August 2005

Addressing Electronic Business, Phase Two

When the Center for Electronic Business and Commerce opened its doors in 1999, cofounders Garth Saloner and Haim Mendelson took the unusual step of setting a deadline for its demise: 2005. The decision surprised many, for in the height of the dot-com boom, commentators were predicting that new electronic firms were so revolutionary they would topple some of the world’s most recognized corporations and therefore, perhaps, academic disciplines.

“In 1999, we didn’t heed the calls to establish electronic business as a separate field of study. Instead, we integrated it with the School’s traditional teaching and research programs,” Mendelson says. “In 2001, we were contrarians again, organizing the ‘Don’t Bury E-Commerce Just Yet’ conference, where we predicted that electronic business will continue to create value and, slowly but surely, transform firms, industries, and value chains. This transformation is indeed continuing, changing the ways we communicate, pay bills, book travel, and listen to music.”

Keeping to their word, Saloner and Mendelson closed the center this year but not without a report that outlines how its impact lives on as planned, in a thousand ways.

By partly supporting 35 faculty, the center created knowledge in the form of 54 published research papers, seven Stanford business courses that focus on electronic business, and electronic business concepts incorporated into another 66 across school disciplines. In addition, the center helped produce two textbooks and 130 teaching cases involving electronic business issues that are used worldwide. “While the full extent of the dissemination of these ideas cannot easily be tracked, we know that the center’s case studies have been used by more than 300 universities,” Saloner says. Stanford executive education programs, on campus and abroad, and news media, have also made heavy use of this new knowledge.

“Industry’s experience over the past five years reinforces the center’s founding philosophy that electronic business can create value only when it’s integrated with the fabric of business,” Mendelson says. “Firms are using the Internet to augment their central nervous systems, changing their business processes and linking directly to customers, suppliers, and business partners. And yet, the most important contributions to value and competitive advantage come from the integration of technology with people and organizations, and from weaving technology into companies’ traditional strengths.”

Saloner adds that the School will continue to research and teach about electronic business as part of its ongoing core frameworks. “During the frenzied early years of the e-commerce boom many observers thought that the traditional rules that govern business success had been suspended. By rigorously applying our disciplinary frameworks we were able to help our students dig below the surface in analyzing companies like Webvan, Amazon, eBay, and Google to figure out the true bases for competitive advantage in electronic business. That is always part of our mission.”

Members of the American Academy of Arts and Sciences have made economist John Roberts the 15th current member of the Business School faculty to be inducted into the 225-year-old learned society.

The Business School faculty also honored Roberts this year with the Robert T. Davis Faculty Award, which recognizes a faculty member’s career-long contributions to the School. (Davis, who died in 1995, spent 37 years on the School’s marketing faculty.)

Also elected to the American Academy of Arts and Sciences this year were Donald E. Graham, SEP ’83, and, as a foreign honorary member, Paul Klemperer, MBA ’82, PhD ’87. Klemperer is the Edgeworth Professor of Economics at University of Oxford, and Graham is the CEO and president of the Washington Post Co.

The academy is composed of the world’s leading scientists, scholars, artists, business people, and public leaders. Other Stanford Business School faculty who are members are Jonathan Bendor, David Brady, Jeremy Bulow, Alain Enthoven, Michael Hannan, Keith Krehbiel, David Kreps, Edward Lazear, James March, William Miller, Paul Romer, George Shultz, Michael Spence, and Robert Wilson.

Roberts is the John H. Scully Professor of Economics, Strategic Management, and International Business, the School’s senior associate dean for external relations, codirector of the Center for Global Business and the Economy, and director of the Global Management Program within the MBA Program.

Alumni to Know

Faculty

Newsmakers

Faculty awards and honors were numerous this year. One that this magazine has not previously reported is a Health Care Research Award from the National Institute for Health Care Management for Daniel Kessler, professor of economics, law, and policy. Another is a doctoral fellowship at Carnegie Mellon University named in honor of Seenu Srinivasan, the Adams Distinguished Professor of Management.

Anat Admati, the Joseph McDonald Professor of Finance and Economics, was elected a fellow of the Econometric Society. Margaret Neale, the John G. McCoy–Banc One Corporation Professor of Organizations and Dispute Resolution, was elected to the Society of Organizational Behavior. Joanne Martin, the Fred H. Merrill Professor of Organizational Behavior, received an honorary doctorate from the faculty of social sciences at the Free University of Amsterdam, and she also was named a distinguished scholar by the Organization and Management Theory Division of the Academy of Management.

Evan Porteus, the Sanwa Bank, Limited, Professor of Management Science, was elected a fellow of the Manufacturing and Service Operations Management Society during the 2004–05 academic year. Porteus joins two other GSB faculty members, Hau Lee and Larry Wein, in this distinguished group. With a dozen such fellows in the world, the School’s faculty has a quarter of the total.

Lee, the Thoma Professor of Operations, Information, and Technology, was honored this year with a McKinsey Award for a paper in the Harvard Business Review that demonstrated excellence in management thinking. The second place award for a 2004 paper in that publication was for “The Triple-A Supply Chain,” published in October 2004.

Faculty members Jennifer Aaker and Peter DeMarzo were appointed to endowed chairs in April. Aaker became the General Atlantic Partners Professor of Marketing, a chair that became available as a result of Haim Mendelson assuming the Kleiner Perkins Caufield & Byers Professorship, which had been occupied by Charles Holloway until his retirement in 2004. DeMarzo was named the Mizuho Financial Group Professor of Finance, formerly the IBJ Professor.

Two faculty also were named to newly endowed leadership positions in the Center for Leadership Development and Research. Charles O’Reilly was named the Hank McKinnell–Pfizer Inc. Codirector of the center and Deborah Gruenfeld was named the Morgan Stanley Codirector.