Curriculum Update: Making the Case for Spanish Banking
Thanks to the initiative of two management professors and a grant from Citibank, students this year are using a case study on international banking entitled, “The New Conquistadors: Spanish Banks and the Liberalization of Latin American Financial Markets.”
The case, the first of its kind to be researched and written by Wharton faculty, will be incorporated into management courses at both the undergraduate and graduate levels.
“Our intent was to look at the huge push into Latin America made by two Spanish banks starting about 1995,” says Adrian Tschoegl, assistant professor of management. “We wanted the case to serve as a discussion point for a number of issues having to do with entry strategy, choice of markets, organization of multinational enterprises and so forth.”
Specifically, he and colleague Mauro Guillén (see faculty profile this issue), also an assistant professor of management, analyzed the efforts of Banco Santander and Banco Bilbao Vizcaya to create extensive retail banking empires in Latin America on the basis of approximately 20 acquisitions of leading domestic banks. “The arrival of the Spanish banks in Latin America represents one of the boldest and most far-reaching initiatives in multinational retail banking to date,” note the authors, who focused their study on three of the region’s key markets: Chile, Argentina and Mexico.
To write the case, Tschoegl and Guillén spent several weeks in the three countries above, and also Spain, where they interviewed top banking officials, regulators and academics. Citibank, which has had offices in Latin America since the early 1900s, is mentioned in the study but is not its focus, Tschoegl says.
The case study includes sections on the economic and political backgrounds of Chile, Argentina and Mexico as well as the structure of their banking systems and their specific relations with Spanish banks. Profiles of the individual Spanish banks are also included.
The two authors provide a teaching note offering questions for discussion by students and instructors. In addition to demonstrating an aspect of global financial deregulation, “I hope this case also helps students realize that their competitors, clients and customers will not always be American,” Tschoegl says. “Students need to break away from their orientation to the U.S. and recognize that there are whole areas of the world that don’t have that much to do with U.S. markets.”
As a sidelight to their study of Spanish banks, Tschoegl and Guillén wrote a second “mini-case” entitled, “Banking on Gambling: Three Regulators Respond to Lottery-Linked Bank Deposit Accounts,” which analyses a product recently introduced into Latin America by Spanish banks — lottery-linked deposit accounts.
In one particular Argentine subsidiary of Banco Santander, “If you open a savings account, you get a certain number of tickets in a lottery run by the bank,” says Tschoegl. “Every day there are prizes totaling $20,000 and once a month a lottery of $222,000. A customer’s chances of winning are proportional to the size of his or her deposits measured in increments of $200.
“You are automatically enrolled in this game and in return, the interest rate on your savings account is somewhat less than the rate on an account that doesn’t have this lottery feature. So you are paying for your tickets by foregoing some interest.” Lottery-linked deposit accounts, Tschoegl notes, raise a number of interesting financial, ethical, regulatory and policy issues.
The lottery system mini-case is expected to be introduced into an undergraduate business government relations course this year.
Gerrity to Step Down as Dean this Summer
Thomas P. Gerrity will step down as dean of Wharton in July after serving in that position for nine years. He plans to pursue scholarly interests and teach at the School as well as spend more time with his wife and four children.
Gerrity is the 11th dean of the School since its founding in 1881 as the nation’s first collegiate school of management. During his tenure here, Wharton has attracted record numbers of applicants, high levels of academic quality, strong financial support and widespread recognition of its leadership position around the world.
A well-known authority on strategic change management and an early pioneer in business re-engineering, Gerrity was founder and CEO of the Index Group, which he built into one of the world’s leading consulting firms in information technology and management.
“We have an extraordinarily healthy spirit and energy at Wharton,” he notes. “I have been truly honored by the commitment of the entire Wharton community to the success and accomplishments of the School across all of our strategic priorities.”
