DENNIS AIGNER : Quality at Top of Dean’s List : UCI Business School Poised for Prestige, New Chief Says

Dennis Aigner sees Orange County as the perfect laboratory for a management school on the rise.

A high-tech haven with a strong entrepreneurial community and booming business start-ups, the area offers the student with hustle endless opportunities: Internships with high-profile firms. Heart-to-hearts with chief executive officers. Job placement in paradise.

“It’s an environment that, if we play our cards right, could allow us to become a very unusual and very visible business school, where we would draw a lot of attention and a lot of students from outside,” said Aigner, who just finished his first week as dean of the UCI Graduate School of Management.

To date, however, the management school has yet to tap the local business community on behalf of its students, Aigner said, and it is his mandate to change that. While there is much work to be done--from raising money to attracting to top faculty--Aigner has proven that he is just the man to do it.

In 10 years as chairman of the USC department of economics, Aigner turned that department around, pushing it from 53rd in the nation to 30th, according to the Gourman Report, a widely used ranking of graduate and professional schools done by a private consultant.

He hopes to be as successful here. On his third day at UCI, while workmen assembled the desk in his new campus office, Aigner outlined his plans for the young school in an interview with Times staff writer Maria L. La Ganga.

The 50-year-old dean specializes in econometrics, a discipline that uses mathematical and statistical methods to develop and verify economic theories. He earned his doctorate at UC Berkeley in 1963 and has taught at the University of Illinois and the University of Wisconsin.

He also plays a mean bass guitar in a rock ‘n’ roll band when he’s not teaching. He specializes in ballads, he says.

Q: Why did you leave a place like USC to come to UCI?

A: That’s actually pretty easy to answer. I would say for the last five years or so I have considered and have been considered for various deanships--as it turns out, mostly in business schools. For various personal reasons, I just never felt I was quite ready to make the move. And about two years ago, I actually accepted a job as dean of social sciences at Carnegie-Mellon in Pittsburgh and was on my way there, basically spending one week a month in sort of a transition semester between Los Angeles and Pittsburgh. Carnegie is a tremendous academic institution and I just really felt wonderful about it from a professional point of view. But from a personal point of view, I don’t know--after about three months of this I got just to the realization that I didn’t think I could move back there.

Q: Pittsburgh wasn’t for you?

A: It just wasn’t Pittsburgh so much. It’s just that my whole personal life is on the West Coast. Another thing I felt was that I really didn’t know how much I had to contribute at Carnegie. I mean, it’s wonderful going to a place where everybody who’s there is so top-notch. But then, I said, well, what am I going to do. It’s not as if they need to be developed in any particular way. So I was wondering just what my role would be there.

Q: Your role here is pretty well defined: Develop the sort of Graduate School of Management that the university wants but does not yet have. What is that going to take?

A: It’s a situation which is going to require a tremendous amount of energy and ingenuity. This is a small school, and it’s historically been very under-funded and, as business schools go, it hasn’t been doing a lot of things that it should be doing. One of the primary reasons it hasn’t been is that it’s been understaffed and has had really no discretionary resources to speak of to do anything else.

Q: You arrived at USC in 1976 with a mandate--like the one you have now--to build and change the economics department, of which you subsequently became chairman. What shape was USC in when you got there?

A: When I was an undergraduate at UCLA, USC was the pits academically. USC has some good professional schools, but at that time I think it was true that academically it was not very strong. At that time the economics department was about 12 people and in the sort of national rankings was ranked 53 (according to the Gourman Report). In words, that would be called adequate or something, not even good. And one of the things that was missing there, which I think is in part missing here at UCI, was infrastructure for research, extra money available to support things like distinguished visitors or outside speakers or to support research publications, computing. Basically, the department was small and struggling for resources. Nobody with any sense would invest any resources in it anyway because it wasn’t going anyplace. In any event, it was a situation where you had a quite weak department in terms of money, faculty, facilities, everything, quality of the students, the quality of the program.

Q: What did it take to change it?

A: It did have all the ingredients of being able to do something. My view was that through growth we could make the department really excellent, convince the people who weren’t producing research, who were the legacy of the department, that being a part of this new thing was an exciting thing to do. Even if they weren’t doing good research, they could become very useful in other ways, running an undergraduate program, teaching, if they were good enough. We were able to bring in lots of distinguished visitors, both from the U.S. and overseas. We brought in a lot of people from Europe.

