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The HBS Story

Harvard was considering business training as early as 1885.

University President Charles W. Eliot felt that Harvard should offer more training and guidance to its college graduates, particularly since increasing numbers of them were entering careers in industry and finance rather than the traditional careers of ministry, law, medicine and education.

The Spanish War in 1898 and the beginning of the Roosevelt era brought with them the prospect of an American Empire. It was “commonly supposed that there would be a great future demand for university-trained colonial administrators, diplomats, municipal experts and civil service officials.”

Originally proposed as a school of Public and Business Administration, Harvard Corporation voted to establish a Department of Business Administration in 1908. Professor Edwin F. Gay was appointed dean and the School opened in October of that year with 33 regular students and 47 special students, taking only certain courses.

The School did not, however, open as an autonomous entity. Rather, it was started on an experimental basis as a Graduate department under the Faculty of Arts and Sciences. At other American universities, business had always been taught at the undergraduate level, with occasional provision for supplementary graduate courses. Harvard, consistent with its avowed purposes of establishing business as a profession, was a pioneer in requiring a college degree for entrance.

Introducing the Case Method

As one Harvard professor noted, it was “a delicate experiment.” After the first-year experimental period elapsed, the Business School officially became a graduate professional school of the University. During his 11 years in office, Dean Gay developed most of the policies that form the core of the Business School as we know it: The first “case” was used for instruction in 1912 and a tremendous emphasis on field research was introduced; the joint Ph.D. in Business Economics was established in 1916.

The “problem” method of instruction (as the case method was then called) was patterned after the case method of teaching law and the clinical method of teaching medicine. Since business records were not nearly as available or accurate as legal or medical records, the Business School focused on conducting field studies and developing the first case studies. In 1924, the case method was established as the primary method of instruction.

In 1919 Wallace B. Donham, a prominent Boston banker, became Dean of the school and was greeted by problems of all sorts. Enrollment had jumped unexpectedly to 412, almost twice the pre-World War I high. The faculty was but a skeleton. Classes were scattered all over Harvard Yard. The School had little money. Its curriculum lacked direction and its business connections were weak.

Over the next few years, Dean Donham overcame these difficulties. In 1920 a program of “study groups,” equivalent to the present system of area concentrations, was developed. By 1923 a standard first-year program had evolved requiring students to take introductory courses in each area of business: Finance, Industrial Management, Marketing, Accounting and Statistics.

Meanwhile, the second-year Business Policy course was redesigned to provide a framework for the second year of study. Special sessions for businessmen, foreshadowing the current executive education programs, were also instituted. The doctoral program was established in 1922 and the Harvard Business Review was founded the same year.

But the most pressing problem facing Dean Donham was the need for better physical facilities. In 1923, a fundraising campaign was launched to raise $5 million. The committee approached George F. Baker, president of the First National Bank of New York. Perhaps Mr. Baker would take the lead, they hoped, with a gift of $1 million. A donation from so respected a leader in the business world would surely inspire confidence and prestige.

The eminent Mr. Baker responded with the following: “For a time I was interested in the proposition you put before me. But as I have thought it over again, I have lost interest in the idea of giving one million and I am not going to do it. And I don’t care to give half a million either . but if by giving five million dollars I could have the privilege of building the whole school, I should like to do it . But I want to do it alone . Will the Corporation let me?”

The gift was gratefully accepted and a site was chosen across the Charles River in Boston for the construction of a new facility. When the facility was opened in 1926, 750 students moved into the five dormitories. A sixth dormitory, the library and the administration building were completed the following year. The dormitories were named Chase, Gallatin, Hamilton, McCulloch, Mellon and Morris, after six famous secretaries of Treasury. The library was named after George F. Baker and the administration building after his close friend and partner, J.P. Morgan.

The expense of building special foundations for the boggy ground curtailed construction of the planned counterpart of Morgan Hall. Classes were held in Baker Library for many years.

