(FORTUNE Magazine) – MANAGING/Cover Story

34 New Debate About the Harvard Business School What's the mission? Training consultants, or CEOs? by Walter Kiechel III

44 Michael Porter: Superstar

CORPORATE PERFORMANCE

52 Apple Finally Invades the Office By the back door. by Brian O'Reilly

64 Companies to Watch

THE ECONOMY

6 Fortune Forecast: How Slow Will They Grow? Moderately good news from West Germany and Japan. by Sylvia Nasar

COMPETITION

74 Who's Ahead in the World Auto War Ford is up, GM down, and Honda is charging. by Alex Taylor III

76 The World's Top 20

78 The Cars the Customers Love

82 The U.S.: The Team at No. 2

86 Europe: Battling Bureaucrat

88 Japan: Hands On at Honda

MONEY & MARKETS

97 The Paranoid Life of Arbitragers Now that worried arbs are investing less, other investors are left with greater risks. by Jaclyn Fierman

POLITICS & POLICY

113 Tough Times Living With Tax Reform The ''technical corrections'' bill that business awaits could be longer than the act itself. by Kenneth Labich

125 Winning One From the Gipper Norman Lear brought you Archie Bunker, Maude, and the defeat of Robert Bork. Next? by Ann Reilly Dowd

TECHNOLOGY

131 Striking It Rich in Biotech Brainy scientist-entrepreneurs were out for glory, not money -- but they got both. by Stuart Gannes

PHILANTHROPY

145 America's Best-Run Charities What they have in common is more bucks for the needy, fewer for overhead. by Gwen Kinkead

LOOKING AHEAD

153 Going for the Gold Efficient new North American mines will make a mint even if the price of the metal collapses. by Anthony Ramirez

4 The Editor's Desk

8 News/Trends The big drop on Wall Street, Salomon bows out of munis, skirt lengths make their move, TV's bright picture, resume revisionism, a miracle cure for Third World debt, George Bush's bad idea, and more.

19 Letters to Fortune

159 Fortune People Asher Edelman's $100,000 lesson, Frances Lear and ''the woman who wasn't born yesterday,'' the many shades of Bill Gray, Lester Thurow on being a nice guy, and how Gerry Roche bags CEOs. by Nancy J. Perry

162 On the Rise

165 Keeping Up by Daniel Seligman

169 Personal Investing Rx for stock shock: mutual funds for wild markets. by John Paul Newport Jr.

A sleeper in building supplies. Overlooked growth stocks. Portfolio Talk: Fund manager Heinz Hutzler.

179 Other Voices New state takeover laws really can stop raiders. by Joseph W. Bartlett

185 Books & Ideas Princeton's Alan Blinder makes the liberal economist's case -- persuasively, to a point. by David R. Henderson

Cover: Harvard Business School professor Michael Porter was photographed by Anthony Edgeworth.