Haas NewsWire

Haas NewsWire, January 20, 2004

Jennifer Chatman Receives Accenture Award from California Management Review
Teresa Costantinidis Named Chief Operating Officer and Senior Assistant Dean of the Haas School
Center for Executive Development to Deliver Finance Courses in China
Haas Financial Engineering Program Ranked #1 in the World
Chesbrough's Open Innovation Wins Best Book Award
The Challenges of Living and Working in California: A Special Alumni Event
Assistant Professor Elfenbein Explains the Role of Emotion in the Workplace
Faculty News
Haas in the News
Happening at Haas

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Jennifer Chatman Receives Accenture Award from California Management Review

An article co-authored by Jennifer Chatman, the Paul J. Cortese Distinguished Professor of Management of the Haas School, shares the annual Accenture Award given by the California Management Review (CMR) for 2003.

Chatman and co-author Sandra Eunyoung Cha, a doctoral student at Harvard, were recognized for their article, "Leading by Leveraging Culture," (CMR Vol. 45, No. 4). They share the award with Anita L. Tucker, an assistant professor at the Wharton School, and Amy C. Edmondson, an associate professor at Harvard Business School, for their article "Why Hospitals Don't Learn from Failures: Organizational and Psychological Dynamics that Inhibit System Change," (CMR Vol. 45, No. 2).

Chatman's winning article describes criteria for creating a strong and strategically relevant organizational culture and for enhancing organizational performance.

The award, which carries with it a cash prize of $2,500, is given to the authors of the article published in the previous year of CMR that has made "the most important contribution to improving the practice of management." All of the recipients will be invited to the Haas School in fall 2004 to give a public lecture based on their award-winning articles.

This year's decision was made by a panel of six distinguished executives: Jack Caouette, MBIA Insurance Corporation; Barbara Desoer, Bank of America; William R. Hambrecht, W.R. Hambrecht & Co; Stephen B. Herrick, SBH Associates, Inc.; Nancy K. Lusk, The Lusk Company; and J.P. Montoya, Procter & Gamble Co.

Chatman is the fourth Haas School faculty member to receive this award. Previous Haas recipients were David Aaker (1995), David Teece (1999), and Robert Cole (2000).

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Teresa Costantinidis Named Chief Operating Officer and Senior Assistant Dean of the Haas School

Teresa Costantinidis, who has served as assistant dean for Budget and Operations at Haas since 1999, has been appointed chief operating officer and senior assistant dean of the Haas School.

Last fall, the school undertook a national search to fill this vital position, which Costantinidis has held on an interim basis since Jay Stowsky left Haas for a position at the Goldman School of Public Policy.

In her new role, Costantinidis will oversee all school affairs, except academic and instruction matters. This includes executive management for admissions; budget and operations; marketing and communications; career planning and placement services; and computer, multimedia, and information services.

"Teresa is the kind of person who will always try to find a way to make something happen, rather than saying it can't be done," says Dean Tom Campbell. "She radiates positive energy!"

In her career at UC Berkeley, Costantinidis has served under Chancellors Heyman, Tien, and Berdahl working primarily on the budget allocations for the academic schools and colleges in both the Chancellor's Office and the the Office of the Vice Chancellor and Provost. She holds a bachelor's degree in biological sciences from UC Davis and she received her MBA from Haas in 2003.

According to Dean Campbell, the tremendously positive reviews from staff members who worked closely with Costantinidis were a strong factor in her being selected for this position. She won the UC Berkeley Staff Assembly Excellence in Management Award in 2002.

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Center for Executive Development to Deliver Finance Courses in China

The Haas School's Center for Executive Development (CED) has signed a five-year, multimillion dollar agreement with Nankai University in China to deliver graduate-level finance courses to executive MBA students in the country's burgeoning financial center Shenzhen.

While several partnerships between Chinese universities and top US business schools already exist, this is believed to be among the largest to date.

Nankai University's main campus is located in Tianjin, near Beijing, but the executive development courses will be taught at Nankai's new campus in Shenzhen, a commercial city in the south of China, near Hong Kong. Shenzhen is a fast growing finance and entrepreneurship center of China. It houses one of the country's two main stock exchanges. The Shenzhen exchange plans provide IPOs for small technology firms in the coming months.

"For decades, UC Berkeley has welcomed Chinese students to its campus; now we are pleased to have Berkeley faculty teaching business courses in China," says Paul T. Stames, assistant dean for executive learning. CED will deliver five courses, each consisting of 30 teacher-student contact hours, per year for the next five years. The five courses will count toward Nankai University's executive MBA degree. The first Haas courses will be taught in Shenzhen starting in September 2004.