“No one has had more impact on Wharton’s rise to national, indeed international, prominence than Tom Gerrity,” says Penn President Judith Rodin. “Clearly he has been the linchpin in Wharton’s reputation as the finest business school in the world … His leadership has been magnificent, not only in advancing curricular innovation and stimulating exciting new academic collaborations, but in his ability to attract unprecedented support for Wharton and its teaching and research mission.”
A search committee has been appointed to look for a new dean.
New Business School to Launch in India
A group of business leaders, in affiliation with Wharton and the Kellogg Graduate School of Management, is scheduled to open a new business school in Hyderabad, India, in the year 2000.
The India School of Business (ISB), which will offer world class facilities in terms of faculty, students and infrastructure, is intended to be an international institution with a global focus. Its goal will be to develop future leaders of Asia, with a curriculum that emphasizes management in transitional and rapidly evolving economies.
One of the main supporters of this initiative is Rajat K. Gupta, managing director, McKinsey & Co., Inc. He and approximately 50 others — including CEOs of global enterprises and Asian companies as well as founders of Indian businesses — will form a governing board that will guide and shape the evolution of the school. Also on the board will be the deans of Wharton and Kellogg.
The ISB will initially offer two programs: a one-year MBA for students with two to five years of work experience and a series of Executive Education courses. The school also has plans to introduce doctoral and faculty research programs once the institution is established.
The MBA, which will run for a full 12 months, will cover the traditional range of business disciplines with an emphasis on managing in high growth economies and the integration of state-of-the-art management approaches to the Asian context.
Wharton and Kellogg will help launch the school as well as recruit a dean and permanent faculty members. In addition, this affiliation will allow members of the faculty at the U.S. schools to teach at the ISB, and faculty from the ISB to attend Kellogg and Wharton as visiting scholars. Student exchange programs may also be arranged.
Market Forces
The Wharton-Jiangsu Province Executive Development Program, offered through Wharton’s Executive Education division, brought 40 government officials and managers of stated-owned enterprises to Philadelphia last fall for an eight-week course on the market economy. The group, which returned to China on Dec. 5, studied “everything from economics and marketing to finance, production and quality control,” says Professor Stephen J. Kobrin, director of the Joseph H. Lauder Institute of Management and International Studies and academic director for the Wharton-Jiangsu program.
Four Receive School’s Distinguished Service Award
The Distinguished Service Award was established in 1988 to recognize alumni who demonstrate outstanding leadership in their professional activities and extraordinary, ongoing volunteer service to Wharton.
Recipients of the 1998 Distinguished Service Awards, presented October 23 in Philadelphia, include:
DAVID B. FORD, WG’70
David Ford, co-head of the asset management division at Goldman, Sachs & Co., has worked over the years to support Wharton through his firm. As a result, Goldman Sachs today is the single largest employer of Wharton graduates.
Ford has also been one of the School’s leading volunteers. For the past three years, he has served as chairman of Wharton’s Annual Fund. During his tenure as chair, the fund increased by 358 percent.
HARVEY H. W. CHANG, WG’77
Harvey Chang has been a leader in the banking, government and manufacturing sectors. Today, he is the senior vice president and CFO of Taiwan Semiconductor Manufacturing Co., the world’s largest pure integrated circuit foundry.
He has promoted Wharton in the Republic of China in a number of different ways. In addition to serving as president of the Wharton Club of Taipei, he led the 5th Asian Regional Alumni Meeting in 1998. He has also undertaken an initiative with the president of the Wharton Club of Shanghai to develop positive Cross-Straits relations.
FRÉDÉRIC DUBOIS, WG’73
Frédéric Dubois has been a banker and entrepreneur in the healthcare industry. Currently he is the managing partner of Paris-based Santé Investissement, which manages investment funds specializing in hospitals and healthcare businesses in France.
His affiliation with the School and his leadership role in Wharton’s Annual Fund has enabled him to help transform the fundamental philanthropic relationship between Wharton and the School’s European alumni.