Q: How would you characterize UCI’s Graduate School of Management today?

A: There are parallels with USC when I first got there. The management school here is very small now, and even after it gets to its next level--which is kind of what I have been asked to do--it is still going to be very small compared to any major business school. The fact that it’s small is similar. The fact that there are not a large number of tenured faculty is both a strength and a weakness. It’s a weakness in that the school has relied in the past on--a lot of time--on the part of its junior faculty for doing things like committee work when in fact the junior faculty should be spending most of their time doing teaching and research in order to develop their careers. But it also is an advantage. There is no legacy of non-productive people. You can just take what’s here and work with it.

Q: It has been said that the Graduate School of Management as it stands now is not one of the stronger departments in UCI, that it’s somewhere between mediocre and bad. Are these cheap shots or do they have validity?

A: How justified that is, I really couldn’t say right now. If you want to look at the standard rating report on schools of business--which people often pooh pooh because the way these ratings are developed--nobody actually knows, the school was ranked 63 out of 100. On this same set of ratings, USC’s business school is ranked 30. People would probably be quite happy if within a reasonably short period of time we were able to bring UCI’s reputation up to that of USC. That’s a pretty big jump.

Q: What are the strengths of the Graduate School of Management?

A: In terms of strengths in the traditional areas of business, I would say that the two major groups that have national and international stature are organizational behavior and management information systems--computing, information processing. UCI itself has a very strong computer science department, and one of the people in the management information systems area within the management school is actually head of the computer science department, John King. One of the senior professors named Ken Kramer, who also directs an institute on campus called Public Policy Research Organization, he and King have had great success in raising National Science Foundation grants and other types of general research funds to support a lot of stuff in computer technology, dissemination, technology, processing. That’s definitely a strength of the school that can be built on and used.

Q: And its weaknesses?

A: In all the other areas, there are people who are good or excellent, but they are so small that they have no critical mass. While if you ask an outsider who’s at UCI, they would probably know the name of somebody senior in their area, that would be the end of the story. Take the Big Three: accounting, finance, marketing. We have no tenured member of the faculty in finance. We have an associate professor in accounting, one, and we have an associate professor in marketing, one. That’s it. That’s not much.

Q: That’s the faculty. What about the program?

A: We have a program which is not fully fleshed out, and because the faculty is so small we can’t offer everything that we really should offer by way of electives for MBAs. In some of the areas, for example real estate, what I heard the other day is that we have to send people up to UCLA to take real estate courses. This is crazy. That’s something we’ll move on very quickly, try to bring into the curriculum a serious set of options in real estate development tied into the MBA program, so that we have a degree which I think would be taken seriously on the outside.

Q: What obstacles does the management school face in building its program to the desired level?

A: The price of outstanding people in a management school environment is very high. It’s higher probably than any other area within the university. In order to hire a senior faculty, and I’m talking about a distinguished full professor, bring a name here, I would have to have in place an endowment that would earn enough income, say $40,000 a year, to hand to this person and say, ‘OK, here’s your package of goodies. You can take a couple of months of summer salary out of this, you can support a research assistant to help you do your stuff and here’s a nice little travel and expense fund for you to go traipsing off and making yourself and UCI great.’ It’s become so commonplace that it wouldn’t even be worth my talking to anybody at the level I’m expecting to hire without having these things in place.

Q: But there has been some progress to date, right?

A: Right now, the school has two such endowments. But neither of those is at the funding level that I’m talking about. I’m really talking about having to have in place something like $750,000 each for these things. Right now they’re not here.

Q: How many such positions do you want to have?

A: My guess is that initially in order to get the thing really rolling I probably have to have four, three or four.

Q: How long do you think it will take to achieve the desired changes?

A: To achieve the results I told you about at USC, it took us 10 years. My guess is we’re talking about five years for the first plateau.

Q: That plateau is getting four distinguished professors and what else?

A: Growing to a faculty of about 40 or slightly more. I not only have to raise the endowment money--$3 million--I have to recruit the people. I’ve already started to do some of that on my own, just people I think are of the caliber that we would like to have here. But right now I don’t have the endowments in place. It’s kind of a Catch-22. In one sense, there are good reasons why these endowments are not in place. That is because the school has not been able, really, to fulfill one of its main missions as a professional school, and that is a relationship with the local business community.

