The Wall Street Journal began it all innocuously enough with a front-page article last month titled, "To Some at Harvard, Telling Lies Becomes a Matter of Course." The story was about a fall-term Business School class on "Competitive Decision Making" taught by Howard Raiffa, Ramsay Professor of Managerial Economics. William M. Bulkeley, a 28-year-old writer who recently moved to Boston after six years with the Journal, knew someone who had taken Raiffa's course, and thought it might make a good subject for an article. It did.

Like many Harvard-related stories, the article on Raiffa's course intrigued much of the news media, and soon The Boston Globe, Newsweek, the Chicago Sun-Times, The Detroit News, the wire services, and other newspapers and business publications picked up on the story. Why all the fuss? Raiffa's course pairs students off and places them into actual negotiating situations, where they use and analyze real bargaining techniques. One of these techniques--the one emphasized in the Journal article--is known as "strategic misrepresentation," or more simply, lying.

"When we say strategic misrepresentation, we're not talking about a person who, when trying to sell a used car, will set back the odometer," Raiffa wrote in this month's Harvard Business School Bulletin. "That sort of scurrilous behavior would not be condoned by me or by any of my students. We are talking about the grayer area where the seller of the car would be willing to sell at $500 but says he would not be willing to take a cent less than $800."

Although Raiffa puts his students into about 30 bargaining situations, four or five of which may involve strategic misrepresentation, and four or five of which may hurt someone using the technique, Bulkeley's article concentrated on the issue of lying. The article's subheadline read, "Untruths Can Improve Grade in Business-School Class; Peer Pressure and Ethics." Raiffa, past and present students in the course, Lawrence E. Fouraker, dean of the Business School, and other University officials were understandably upset by the way the course was portrayed in the papers.

According to a Boston Globe article, Fouraker "reacted bitterly" to the story and "threatened to cut off a textbook subsidiary of Dow Jones from free use of Harvard Business School cases." (Dow Jones publishes the Wall Street Journal.) The article also stated that Fouraker "asked Harvard General Counsel Daniel Steiner '54 to call Dow Jones's outside attorneys."

Neither Fouraker nor Irvin L. Grimes, president of the Jones subsidiary, would comment on the article. Steiner, however, termed the story "inaccurate." "Dean Fouraker never asked me to contact the Dow Jones outside lawyers," he said, adding, "I knew the lawyers personally and thought of speaking to them strictly in that sense, but I never did actually contact them. And certainly no legal action like a law suit was ever considered."

The bargaining situations or games, as they are called in Raiffa's course, are abstracted and simplified from more complex real-life business situations. One student might play the role of a policeman's union leader, the other a city mayor. The two sit down and negotiate a contract, each attempting to get as favorable an agreement as he can.

Negotiations take place entirely out of the classroom, and are discussed and analyzed back in the class after the settlements are reached. One-third of the final grade is based on how good a contract each person secures, plus how well the student analyzes the game.

"I don't teach [my students] to misrepresent the facts, but I do force them to think hard about such problems," Raiffa said.

Bulkeley's article, however, began with the statement that one student in the class received the highest grade in the bargaining section of the course because he was willing to lie. "That student he mentioned did not get a good grade in the course because he was willing to lie," Raiffa said. "I re-averaged the grades with those games that made lying advantageous, and he still came out ahead. He just did well generally."

"The issue of lying always came up," Bulkeley said. "Whether or not lying was advantageous in a particular game. Just allowing lying and rewarding it makes a lot of people feel the course is, in effect, endorsing it."

However Raiffa contends. There's an innuendo in the article that I'm not concerned with the problems of ethics, and that's a serious character assessment."

Asked whether his course in any way condones lying in business, Raiffa cited an analogy used in a letter to him from two former students and Roger Fisher '43, Williston Professor of Law.

"When, in the 1950s," the letter began, "Robert Hutchins was haled before a congressional committee and asked if it was true that the University of Chicago taught communism, he replied, 'Yes. And in the medical school we teach cancer.'"

"It's a valid analogy," Raiffa said. "To deal with a problem, we have to teach about it."