WANG XI , WG’47
Wang Xi’s career has included positions as scholar, professor and corporate executive. He currently is vice president of the General Reinsurance Corp.
Over the years he has promoted Wharton throughout the People’s Republic of China. In addition to serving as president of the Wharton Club of Shanghai, he led the 4th Asian Regional Alumni Meeting in 1997. He has also undertaken an initiative with the president of the Wharton Club of Taipei to develop positive Cross-Straits relations.
New Initiatives, New Management Mark Wharton Entrepreneurial Center Anniversary
The Wharton Entrepreneurial Center began its 25th anniversary celebration in November with a kickoff dinner honoring its founder and major donors.
The Center, the first of its kind in a major business school, encompasses the Sol C. Snider Entrepreneurial Research Center — currently headed by Ian C. MacMillan, George Taylor Professor of Entrepreneurial Studies — and the Goergen Entrepreneurial Management Program, funded in 1997 with a $10 million gift from Robert B. Goergen, WG’62, chairman and CEO of Blyth Industries.
The Nov. 11 dinner honored three people: Center founder Edward B. Shils, W’36; Philadelphia entrepreneur Ed Snider, who endowed the center in 1985 in memory of his father, Sol C. Snider; and Goergen. Preceding the dinner was this year’s first Stolaroff lecture featuring Hubert J.P. Schoemaker, chairman and co-founder of biotechnology firm Centocor, Inc.
Among the events in this 25th anniversary year is the pilot program for the School’s Business Plan Competition and Entrepreneurial Coaching Initiative. The top prize of $25,000 has already inspired entries from more than 175 student teams. Throughout the year, the Coaching Initiative will be developing seminars and one-on-one mentoring for student teams participating in the competition. Wharton alumni who would like to mentor entrepreneurial teams should call the office of Wharton Entrepreneurial Programs at 215.898.4856.
The anniversary year also marks the arrival of Mark Dane Fraga as managing director of Wharton Entrepreneurial Programs. He will be responsible for managing the Sol C. Snider Entrepreneurial Research Center, strengthening the academic program of entrepreneurial courses offered through the management department under the Goergen Entrepreneurial Management program, and building a stronger environment that supports entrepreneurial activity among students.
Fraga comes from Greater Philadelphia First, the Philadelphia area’s CEO civic leadership organization, where he spent four and one-half years as program director for economic development initiatives. He has a BA in history from Penn and a master’s degree in modern British history from Oxford.
School Appoints Vice Dean for International Academic Affairs
In his new position as Vice Dean for International Academic Affairs, Jitendra Singh has been thinking globally. He envisions, for example, a network of research relationships around the world, based in business schools or other leading institutions and involving faculty in research exchanges.
He also would like to see more Faculty International Seminars, designed to expose faculty to countries about which they have little or no knowledge. “It’s an excellent way to get a guided tour into another region of the world,” he says, noting that previous seminars to Japan, Malaysia and Korea have been oversubscribed.
And he wants to link more faculty to the international business community through an increase in international executive education programs. “That could mean more faculty going abroad to teach or more foreign audiences coming to Philadelphia,” says Singh, professor of management and sociology. “The idea is to push the frontier of international executive education even more than we already are.”
Singh’s mandate, as stated by Wharton Dean Thomas P. Gerrity, is to “more broadly integrate globalization into research and teaching.” For Singh, who has taught, advised and consulted in approximately 20 countries, that means “establishing a context where faculty — encouraged by a system of incentives, rewards and opportunities — can create and disseminate internationally-oriented intellectual capital.”
Singh, a native of Lucknow, India, earned an MBA from the Indian Institute of Management, Ahmedabad, and an MA and PhD from Stanford University. He came to Wharton in 1987.
He will be building on efforts pioneered by others at the school, including Richard Herring, vice-dean, Wharton undergraduate division, who has expanded the number of exchange programs for undergraduates; Janice Bellace, deputy dean, who has established contacts with Singapore Management University and the Chinese University of Hong Kong; and Professors Jerry Wind and Anthony Santomero, who have played leadership roles on the School’s International Committee.
