The new Said Business School has had a rocky start. But its acting director is confident that the future will be bright.
As a press release, it was a masterpiece. The first director of Oxford University's two-year-old Said Business School was "to step down from his post after seeing through the foundation and establishment of the school." You would never know that Professor John Kay had worked just two years of a five-year contract, clashed with the university administration, struggled to do two jobs (he also runs a high-profile consultancy), resigned suddenly, and disappeared on holiday for the whole of his notice period.

You might have guessed something was afoot from the fact his resignation was announced in June, yet there'll be no permanent replacement until after Christmas. The most likely candidate is Professor Anthony Hopwood, the first director of the school's MBA programme, who is now the school's acting director. He hopes his appointment will be made permanent - "I'd love to do it" - and sees a splendid future for the school.

He's worked hard to mend fences with the university. He is sure, he says, Professor Kay's leaving was not over his quarrel with the university, but because he couldn't do the two jobs effectively: one had to go. The disagreement was about the school's insistence that it could not be bound by the university's salary scales. Professor Kay insisted a business school had to pay whatever was needed to attract the very best people. Salary scales are fine for other disciplines, but not for business faculty, he said. Professor Hopwood approaches the issue more emolliently.

"A lot of goodwill has been shown by the university", he says. "Oxford realises it has to move on the salaries issue across a broad range of subjects. It is not just the business school - economics is another subject with many vacancies. At the business school we have been successful in getting very good people. [Nonetheless] we can't recruit in all subjects at a full international level without more flexibility." The vice chancellor, Dr Colin Lucas, may want to hold off doing a special deal with the business school in case it spoils his chances of getting a university-wide deal on pay.

The business school, meanwhile, has some flexibility, but not as much as it wants. "It was always going to be complicated here because of the sort of place Oxford is," says Professor Hopwood. "It's democratic, it's lateral, it's conversational." The nature of Oxford helps staff recruitment as well as hinders it: "Some people find it very attractive to have Oxford collegiate life and a business school too." That may be one reason why it was the last of the world's great universities to acquire a business school, except for Princeton, still without one. It was controversial right up to the last fence: when the Congregation voted in June 1997 to establish a world class business school, there was still significant opposition and the vote was carried by 342 to 55. But Professor Hopwood counts being a part of Oxford as a great bonus. There is something special about a business school being attached to a university. "Most major European business schools are stand-alone institutions," he says. "Our involvement with the wider university means that we can build on links with scientists, lawyers and others, which is much harder for places like London Business School, Insead or IMD. I want to make this the major university-based business school."

Professor Kay's departure was not the only problem to hit the infant institution. Fundraising has not been going quite as well as expected. Syrian businessman Wafiq Said put up the first pounds 20m in 1996. That was why, the next year, the relatively modest Oxford School of Management Studies, created in 1990, was turned into the expensive and ambitious Said Business School. But Mr Said's donation was given on the understanding that the university would obtain a matching pounds 20m. So far it's raised almost pounds 13m. The biggest donation is from Lord Sainsbury: the amount is secret but thought to be pounds 4m-6m as the library will be named after him. The Said Business School Foundation trustees' chairman, Sir Charles Powell, one time policy adviser to Margaret Thatcher, has called fundraising "disappointing" - but Professor Hopwood insists the full pounds 20m will be raised. In fact, he is resolutely upbeat about the way things are going on all fronts.

More than half of Oxford's colleges now have management fellows. MBA applications for its third year are 300 per cent up on last year, and the school is able to command the highest GMAT (graduate management assessment test) score in Europe. It plans to more than treble the number of full- time MBA students to 200 by the 2001, and if Professor Hopwood has his way it'll introduce a part-time MBA too. It has 50 graduates doing research degrees or taught masters and 290 undergrads reading management studies as part of a combined degree - one of the university's most oversubscribed undergrad courses.

And in March 2001, it'll move out of Oxford's Radcliffe Infirmary and into its splendid new building - yet another slightly sore point. Originally the business school proposed to build on a green field site in the centre of Oxford, on which the university had given an undertaking that no building would ever take place. The present site, opposite Oxford railway station, meant pulling down of a listed building - the old wooden London Midland and Scottish station, now re-assembled at a museum.

The school's troubles - over fundraising, its director, its allegedly insensitive building proposals - are, Professor Hopwood hopes, over. He now wants to develop a clear academic direction. "We are going to focus on those aspects of management and business that have become knowledge intensive," he says, adding, perhaps hopefully: "We are in a good strategic position for the next few decades."

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