The finance courses will focus on financial engineering, and are based on five courses from the Haas Master's in Financial Engineering (MFE) program. The courses featured are Derivatives: Economic Concepts, Financial Risk Management, Fixed Income Markets, Asset-backed Markets, and Dynamic Asset Management.

Nankai University is one of the top ten universities in China, and was ranked #3 among business schools in China, according to China's Ministry of Education. The city of Shenzhen is co-sponsoring this joint program.

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Haas Financial Engineering Program Ranked #1 in the World

The Haas School's Master's in Financial Engineering Program (MFE) ranked #1 among financial engineering and quantitative finance master's programs around the world, according to Global Derivatives, an information clearinghouse for quantitative finance topics.

The MFE Program earned near-perfect scores in the three categories ranked by this survey: program rating (98), faculty rating (99), and overall reputation (99). Also in the top five were: #2 Columbia University, #3 Courant Institute at New York University, #4 University of Chicago tied with Cornell University, and #5 Carnegie Mellon University.

"The Haas MFE is an excellent program, featuring some of the finest finance faculty and students anywhere in the world," says John O'Brien, executive director of MFE. "Our recruiting success shows this, and we are proud that our peers in the industry who responded to this survey have recognized this as well."

Global Derivatives hosts a web site focused on promoting networking and education and sharing information on financial engineering, derivatives, and quantitative finance topics with professionals around the world.

Global Derivatives claims this to be the first ranking of quantitative finance programs. Its ranking is based on the 249 responses it received from a survey of 500 recruiters and professionals in the US and Europe who are associated with the organization. Each school received a base score of 75, or 25 points each for program, faculty, and reputation. Global Derivatives then added or subtracted points based on how a program scored in each category.

Global Derivatives plans to conduct a more formal annual ranking of quantitative finance programs around the world starting in 2004.

See the ranking results at www.global-derivatives.com/schools/fin-rankings2003-04.php.

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Chesbrough's Open Innovation Wins Best Book Award

strategy+business magazine named "Open Innovation: The New Imperative for Creating and Profiting from Technology," by the Haas School's Henry Chesbrough, among the best business books and the top book on innovation of 2003.

Chesbrough, Ph.D. 97, who returned to Haas last fall as visiting assistant professor and executive director of the Center for Technology Strategy and Management, wrote the book based on his experiences working in the tech industry for nearly a decade. While working at Plus Development Corp., a subsidiary of data storage systems manufacturer Quantum Corp., he came to realize that these corporations were too insular in their research focus, while their businesses only used concepts conceived in-house.

strategy+business editor Randall Rothenberg explained the key concepts of the book in an NPR Morning Edition interview on December 30: "...Companies can no longer keep their own innovations secret unto themselves; ... the key to success is creating, in effect, an open platform around your innovations so your customers, your employees and even your competitors can build upon it, because only by that building will you create an ongoing, evolving community of users, doers and creators."

Open Innovation was published in 2003 by Harvard Business School Press. Excerpts of the book were published in the Harvard Business Review, the MIT Sloan Management Review, and the California Management Review. The book also led to Chesbrough's being named one of the top 50 innovators of 2003 by Scientific American.

strategy+business is published by Booz Allen Hamilton.

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The Challenges of Living and Working in California: A Special Alumni Event

A panel of experts will tackle the question "Is California a Great Place to Live & Do Business?" at a special Haas School event hosted by Don Fisher, BS 50, founder and chairman of the board of Gap Inc. and sponsored by the San Francisco chapter of the Haas Alumni Network, on Wednesday, January 28.

Moderated by David Levine, professor in the Haas Economic Analysis and Policy Group, the panel includes Ralph Cavanagh, senior vice president of the National Resources Defense Council; R. William Hauck, president of the California Business Roundtable; Sunne Wright McPeak, secretary of the business for the State of California Transportation and Housing Agency; and Allan Zaremberg, president & CEO of the California Chamber of Commerce.

The event will be held at Gap's corporate headquarters at Two Folsom Street in San Francisco on Wednesday, January 28, from 6:30 to 9:00 p.m. There will be a reception from 6:30 to 7:30 p.m. and the building's art galleries will be open for viewing during that time.

