Don't Go Near The Dollars

By Ezra Bowen

Everybody knows that the big reason for going to business school is to get smart about business. Correct? And if you get smart enough to make megabucks while still in B-school, then good for you -- and the university that showed you how to do it. Correct?

Well, no, says John Burton, dean of the Columbia Business School. Last week Burton marched into the classroom of Asher Edelman, a bronzed wizard of corporate raiding who is doubling as a rookie adjunct professor at the B- school. The dean had a distinctly unwelcome announcement for the seminar "Corporate Raiding: The Art of War." Columbia was rescinding a $100,000 finder's fee that Professor Edelman had offered to any student who came up with a target company Entrepreneur Edelman could buy.

"Linkage between direct economic incentive and what goes on in the classroom would bias the academic environment," explained Burton. How, one student asked brightly, did the Edelman offer differ from Columbia's Hutchinson Award of $5,000 for any B-schoolers who developed an effective new- venture plan? A matter of quantity and academic quality, indicated the dean. Whereupon Edelman asked whether the class agreed. It did not, by a vote of 14 to 1. But the school's faculty strongly backed Burton.

Edelman, who claims the fee is his usual one, argued that academic freedom was being violated. Prior to the classroom showdown, he protested to Burton that Finance Professor James Scott had approved the offer of a fee last fall. Edelman even suggested spreading the $100,000 among all the seminar students, and matching it with a $100,000 grant to the university. To no avail: Burton threatened to cancel Edelman's class and his appointment. The eclectic entrepreneur -- whose office is hung with his museum-caliber art collection, along with the scalps of such takeover prizes as Data Point and Telex Corp. -- wants to continue teaching, and so caved in.

The controversy fueled negative comment across the country. At the University of California, Berkeley, David Vogel, who teaches business ethics, said flatly, "The faculty should have censured him or fired him." Harvard, Stanford and Northwestern reported that their schools would never have approved. Observed Richard West, dean of New York University's business school: "Some students in our schools may want to sell their souls to the devil. But we should not have the devil standing at the front of the class."

Others were not so quick to cast brimstone. Harvard Business Professor Samuel Hayes saw only an error of magnitude. The offer was so lush, he argued, that Edelman "created the impression he was trying to bend the students' will." Raymond Miles, dean of Berkeley's business school, was "hesitant to say it's clearly inappropriate or unethical." But, he wondered, "do we turn the academic enterprise into a marketable factory?"

The problem is not limited to business schools. Science whiz kids; computer hotshots; music, art and writing students -- all have worked with professors to create marketable projects. In B-school classrooms, however, the issues of money and purpose may be irresolvably muddied by the institution's bedrock function of providing an education pointed toward profit. Dean John Rosenblum of the University of Virginia's business school notes that, like others, his school routinely participates in corporate-sponsored contests with financial rewards for smart students. Thus he sees nothing inherently wrong in a classroom offer.

But Rosenblum, putting his finger on what is perhaps the most sensitive part of the issue, condemns the element of personal gain for the professor. "That's absolutely wrong," he states. He adds that the whole adventure gives off a deplorable "me first, let's get in there and make our money" attitude. In today's business whirl, though, with M.B.A. students convinced that the bucks start here, the wonder may be that no one thought of Edelman's $100,000 learn-and-earn incentive before.

With reporting by Robert Ajemian/Boston, with other bureaus