OCOB Ann Rep 07-08 - Orfalea College of Business - Cal Poly San ...

ANNUAL REPORT ❚ ACADEMIC YEAR 2007-08 ❚ SAN LUIS OBISPO, CALIFORNIALOOKING AT OURLEADERSB. QUENTIN LILLY2008-09 HONORED ALUMNUS

Contents1Dean’s message2Strategic planning5Faculty news13Faculty reports24Academics42Cover story45Community51Operations56DirectoryMission statementThe Orfalea College of Business challenges highly motivated studentsto become tomorrow’s socially responsible business leaders through a learn-by-doing,technology-oriented education.Our motto: “The brightest minds make the best company.”

DEAN’ S MESSAGEMaking life better through teaching and learningDear Alumni, Parents and Friends,We continue to commit ourselvesto excellence in everything wedo. The support and encouragement Ireceive from each of you as we striveto improve is tremendous – thank you!Cal Poly’s Orfalea College of Businessis the school of choice by outstanding students and faculty.Once again this year, I am sharing with you thedetailed goals that we have chosen as priorities for thisyear. We have not changed our focus, which will continueto be the development of people, forming partnerships,and building a community of scholarship and practice.Through these pages, we hope to remind you of allthe ways that we are making life better through teachingand learning. Several of our outstanding faculty haveshared their current thinking about important questionsthat surround their research. We have more student successstories than we could ever include here. Our studentmanagedportfolio project had another successful year ina difficult market, and 11 of 17 finance seniors passedLevel 1 of the Certified Financial Analyst examination ontheir first attempt, defying the national averages.Our students engage productively in communitybasedlearning and service through effective business. Wehave invested in enhancing our offerings in entrepreneurship,and seek university-wide participation by studentsand faculty in every discipline. At the same time, we seekways to involve our business students in the polytechnicdisciplines that are core to the identity of Cal Poly.In response to important questions that challenge usto assure students and employers that our graduates haveachieved our learning goals, wehave focused on outcomes assessmentfor each of our degree programs.I realize that the K-12implementation of learning assessmenthas met with mixed resultsand some dissatisfaction. Wedecided that we can and will do better, and seek to ensurethat every graduate of our programs is an effective communicator,can analyze data when making decisions, andunderstands the global nature of business and how tobuild effective teams to achieve goals. We believe that ourcurricula achieve these goals, but we want to be certain,and we want to improve.For example, we want to enhance leadership developmentin our students. This winter, we will initiate a newLeadership Institute aimed at nominated sophomore studentswho we believe can be coached to become effectiveleaders. We have always been committed to developingleaders through our clubs and organizations; this initiativeis a deliberate strategy for enhancing the results.Please remember that you are always welcome at CalPoly. While we can greet you best when you let us knowthat you are coming to campus, I often meet alumni whohave taken a break while driving the 101 and are just informally“checking in.” This inspired us to install aWebcam on our Orfalea College of Business Web site. Ifyou wonder if the grass is green and the sun is shininghere, just go to www.cob.calpoly.edu and click on theWebcam. We hope it makes you smile when you catch aglimpse of Cal Poly.Sincerely,ORFALEA COLLEGE OF BUSINESS ❚ 1