Admission is limited and pre-registration is required. Visit http://www.acteva.com/booking.cfm?bevaid=60488 to register. For more information, contact the Haas Alumni Relations Office at 510-642-7790 or alumni@haas.berkeley.edu.

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Assistant Professor Elfenbein Explains the Role of Emotion in the Workplace

Emotions are not only a fact of life and a reality in the workplace, but according to Hillary Anger Elfenbein they play a critical role in how individuals get their work done and how well they succeed in a team environment.

The newly minted assistant professor in the Haas School's Organizational Behavior and Industrial Relations Group came to this conclusion in the course of her own work experiences, which then became the cornerstone of her research on recognizing and communicating emotion in the workplace.

"When I worked in consulting, my office was right next to the mailroom," remembers Elfenbein, "and all day people getting their mail stopped by to talk about their interpersonal issues and conflicts." She realized that that the personal interactions among consultants and between clients and consultants were much bigger drivers of success than the technical quality of the financial and management analysis.

"Emotional expressions are evolutionary processes to help us get along in a social environment such as the workplace," Elfenbein explains. "People are constantly scanning the emotional states of those around them, not for social reasons but to get their jobs done."

To test the differences in people's ability to interpret emotional cues accurately, she conducted experiments with randomly assigned teams at the outset of their one-year work program with Americorps. Some groups outperformed what she would have expected them to accomplish based on their individual test scores, and some groups underperformed.

"Even after being together for only one week, some teams had already jelled in the way that they interpreted each others' emotions and other teams were at a loss with each other," she found.

People interpret emotional signals without being aware of it, and that plays a huge role in hiring, promoting, and teamwork decisions, concludes Elfenbein. "In the modern corporation, we are looking for a good fit, but what it means to be a good fit is very ambiguous. We often don't realize the type of information that is giving us the gut decision why this person will fit in here and this person will not. Whether a person's style feels comfortable is largely driven by their match with our own interpersonal style."

The challenge of reading emotional cues is amplified when communicating with someone from a different culture. Elfenbein discovered this first-hand while working in India. "What I thought were expressions of anger was just a more emphatic way of speaking," she remembers. "At the same time, at first my own statements often were not taken seriously enough because I did not express them very emphatically."

Signals break down much more often across cultural boundaries than within a culture, she concludes, because people in different cultures use emotion in different ways.

"There is this myth that emotion is universal, but that's only partially true," she says. Although researchers have shown that people around the world could understand each others' emotional expressions better than chance would predict, Elfenbein found that something still gets lost along the way. In analyzing the results of 87 prior studies she proved that people systematically understand the emotions of individuals from their own cultural group better than those from another.

This has big implications for multinational workplaces. Elfenbein is planning to research how expatriate executives adjust to their positions abroad. "A lot of these international transfers underperform against what they were expected to accomplish," says Elfenbein, who hopes to shed light on how cultural differences in emotional styles can add to the challenge of working abroad and how to improve quality of cross-cultural assignments.

Elfenbein, who will teach negotiation in the MBA program in the spring, is well acquainted with MBA coursework. As part of earning her Ph.D. in organizational behavior at Harvard University, she chose to complete the first year of its MBA program. The coursework needed for statistical analyses of her research studies concurrently earned her a master's degree in statistics. Her undergraduate degrees are in physics and Sanskrit.

After 14 years in Boston, Berkeley was the first choice for her and her husband Daniel Elfenbein, who teaches competitive strategy at Haas. "It's a serious environment for research but also down to earth," she says. "To work in a department where each of my colleagues is a top-rated researcher is a delight."

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Faculty News

Rosen to Speak at Annual Mayor's Forecast with Brown and Newsom

Kenneth Rosen, the California State Professor of Real Estate and Urban Economics and chairman of the Fisher Center for Real Estate and Urban Economics, will provide a real estate forecast at the "Annual Mayor's Forecast" presented by the San Francisco Business Times and Grubb & Ellis on January 29 at the Oakland Convention Center. Mayors Jerry Brown of Oakland and Gavin Newsom of San Francisco will speak at the event on "The State of the Cities," followed by both a real estate and economic forecast. For more information, visit http://www.bizjournals.com/sanfrancisco/networking/events/10459.

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Kenneth Rosen, the California State Professor of Real Estate and Urban Economics and chairman of the Fisher Center for Real Estate and Urban Economics, was quoted in a Sacramento Bee editorial on January 15 titled "More Recklessness: Good Years are Not the Time for Debt." For full text, visit http://www.sacbee.com/content/opinion/editorials/story/8104258p-9036641c.html.

