Leadership Spotlight

Research Impacting Financial Institutions: Michael Goldstein, Associate Professor of Finance, Babson College

For Michael Goldstein, the idea of a career in academia began percolating during a Wharton undergraduate work-study research project calculating bank capital requirements for then- Finance Department Chair Anthony Santomero.

Goldstein, W'86, WG'91, WM'92, GrW'93, had done it all as an undergraduate work-study student, from the night watch at McClelland Hall to helping faculty and staff learn Lotus 123, an early computer spreadsheet application. Santomero, whom Goldstein had worked with since his sophomore year at Wharton, asked Goldstein to examine the nation's top ten banks' solvency under old versus new capital requirements. "It was the first real research project that I'd done," says Goldstein, now a finance professor at Babson College. "And I liked it. And I think Tony thought I was good at it."

When Goldstein went off to Wall Street after graduating a year later, he began thinking about returning to Wharton for an MBA or, perhaps, a PhD. He called Santomero (then Vice Dean and Director of the Wharton MBA program and now the president of the Federal Reserve Bank of Philadelphia) to discuss the idea with him, telling him he was considering applying to some PhD programs. "Within a split second, Tony said, ‘If I got you money, would you come here?' I thought, ‘Wow, yeah, sure.' But I stopped myself, thinking that that wouldn't show him I'm a very well-trained Wharton graduate. So I said, ‘I'm inclined to, but it depends on the terms.'"

Ultimately, Goldstein returned to Wharton as the School's first Geewax-Terker Fellow, maintaining a breakneck pace as a graduate student. He wrote a column for The Daily Pennsylvanian and served on the University Council, the Provost's Committee for Academic Planning and Budget, the Trustee's Committee for Student Affairs, and the Safety and Security Committee. He also produced several plays, created and was President of the Wharton Doctoral Council and was elected the chair of the Graduate and Professional Student's Association, representing 11,000 graduate and professional students at Penn. "When I came back as a grad student, I had a lot of freedom because I knew where to eat, where to go, and what to do," he says. "I already knew the community, and so I became very involved in community things."

After a year or so in the PhD program, Goldstein noticed that many of the School's most successful finance professors had MBAs in addition to their PhD. He also felt uncomfortable potentially conferring a degree he didn't have. He applied and eventually began the Wharton MBA program while a doctoral student, earning his MBA in 1991, his MA in finance in 1992 and finally his PhD in 1993, giving him an impressive total of four degrees earned from the Wharton School. He first joined the faculty of the University of Colorado at Boulder, then in 2000, Goldstein returned to his native Massachusetts to join Babson. He has also served as a Senior Fellow at Wharton's Financial Institutions Center. Goldstein's research focuses on market microstructure, privatization of formerly communist countries, and real estate. He's perhaps most proud of a widely cited measure he helped create with his dissertation adviser, Wharton finance professor Marshall Blume, that is now used by all major markets as mandated by the U.S. Securities and Exchange Commission (SEC). Goldstein then wrote his dissertation using this measure to examine the differences in trading costs between the NYSE and NASDAQ, paving the way for an eventual SEC investigation of NASDAQ, an investigation that led to regulatory changes. "It's all because of Tony, really," Goldstein said. "Had he not given me good research projects as an undergrad I wouldn't have started thinking about becoming a professor. He was always behind the scenes taking care of things, pushing me along in good ways."

Today, Goldstein, 40, spends the first 30 minutes of his class talking about The Wall Street Journal, as Jeremy Siegel does. "He (Siegel) teaches an amazing MBA class where he talks about the markets," Goldstein says. "It's so outstanding that a lot of MBA students who have already taken the class come back for the first 10 minutes of his lecture just to hear him give the market overview. I have emulated this approach, talking about what's happening in the markets for the first 10 minutes of my classes, because people are drawn to that information. And why not learn that way—why not be drawn in by what is relevant, today."

From the Business Environment to Academia: Margaret Cording, Assistant Professor of Strategy, Organization and Environment, Rice University Graduate School of Management

Margaret Cording was ready for a change. She'd become a Managing Director for Chase Manhattan (now JP Morgan Chase) and had survived two mega-mergers in the span of four years. But just shy of 40, found herself intellectually bored and feeling somewhat sheepish about her contribution to society.

