Dean of the Business School John H. McArthur last week denied press reports that the Business School is on the verge of a major financial short-fall, and said the school will participate actively in the upcoming University-wide fund drive.

McArthur's comments in an interview on Friday followed widespread media speculation that the Business School's position as a national leader in management education is in jeopardy.

Public scrutiny of the school was amplified last week, following McArthur's visit to the Yale School of Organization and Management to participate in a case study of Harvard's style of management education.

As part of the Yale appearance, comments McArthur made to President Neil L. Rudenstine at an administrative retreat in June of 1992, in which he spoke of critical issues in the Business School's future, were made public.

In the comments, the dean spoke of the Business School's "very fragile" position as a leader of management education, and warned that the school risked becoming "an also-ran...almost overnight." He said the school's professors were not paid competitive salaries, and that maintaining the school's status would take "lots of money."

But on Friday, McArthur said his published comments referred to the circumstances facing business schools generally, and were not specific to Harvard's situation.

"For all organizations, the difference in being fantastic and being in the pack is almost nothing," McArthur said, adding that most successful institutions "live on the edge of the precipice."

"The financial connection with that is, that's one of the things that can throw an organization off pace," he said.

The dean denied that Harvard's Business School faces a particularly dire financial future. "We don't face a financial crisis," he said.

McArthur said his comments about the low compensation of Business School faculty members were meant to address the problem of reasonable compensation in academia as a whole. And he said the problem is not just monetary compensation, but the substantial investment of time necessary to pursue an academic career.

"It's not a competitive career track with others that people can look at," McArthur said. "Higher education must attract its fair share of interested, outstanding people, and it is not [doing that]."

The situation is particularly serious in management education, he said, because business school's must compete directly with Wall Street firms to attract the best minds.

"We're surrounded by people who come up to young people and say, 'We like youjust the way you are,'" the dean said.

McArthur said the Business School has everyintention of participating actively in theUniversity's upcoming capital campaign, though hesaid the school does not have any capital needs ofits own and will not benefit directly from moneyraised during the campaign.

"We don't have any protected alumni," the deansaid. "I know how I spend my time and I think thatwe're as involved [in the campaign] as anybody Iknow about."

The campaign will be launched officially on May13 with an expected target of roughly $2 billion.Observers have said the participation of theBusiness School--with its large and wealthy alumnibase relative to Harvard's other faculties--iscritical to the success of the campaign.

McArthur declined to put an exact figure on howmuch the Business School hopes its alumni willcontribute to the fund drive. "Of the funds thathave come in so far, a large part of it has comefrom alumni of this school," he said.

The dean spoke passionately about the need forUniversity-wide cooperation on issues of commonconcern. And he said that while it is important tomaintain the strength of Harvard's individualschools and departments, it is also important tofacilitate easier cooperation between individualfaculty members across the University.

"To me, it's a no brainer," McArthur said. "Buthow to do it is a bit of a challenge...We're notgoing to make it as a University if we don't havethe strongest possible units."

McArthur's comments came just a few days aftera column in The Boston Globe suggested he wasusing the excuse of a budgetary emergency todiminish expectations for his school'sparticipation cooperation in the fund drive.

Some observers have suggested that the dean'sappearance at Yale was deliberately timed to drawmedia attention away from the release last week ofRudenstine's report on the University, whichoutlines the philosophical reasoning behind thecapital campaign.

But McArthur said such allegations were false."I have no idea when [Rudenstine's] reports arecoming out," he said. "The day I went [to Yale]was set last summer.