Q: Why do people come here for business school?

A: Probably because they’re in the local community. This school is ranked 63rd. USC is ranked 30th. UCLA is ranked about 12th, something like that. If you have an option, why would you come here? But people do come here. If you look at it on paper, the MBA curriculum here looks perfectly OK. But it doesn’t look particularly special. Right now, as I say, I think most of the people who come here for MBAs come because they’re in Orange County and it’s more convenient and it’s an OK program and, by the way, it’s Orange County, so why wouldn’t a degree from UCI, which is also in Orange County, be OK. Whether that’s realistic thinking, whether it’s even typical thinking, I don’t know.

Q: Since the October stock market crash and the Wall Street insider trading scandals, many schools are reporting that their business school enrollments have dropped. Are you finding that that is happening and for those reasons?

A: Yes, and I think also there is a saturation factor too. Superimposed on that is the fact that in some areas of business, I think employers have found that the extra cost of an MBA is not worth the value added. A student comes to an MBA program with certain expectations of what they’re going to get paid, right? At Harvard, you go out expecting you’re going to get $50,000 just to start. Students at UCI certainly don’t have those expectations. In fact, I was amazed to hear what some of the numbers were. I heard somebody who thought that, “Wow, if we’re getting $25,000, we’re doing OK.” I don’t regard that as very high expectations.

Q: Why has the MBA lost its luster?

A: I think it goes back to this very technical, narrow orientation. I think if the MBA is going to regain its luster, a number of different things about it have to change. Rather than more narrowness in any one of the functional areas of business, employers are looking for more breadth. It’s like going back to the liberal education stuff. You’ve got to provide still the technical education that distinguishes the MBA, but you need also to produce people with a much wider-ranging appreciation for society, government, business in a broader context.

Q: A lot of MBAs coming out of graduate school now want to become financial wizards or go into esoteric product planning instead of manufacturing, engineering--the backbone of American business through the years. Do you see that as the case and how can that change?

A: This is probably the product of the Wall Street wizards who make it look like you can become a billionaire overnight if you just roll the dice right and isn’t that an exciting way to live your life rather than working for a living. I think we have a problem with, again, what we are trying to do in business.

Q: How so?

A: I see all that Wall Street stuff as feeding a real delusion about what is productive economic behavior. I view that as total speculation, speculative behavior. That doesn’t add to the GNP. That doesn’t improve America’s competitive ability. That’s nothing in the bigger picture. That’s just a blip on the screen, it’s Las Vegas. But a lot of people are turned onto Las Vegas. They still go up there and pull the slot machine handles all the time. So I do think there is an issue here that is more than just an MBA-education type issue. It’s the attitude of American business toward the future and how we are going to regain some competitive edge in a lot of industries where we’ve lost it.

Q: How can you get people back to management basics, and how do you perceive those basics?

A: I think we’re talking about management of productive resources, whether they be people or robots or dollars or whatever. We’re talking about training people who are more facilitators, managers in the sense that they’re able to bring together groups of people, resources of various sorts, to produce a product that’s competitive in the world market. I think it’s emphasizing, in addition to the traditional skill, more lateral skills, a more holistic approach.

Q: Do you feel that business schools have the responsibility to bring ethics into the classroom, and, if so, are they fulfilling that duty or not?

A: That’s a hard question. I would be disappointed to learn that we had to teach ethics. It disappoints me that we have to somehow talk about that. I just sort of see that as a value that I would like to have as a common denominator in anybody. Yet, I’m not being realistic when I say that, because we can observe in the world out there that a lot of “business” or “deal making” is done without a high ethical standard being applied. My concern is that when you start thinking of doing these things that are somewhat remedial with students who are 24 or 25 or older, what is there that we can really tell them about ethics? Probably it’s either there or it ain’t.

Q: Do you think there is any way in which a university’s involvement with the business community gets too close? Its agreement with Hitachi and Nelson Research makes UCI one of the few schools in the country to invite corporations to build on campus and directly tap faculty resources. Is that a problem?

A: That’s a program which I think is going to be a great asset, the idea that the university will develop these joint relationships with industry who want to build research facilities contiguous to the campus and to have direct involvement with professors in the departments on campus. I think it’s a great idea, it’s worked well in other contexts and we have the land to do it. It has to be monitored carefully, but I think in principle it’s a really terrific idea.