For more than a year, Cording, WG'89 (WEMBA), had been asking herself "If not this, then what?" and found that academia continued to top her career-change wish list. She had been exposed to business research through her Wharton professors, and it continued to intrigue her. "It's the only profession that I'm aware of where you can pursue the questions that you are interested in—where no one else one is setting your intellectual agenda," Cording says. "And the idea of teaching and providing that service, benefiting others through my experience, was compelling to me. And so I decided to take the leap."

Just prior to taking that leap, however, Cording returned to Wharton to meet with her former Wharton economics Professor David L. Crawford, who took her to lunch at the Faculty Club and gave her a reality check about her somewhat naïve view of academic life—a meeting she remains "eternally grateful" for. "He said to me, ‘Margaret, do you really think we sit around thinking big thoughts?' And I said ‘Well, yes, I guess I do, Dave.' He was very forthright with me about the realities of academic life, which allowed me to make a much more educated decision."

That was in 1998, and today, Cording just finished her second year as an assistant professor of strategy and environment at Rice University's Jesse H. Jones Graduate School of Management. At Rice, Cording finds herself on the other side of the executive MBA equation—this time, as teacher. "I felt that my professional experience would help me tremendously in translating strategy and ethics theory into something that an executive could understand," Cording says.

At Wharton, Cording opted for the MBA Program for Executives (then known as WEMBA) because she didn't want to disrupt her career, a choice she now believes was formative in her career evolution. A 29-year-old New York investment banker at that time, Cording assumed she would always be an investment banker. But her Wharton courses, she found, piqued her interest in general management and the complexities of running a business. Cording recalls a Marketing Strategy course taught by Tom Robertson that "wasn't just about the four Ps. It was a much more complex value proposition that one needed to wrestle with, and I was really drawn to the complexity of the decision process in business."

"When I came out of the program, I went to the senior manager that I respected the most and basically told him that I wanted to change my focus. It really triggered a career change for me."

The senior manager was Donald Layton, who retired last year as vice chair of JP Morgan Chase. Cording became Layton's senior staff person and began traveling the world to the bank's underperforming units, creating an internal strategy group that overhauled the laggards and improved productivity and efficiency of a diverse set of businesses, including capital markets globally and wholesale banking activities in Europe and Asia. "We really turned around the performance of those units," Cording says, "and that was a wonderful introduction to how to run a business." As Managing Director, Cording ran Chase's Foreign Exchange Sales business.

Intrigued by the notion that business, boiled down, is about getting people to work together toward a common goal, Cording chose to study strategy and business ethics as a PhD candidate at the University of Virginia's Darden School. As her career has evolved, Cording has developed a particular interest in mergers. Her research focuses on the role of organizational integrity—defined as consistency between espoused and enacted organizational values—in influencing performance outcomes of mergers and acquisitions. This definition of integrity, she argues, is a foundational ethical and strategic issue because it captures the concepts of promise-keeping, trust and stakeholder cooperation.

A Los Angeles native, Cording, 47, grew up the daughter of a serial entrepreneur whose start-ups included successes and failures. "My father was horrified when I graduated from college and announced I was going to work for a major global bank in New York City," Cording said. "He said to me, and I'll never forget this, ‘Margaret, before you know it you're going to be attending meetings just to decide whether to hold the meeting.' Six months into the job I called him and said ‘You know, you were right.'"

"I love my job," Cording says of her switch to academic life. There are times, though, while teaching executives and listening to their war stories, that she misses the adrenaline rush of the corporate M&A world. "I'm grateful that I get to work with executives and stay in those conversations. Especially because of my experience at Wharton, teaching the executive MBA students is especially gratifying. My years in industry allow me to teach in a way that applies theory to practice, and the students really benefit from that," Cording says. "And in my research, the question that I constantly ask myself is ‘How can this line of inquiry affect the practice of business?' Esoteric research is really not for me. I try to ask and address questions that are pressing concerns to senior managers."