Welcome Back To Oxford, Mr. Kay. Here Are Your Boxing Gloves

The head of a fledgling B-school steps into a fine fracas

John A. Kay is a marked man. As one of Britain's leading economists, the 48-year-old professor has tried to steer clear of the rough-and-tumble of British party politics--sticking to the more subdued world of academia, think tanks, and consulting. It's not that this sharp-witted don lacks strong opinions. Far from it. "I'm just not a political person," he insists.

If that's the case, Kay could be in for some hard lessons. As the new director of Oxford University's School of Management Studies, he's wading into the thick of a bitter political battle over the business school's existence. Its first class of MBA students arrives on Oct. 7 (table). He's also under attack by Tories for being a guru to Labor Party leader Tony Blair, who has adopted Kay's ideas about turning Britain into a "stakeholder economy." His clout with Blair has led some to speculate that Kay could be in line for a high-level post in a Labor government.

YOUTHFUL PRODIGY. Meanwhile, Kay will need a clear head in his new position. Such well-known Oxford dons as the zoologist Richard Dawkins have vowed to oppose the university's acceptance of a $31 million gift from controversial Syrian-born arms dealer Wafic Said to construct a building to house the management school. Without this donation, which obliges Oxford to rename the program the Said School of Management Studies, the enterprise could founder. In November, Kay plans to argue in favor of accepting the donation when it comes up for a university-wide vote.

Although Kay hasn't taught full-time at Oxford since the late 1970s, he has kept in close touch. A Scotsman, he was appointed to the equivalent of a tenured professorship at Oxford's St. John's College at 21, and he remains a fellow. In the early days of his consulting firm, London Economics, Kay and his partner, C. Nick Morris, recruited other former Oxford colleagues such as Nick Stern, now chief economist at the European Bank for Reconstruction & Development, and Les Hannah, acting director of the London School of Economics.

But Kay's connections won't change the fact that Oxford is late getting into the MBA game. In the past, the university authorities didn't consider management studies a proper subject for study. But in the early 1990s, following Cambridge University's lead, Oxford finally voted to set up an MBA program. It's entering a hotly competitive market. Some 120 British schools now offer MBAs, up from around 20 in the early 1980s.

Still, rival B-schools aren't exactly dismissive. "Oxford has one major thing going for it: its brand name," says George Bain, principal of the London Business School, where Kay has been a visiting professor. Kay's academic heft should help. His Foundations of Corporate Success, published in 1993, argues that a company's network of social and business relationships is a key, sustainable advantage. Building on that idea, Kay has become an advocate for the "stakeholder economy," emphasizing the importance of the social context of markets. After a private meeting with Kay late last year, Blair began arguing that companies and countries are responsible to everyone who has a stake in their success: workers, managers, customers, and shareholders.

POWER BROKERS. Kay's renown is winning him more and more friends across the political spectrum. That became clear in mid-September: To celebrate its 10th anniversary, London Economics threw a bash in a nearby art gallery filled with Old Master paintings. The 300 guests included many of Britain's most influential thinkers and power brokers, including Tory Chancellor of the Exchequer Kenneth Clarke and Jacob Rothschild, scion of the international banking family. "John is one of the clearest thinkers I've ever met," says Mervyn King, chief economist and executive director of the Bank of England and co-author with Kay of a textbook on the British tax system.

Kay's business credentials aren't in doubt. He has done an impressive job setting up London Economics, which employs 60 consultants and had revenues of $9.4 million last year. But critics wonder if such experience is enough preparation for him to achieve his goal of making Oxford into "the most intellectually serious business school in Europe." To do that, Kay will need plenty of political savvy.

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