Two Professors Leave Their Mark on Wharton
Management professor Edward H. Bowman, a well-known expert in managerial decision making and corporate strategy, died last fall of complications from heart surgery. He was 73.
“Many faculty will remember Ned Bowman as a mentor,” notes Janice Bellace, deputy dean of Wharton. “He was always willing to help junior professors with their research and advise them on academic projects. He was one of the most well-liked and esteemed people in this university.”
Bowman was the Reginald H. Jones Professor of Corporate Management and director of the highly respected Reginald H. Jones Center for Management Policy, Strategy and Organization. His research and journal publications focused on the concerns of the CEO, corporate risk, corporate governance and corporate social responsibility, in addition to managerial decision making.
“Even when he was deputy dean, Ned would take frequent walks around campus, stopping to browse in libraries or listen to music at Irvine Auditorium,” says Bruce Kogut, Felix Zandman Professor of Management and co-director of the Jones Center. “He always maintained his interest in the life of the mind.”
Bowman received his undergraduate degree from M.I.T, his MBA from Wharton in 1949 and his doctorate from Ohio State University. He also received an honorary degree from Yale, where he was comptroller from 1966 to 1969. He was dean of Ohio State University’s College of Business from 1974 to 1979.
Bowman came to Wharton in 1983, serving as acting deputy dean for academic affairs from 1989 to 1991. He was a member of the editorial board of the Strategic Management Journal from 1980 until his death.
“Ned was a man of great integrity,” notes Bellace. “He always strove for excellence, and instilled that same drive in those who worked with him. He will be greatly missed.”
Jean Crockett, a well-known economist who was chair of Wharton’s finance department from 1977 to 1983, died last fall at age 79.
She was the first woman to chair a department at Wharton, the first woman to head the Faculty Senate (1972-73) and the first woman to chair the board of the Federal Reserve Bank of Philadelphia (appointed in 1982). She served on the Bank’s Consumer Advisory Council from 1983 to 1988.
Crockett earned a BA, master’s and PhD in economics from the University of Chicago and a master’s in mathematics from the University of Colorado. She joined Wharton in 1954. Her expertise was in the areas of consumption and saving, investment, financial interest rates, markets and the economics of health care.
In 1989, the Association of Women Faculty and Administrators presented her with its Distinguished Faculty Award for her leadership and for her dedication in furthering the careers of junior colleagues and graduate students.
“She and I gave a course in the finance department on the economic/financial problems of cities,” notes Jamshed Ghandhi, director of the Huntsman Program in International Studies & Business. “I appreciated then that she had a deep commitment to social justice and empathy for the poor and the underdog, not in an abstract, academic way but as an activist, one who felt that she, and we, must make a difference in people’s lives.
“But the logical economist was also always there. She never espoused easy, feel-good sorts of policies, but recognized that policies had to be viable to be sustainable, especially in a world of increasing self-centeredness. Jean was passionate in her causes, but always tempered by reason.”
After her retirement in 1990, Crockett continued to work with the League of Women Voters, the American Association of University Women, the Women’s Democratic Coalition and the Chester, Pa., YWCA, where she was a trustee.
A Business-like Approach to Summer School
Leadership in the Business World (LBW), a new program for high school students interested in learning more about business, will kick off this summer under Wharton’s sponsorship.
A total of 50 participants will be chosen for the four-week session to run from June 26 to July 23, 1999. Selection will be based on academic achievement, extracurricular involvement and commitment to excellence.
Classes and other activities are scheduled to take place at Wharton, although students will be housed at nearby Bryn Mawr College.
The program will include classes, trips, workshops and experiential activities designed to teach students about business leadership for the 21st century. The application deadline is February 1, 1999, with selection decisions no later than May 1999. Interested applicants may download the application form at the program’s website: http://undergrad.wharton.upenn.edu.