Hal Varian, professor in the Operations and Information Technology Management Group, wrote an op-ed published in The New York Times on January 15 titled "Why Is That Dollar Bill in Your Pocket Worth Anything?" For full text, visit http://www.nytimes.com/2004/01/15/business/15scene.html?pagewanted=print&position=. (requires registration.)

Terrance Odean, associate professor in the Finance Group, was quoted in the San Francisco Bay Guardian's January 14 article titled "Get Poor Quick," about a currency investment scam. Odean commented that most investors have no business investing in the extremely risky currency markets.

John Quigley, the I. Donald Terner Distinguished Professor and the director of the Berkeley Program on Housing & the Urban Economy, was quoted in the San Francisco Chronicle on January 14 in an article, titled "High Costs Take Toll on Bay Area," about the effects of higher cost of living on businesses in the Bay Area. For full text visit, http://www.sfgate.com/cgi-bin/article.cgi? file=/chronicle/archive/2004/01/14/BUGSC49D731.DTL&type=printable.

Benjamin Hermalin, the Willis H. Booth Professor of Banking and Finance, was quoted in the Contra Costa Times on January 13, in an article titled "Ellison No Longer Leads Oracle Board." Hermalin commented that since Ellison was replaced on the Oracle board by another company insider the change will not make much difference for the company. For the full text, visit http://www.contracostatimes.com/mld/cctimes/business/7697949.htm? template=contentModules/printstory.jsp.

The study on overseas outsourcing by Fisher Center economists Ashok Bardhan and Cynthia Kroll was cited in the Contra Costa Times on January 12 in an article titled "Lawmakers Work to Limit Cheaper Overseas Labor." For the full text, visit http://www.contracostatimes.com/mld/cctimes/content_syndication/local_news/7690073.htm? template=contentModules/printstory.jsp.

Terrance Odean was quoted in The New York Times on January 11 in an article titled "Mutual Fund Industry Booms Despite Scandal." Odean commented that some investors probably don't understand the scandal due to the esoteric nature of the trading charges. For the full text, visit http://www.nytimes.com/2004/01/11/business/mutfund/11fund.html? pagewanted=print&position=. (Requires registration.)

Kenneth Rosen was quoted in the Contra Costa Times on January 11 in an article titled "Budget Rests on Risky Forecast: Closing $14 billion Deficit Tied to Optimistic Growth." Rosen commented that the housing market could start to cool off this year or next, leaving home owners with less cash to pull from their equity, cutting their spending. For full text, visit http://www.contracostatimes.com/mld/cctimes/content_syndication/local_news/7684549.htm? template=contentModules/printstory.jsp.

Peter Sealey, adjunct professor in the Marketing Group, was quoted in the San Jose Mercury News on January 8 in an article titled "Sony to Launch Online Music Store." Sealey commented on the difficulty of deciding whether or not to enter the online music market at this time. For full text, visit http://www.mercurynews.com/mld/mercurynews/entertainment/music/7656062.htm? template=contentModules/printstory.jsp.

Kenneth Rosen was quoted in the Contra Costa Times on January 8 in an article titled "Economists Assail Bond Plan." Rosen is quoted recommending at least a temporary tax increase on the wealthiest Californians to help fill the budget gap. For the full text, visit: http://www.contracostatimes.com/mld/cctimes/business/7659867.htm? template=contentModules/printstory.jsp.

Kenneth Rosen was quoted in the Sacramento Bee on January 8 in an article titled "Economic Panel Gives Gloomy Assessment of California's Economic Future."

Kenneth Rosen was quoted in the Bond Buyer on January 8 in an article titled "Angelides, With Economists' Aid, Answers Schwarzenegger." Rosen commented that the California budget crisis must be solved through structural changes in the budget.

Dean Tom Campbell provided commentary on Governor Arnold Schwarzenegger's State of the State address for Channel 5 news on January 6.

Kenneth Rosen was mentioned in an article by Reuters News on January 7 titled "Economists Warn Schwarzenegger on Deep Budget Cuts."

James Cook, MBA 99, was interviewed by Minnesota Public Radio's "Starting Over" series on January 5. Cook described his decision to join the staff of "The Painted Turtle," a soon-to-open summer camp for children with chronic medical conditions that preclude them from attending regular summer camps.

The Haas School was mentioned in an editorial in the San Francisco Chronicle about the California budget crisis on January 5 titled "The Governor vs Labor."

