number two U.S. business school. We've also placed PhD students at other top universities, such as Stanford, Yale, and Cornell." Dr. Sethi: Held in regard Dr. Sethi, internationally recognized for applying quantitative methods to the fields of manufacturing and operations management, finance and economics, marketing, and optimization theory, is the Ashbel Smith Professor of Operations Management. Dr. Sethi, who joined the SOM from the University of Toronto in 1997, has authored four books and more than two hundred fifty articles. "The University recognizes the importance of its chaired professors," Dr. Sethi says. "Most of them have access to everyone, including the [UTD] president. We meet with the provost regularly. We are supposed to play a bigger role in the workings of the University and the establishment of policy. At a university the size of UTD, that aspect of influence is very attractive. "Further, it reflects on my work; when I attend conferences, other participants recognize that my university holds me in regard." Dr. Banker: A builder The research of Dr. Banker, the Ashbel Smith Professor of Accounting and Information Management, focuses on the impact of information technology on communication and coordination between different units within a business, as well as the linking of different organizations in the value chain. Dr. Banker, who joined the SOM in 1997 from the University of Minnesota, directs SOM's Accounting and Information Management Programs. One of his roles is to help develop the School as a major player in the management information systems arena. "I see myself as a builder," he says. "When I came here, the accounting area had just a [few] faculty members. We now have fifteen and are recognized as one of the leaders in management accounting, information technology, and accounting information systems. We started a new PhD accounting program [in the fall of 2001] for individuals seeking training in the most advanced issues, both theoretical and applied, that organizations face in the twenty-first century." Dr. Banker, who also considers himself a bridge between the University and the neighboring Telecom Corridor, is executive director of the new Center for Practice and Research in Software Management (see A Study of Core Competence on page 22), where faculty and students will collaborate on research with many high-tech companies, industry associations, and research institutions. Dr. Rao: 'A sense of belonging' Dr. Ram C. Rao, Founders Professor of Marketing, joined UTD in 1983. His research investigates how firms compete and how they should formulate competitive marketing strategies, with an emphasis on pricing. Most recently he is exploring the growth of private labels and how they affect retail competition. Like his colleagues, he finds his Founders Professorship affords him a measure of prestige, more leeway in his research, and the opportunity to attend more conferences integral to his work. Beyond that, "it offers a sense of belonging and recognition from the University in a concrete way," he says. "We are really short of School of Management-specific endowed positions," he says. "We must add them if we are going to accelerate the program the way we want." In 1999, Dr. Rao also helped launch an e-commerce program in the SOM to "fill the needs of the electronic commerce industry for a new kind of professional." The Internet boom created overwhelming interest in the program at that point; the industry fallout since has tempered but not quashed its momentum. Backing a winner The SOM challenge, then, is to continue to build on the momentum these scholars have helped hone. "We've done a lot, and the credit should go to the faculty and administration," Dean Pirkul says. "Our enrollments have nearly doubled, and we've hired world-class, highly regarded faculty in all fields. We've revised all of our degree programs and offered new programs that have been well accepted. We're embarking on building a new home for the School. [SOM is in the second phase of fundraising for a new structure targeted for completion by summer 2003 (see Building for the Future on page 2).] "We will continue to aggressively hire new faculty," he says. "We are now reaching a critical stage, however. We have a group of outstanding young people coming up [in the faculty ranks]. In the long run, the key to keeping these people here is to be able to provide them with endowed chairs." To make that happen, Dean Pirkul reasons that in the next five years SOM will need ten to fifteen more chairs or professorships to maintain its strengths. Dr. Wildenthal concurs. "We compare well against Top Twenty competition, from faculty quality and in facilities - once we get our new building constructed - but we currently are undercapitalized to recruit our next stage of faculty," he says. "The competition is intense because other schools have been so successful in developing this private financial base to supplement state funding. "Twenty years ago, The School of Management brought in a lot of money and didn't cost too much," he continues. "Right now, the University is pouring supplemental resources into the School to keep it competitive because it is an absolutely vital ingredient to the University and the community as a whole. "We can't grow or sustain quality on state or general endowment money indefinitely, however. Ten, twenty, thirty years down the road, the private sector has to feed the growth here. The dean has set forty million dollars as an endowment fundraising goal, and I think that's a good number. "To be blunt, people like a winner, and UTD has only started to be a winner in the last few years." John H. Ostdick writes for many national publications. Dallas freelance writer Helen Bond contributed to this report.