The Depression brought an era of censure and criticism to the Business School. When the School celebrated its 25th anniversary in 1933, the cynical newspaper headlines read “$15,000,000 Baby to Have Big Birthday Party.” One critic publicly attacked the HBS case method with a claim that reflected the despair of the period: “In the last analysis [it] places enormous power in the hands of irresponsible business men.”

Wartime Changes

In 1941, Donald K. David (HBS ’19) became the new dean. The U.S. had just entered World War II and the Business School was facing a major crisis, whether to continue operations or disband for the duration of the war. The new dean’s decision was to continue to operate and to assist the war effort in every way possible.

In 1942 all prospective first-year students were required to sign a statement agreeing to accept a commission in the armed forces, if offered, or a position in a war industry or allied work. In June 1943 all regular civilian instruction was suspended and the School became in effect, a military academy. In 1943, the Advanced Management Program was begun as a wartime management-training program; in total 5,921 military students were involved in war training programs.

After the School resumed its civilian MBA program three years later, three executive education programs were instituted: the Advanced Management Training Program became a regularly scheduled part of HBS in 1945, the Trade Union Program in 1948 and the Program for Management Development in 1954. Courses in the first-year MBA curriculum included Administrative Practices, Control, Finance, Marketing, Production, Public Relationships and Responsibilities, and Report Writing.

The growing number of students necessitated the further expansion of the School’s physical plant and Dean David soon embarked upon another quest for funds. John D. Rockefeller, Jr. provided funding for the new classroom building in 1949 and the building was named in memory of Mrs. Rockefeller’s father, the former Republican Senator from Rhode Island, Nelson W. Aldrich.

The following year the School received a gift from Sebastian Kresge, the variety store merchant, for the construction of a new dining hall.

By 1955, when Stanley F. Teele (HBS ’30) took over as the next dean, the Business School’s financial position was finally secure and the long-needed physical improvements had at last been achieved. The new dean therefore turned his attention to the MBA curriculum. Increased emphasis was given to quantitative techniques, social sciences, automation and international concerns.

Doors Open to Women

In 1959, women graduates of the Harvard-Radcliffe Program in Business Administration were admitted to the second year of the MBA program; the first woman was admitted to the DBA program in 1959 an
d to the Advanced Management Program in 1962.

George P. Baker, no relation to the bank president and benefactor, succeeded Dean Teele in 1962. The impact of Baker’s Deanship was felt in many areas. The first-year MBA curriculum underwent major reorganization. New courses were introduced in Managerial Economics, Human Behavior in Organizations, Organizational Problems, and Planning in the Business Environment. Management Simulation Sessions, forerunner of “the business game,” were begun.

In 1963 women were admitted for the first time into the first-year MBA program. In 1964 the School added its first computer in Baker Library. During the next four years the campus was expanded by the addition of Dillon House in 1965, Humphrey House in 1966, McCollum Center, Baker Hall, and Cotting House in 1969; endowed professorships nearly doubled.

Lawrence E. Fouraker was appointed the Dean in 1970, the same year Teele Hall was built. In 1971, Burden Auditorium was built; in 1974 Cumnock Hall was built and a renovation program on older buildings was started. Business, Government, and the International Economy was introduced as a first-year course in 1978.

John H. McArthur (HBS ’59) was named Dean in 1980. During his tenure, significant changes were made to the curriculum: the GMAT was dropped as a requirement for admission to the MBA program in 1985; Decision Making and Ethical Values, DMEV, was added to the first-year curriculum in 1988 as part of the school’s ethics program, endowed by former SEC Chairman John S. R. Shad (HBS ’49); the Leadership and Learning initiative was started to review and revamp the MBA program in 1992.

In addition, significant changes were also made to the facilities: the architecturally renowned Shad Hall was dedicated in 1989; Morgan Hall and Baker West were renovated and the Class of 1959 Chapel was completed in 1992.

In 1995, Kim Clark, Harry E. Figgie, Jr. Professor of Business Administration and Chair of the Technology and Operations Management Department, was appointed the Dean. Since assuming this post, Clark has focused on improving the technology infrastructure at the school, instituting curriculum changes like the Foundations series of courses and a more cross-functionally integrated curriculum.

July 2, 2001
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