Janet Yellen, the Eugene E. and Catherine M. Trefethen Professor of Business Administration, was quoted in the San Diego Union Tribune on January 4 in an article titled "Fed Chief Says Focus on Low Inflation Helped in Crises." Yellen commended Alan Greenspan for his aggressive anti-inflationary policies.

A study by Terrance Odean and Brad Barber was cited in The New York Times on January 3 in an article titled "Irrational Investor Behaviour Gets Downright Wacky." This study was also cited in the Financial Times in a January 3 article titled "Take a Sipp of Something New: New Year's Resolutions," and in Annuity Market News' January 1 article titled "Investor Psychology Important for Retirement Planning."

Terrance Odean was quoted in CFO.com on January 1 in an article titled "Insights from Behavioral Finance Could Change the way Companies Approach Mergers and Acquisitions." Odean commented on the possible motivators behind acquisition decisions.

David Vogel, the George Quist Professor of Business Ethics, was quoted in the Financial Times on December 31, 2003, in an article titled "Companies are Under Pressure to Display Integrity." Vogel commented that corporate culture always wins out over corporate rules. The same article also appeared on FT.com, the Financial Times web site, under the title, "Climate Change: the Need for Ethical Standards."

Predictions for 2004 by Dean Campbell were featured in the year-end issue of Silicon Valley Biz Ink.

Dean Campbell was quoted in the San Francisco Chronicle on December 30 in an article titled "State's Business Climate Stormy." Campbell commented about California's competition for business including Arizona, Oregon, Texas, Taiwan, Singapore, China, and India.

NPR's Morning Edition with Bob Edwards discussed the book "Open Innovation" by Henry Chesbrough, visiting assistant professor and executive director of the Center for Technology Strategy and Management, as one of strategy+business magazine's best business books and the top book on innovation of 2003 on December 30.

Don Fisher, BS 50, founder and chairman of Gap Inc., was quoted in the San Francisco Chronicle on December 29 in an article titled "Gap Founder Big Booster of KIPP Schools." Fisher discussed his vision for education. The Haas School was mentioned for providing management training for KIPP principals. A second article titled "A Program trying to turn at-risk youth into scholars," also mentioned the Haas School's training program.

Kenneth Rosen was quoted in the San Francisco Chronicle on December 27 in an article titled "Commercial Real Estate Emerging from Doldrums." Rosen commented that the state's recovery is underway.

An opinion piece by Jonathan Berk, Harold Furst Associate Professor of Management Philosophy and Values, and Terrence Hendershott, assistant professor in the Operations and Information Technology Management Group, inspired the Wall Street Journal Online's Sports section to publish several proposals to solve the Sudden Death Overtime problem in the National Football League. They appeared under the headline: "Should the Outcome of a Coin Flip Mean So Much in NFL Overtime?" on December 23.

Sebastian Teunissen, executive director of the Clausen Center for International Business and Policy, was interviewed live on December 11 for the Compaq Marketwrap radio show. Teunissen commented on Federal Reserve Chairman Alan Greenspan's December 11 speech to the World Affairs Council in Dallas, Texas, and on the US trade relationship with China.

Kathy Klotz-Guest, MBA 01, was profiled in an article in the San Jose Mercury News on December 9, titled "Have You Heard the One About a Humor Consultant?" Klotz-Guest teaches companies about the effective use of humor. For the full text, visit; http://www.bayarea.com/mld/mercurynews/business/7449036.htm.

Terrance Odean's study with Brad Barber, titled "Trading Is Hazardous to Your Wealth," was cited in the following publications:


Severin Borenstein, the E.T. Grether Professor in Public Policy and Business Administration, was quoted in the San Jose Mercury News on December 16 in an article titled "Gas-Price Drop Eases California Ethanol Fears." Borenstein commented that there is no sign that California's conversion to ethanol is going to lead to price increases.

Terrance Odean was quoted in The New York Times on December 14 in an article titled "What Bubble? Wall Street's Fever Spikes Again." Odean commented that while the current market is not as exuberant as it was in the boom times, it is just as irrational. An accompanying article, "Good News? Buy! Bad News? Buy Anyhow?," cited the study by Odean and Barber.

Kenneth Rosen, was quoted in the Atlanta Journal-Constitution on December 2 in an article, titled "A Two-fisted Recovery Housing Rises; Factories Hum." Rosen commented that the housing market is being driven primarily by low interest rates and once the rates go up, the market will drop.

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Alumni Events


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