News Highlights
Author:
Maha Al-Azar,
Media Relations Officer,
Office of Information and Public Relations,
ma110@aub.edu.lb
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Boston U. dean: Success in business requires an understanding of management systems
 | Lataif
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Becoming successful and effective in business requires an understanding of both the " art and science of business," said Professor Louis E. Lataif, dean of Boston University's School of Management, during a lecture he delivered on May 29 at the American University of Beirut.
Organized by the Suliman S. Olayan School of Business, the lecture which was held at West Hall's Bathish Auditorium, is part of the Salim Kheireddine/Al-Mawared Bank Lecture Series.
While the science of business is covered in academic curricula, the "art of business" is not, said Lataif, defining the "art of business" as the ability to understand management systems, to anticipate the effects of decisions and to have a nose for a certain business.
For this reason, he invited academics to work on developing systems and curricula that would help managers to better measure or predict the organization-wide effects of individual decisions.
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 | Dean Najjar introduces Dean Lataif to audience
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Born in Massachusetts, Professor Louis E. Lataif earned degrees in business from Boston University and Harvard University. The dean of the Suliman S. Olayan School of Business, Dr. George Najjar introduced Lataif as one of the longest-serving deans of one of the top-50-ranking American business schools. Lataif assumed the deanship in l991, after a distinguished 27-year career with Ford Motor Company, having achieved the position of President of Ford-Europe. He is currently working on amending business school curricula so they would teach both the art and science of business.
"Trying to anticipate the knock-on effects of decisions at every level is extremely difficult, but it's essential if we are to manage more effectively," he said, giving several examples of how a single decision could turn out to be costly to a company over time, even though it initially seemed justifiable.
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For instance, Lataif noted how one company had decided to reduce the cost of an exhaust system by reducing the amount of platinum used in the catalytic converter. The platinum reduction saved the company $3 per vehicle, a very significant cost reduction. But five years later, when the cars in question failed to meet emission standards, they had to be recalled at $125 per vehicle!
Lataif also gave the example of how federal tax policy often dictates corporate behavior, noting that a US government decision in 1993 that capped the expensing of executive salaries in excess of $1 million in cash prompted companies to pay executives in stock options, phantom stock units and other non-cash methods. As the stock market soared through the 1990s, the practical effect was to compensate executives far more than would have been the case had the federal government not intervened, he said. "Thus the high stock values established a new high going-rate for senior executives, something which is virtually irreversible."
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Lataif argued that executives should stay in touch with operating managers and even work in the operating arm of the company in order to learn how to make the best decisions for the company. "Yet what top MBA program in Europe or the US advises or encourages its graduates to get a job on the assembly line or in a showroom after they've earned their prized MBA?"
"As you identify people with potential for leadership within your organization, provide them with serious operating experience at every opportunity," he said. "Value execution as much as you would value analysis and administrative ability."
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