Strategic planning

STRATEGIC PLAN UPDATE 2008Progress remains strong in faculty development, student successThe Orfalea College of Business strives to be an exemplarof Cal Poly’s teacher-scholar philosophy, while engagingstudents in meaningful learn-by-doing academicdegree programs. Our message to firms and organizationswho hire our students is, “The brightest minds make thebest company.”We have made important progress in building a communityand promoting our reputation for excellence, in facultydevelopment and student success, and for careful investmentand use of our scarce resources. I strive to effectively lead ourfaculty and staff toward these shared objectives.Our priorities and challenges:■ Fundraising in a challenging economy;■ Continuing to focus faculty on both learningassessment and research, consistent with ourAACSB accreditation;■ Reinforce a fair and equitable work environmentthat attracts the best faculty and staff;■ Developing mutually beneficial partnerships withindustry and with other units at Cal Poly, consistentwith university priorities;■ Initiating programs and directing resources only inways that are consistent with college and universitypriorities.I.BUILD COMMUNITY AND IDENTITY BETWEENSTUDENTS, FACULTY, STAFF, ALUMNIAND CORPORATE PARTNERSAccomplishments for 2007-08:■ Invested in improved software systems to communicatewith our students;■ Enhanced membership on several college advisorycouncils and boards;■ Secured the services of a corporate liaison to connectstudents and programs with firms that want to supportthe Orfalea College of Business;■ Funded a faculty research seminar in the areas ofeconomics and finance that included participantsfrom across the campus;■ Reorganized our entrepreneurship initiatives tobroaden their scope and potential participation.Goals for 2008-09:1.2. Expand the scope and participation in our OrfaleaCollege of Business alumni reunions to include abroader group of alumni and to encourage networkingamong alumni;1.3. Encourage new interdisciplinary faculty connectionsby funding research seminars in several newareas, including data analysis and food products;1.4. Continue the development of our San Luis ObispoExecutive Partners Program to engage local professionalswith our students and programs.II.STRENGTHEN IMPACT OF BRAND IDENTITYAccomplishments for 2007-08:■ Employed Douglas Advisors of Orange County todevelop deeper understanding of how Californiafirms perceive our college and our graduates;■ Collaborated on university efforts to sharpen ouridentity;■ Maintained accredited status with AACSB;■ Continued to attract outstanding students and toimprove graduation rates and time-to-degree;■ Established the Orfalea College of Business as areliable and valued community partner.Goals for 2008-09:2.1. Enhance placement opportunities for recentundergraduate and graduate students;2.2. Reinvigorate our commitment to Cal Poly’s traditionof applied technology and interdisciplinarycourses that support this priority;2.3. Collaborate with the Colleges of Science andAgriculture to develop a master’s degree in FoodSystems for individuals with undergraduate degreesin science;2.4. Become a leader in effective curriculum redesignin response to assessment data;2.5. Participate in university-wide sustainabilityprojects, with special emphasis on economicsustainability of proposed solutions;2.6. Seek support for programs in Real Estate, Leadership,and Entrepreneurship;2.7. Seek recognition for the Orfalea College ofBusiness from appropriate organizations thatrank academic programs.III.PROMOTE ENGAGED, EFFECTIVE LEARNINGAND STUDENT SUCCESSAccomplishments for 2007-08:■ We continue to improve our graduation rate andreduce time-to-degree completion;■ Our students continue to compete successfully inregional and national competitions;■ Innovative programs, such as the Cal Poly CertifiedFinancial Analyst Challenge, provide new opportunitiesto promote student achievement and success.CONTINUEDORFALEA COLLEGE OF BUSINESS ❚ 3

STRATEGIC PLANNINGStrategic plan CONTINUEDGoals for 2008-09:3.1. Develop effective programs in Real Estate, Leadership,and Entrepreneurship;3.2. Plan positioning and introduction of an M.S. inEconomics;3.3. Use our Distinguished Speaker Series to engagestudents from multiple colleges within Cal Poly;3.4. Link continuous improvement in our curriculato learning assessment data. Explore new waysto include the issue of social responsibility in allcurricula;3.5. Invest in opportunities for teaching improvement;3.6. Develop two online courses open to all Cal Polystudents to support student learning in globalmarketing and in personal finance;3.7. Enhance teaching and learning through redesignof two classrooms;3.8. Develop a Student Success Center with tutoringand career development resources.IV.PROMOTE FACULTY SCHOLARSHIPAccomplishments for 2007-08:■ Effectively deployed our faculty housing unit toinvite visiting researchers;■ Initiated discussions with one international partneruniversity; we will focus on premier polytechnic universitieswith high-quality business programs;■ Provided support personnel in instructional design,learning assessment, and academic advising to focusfaculty efforts of teaching and research;■ Recruited 11 outstanding new faculty members.Goals for 2008-09:4.1. Fund faculty seminar series in several new areasof interdisciplinary faculty interest;4.2. Execute a cooperation agreement with at least oneinternational polytechnic university;4.3. Continue to develop a culture of accountability inour support for faculty scholarship;4.4. Involve more of our temporary faculty in professionaldevelopment activities with college funding;4.5. Initiate a research program in Latino BusinessExcellence to study the role of Latino professionalsin California and multinational firms;4.6. Recruit additional faculty in accounting, real estatefinance and economics, and interdisciplinaryareas related to information systems.V.EFFECTIVELY DEPLOY OUR RESOURCES:FUNDRAISING, CONTINUOUS PROCESSIMPROVEMENT, RELENTLESS FOCUSON STRATEGIC PRIORITIESAccomplishments for 2007-08:■ Secured the services of an experienced AssistantDirector of Advancement;■ Made instructional design position permanent;■ Successfully introduced a full-fee master’s degree inAccounting/Taxation;■ Engaged faculty in a successful workshop on learningassessment, and subsequent plans for learningassurance;■ Tested technology infrastructure for our future distancedelivery of the M.S. in Business and Technology;■ Improve data accuracy regarding student demandfor business concentrations.Goals for 2008-09:5.1. Continue to invest our endowment and discretionaryfunds consistent with these strategic plans;5.2. Develop two online courses where demand ispredictably high;5.3. Relocate staff support for teaching and learning topromote better communication and efficiency;5.4. Reach out to alumni who earned their degrees inthe 1990s with an attractive scholarship supportprogram for future students;5.5. Increase our ability to engage more alumni andfriends of the college;5.6. Seek funding for Centers of Excellence in emergingdisciplines. ■4 ❚ ANNUAL REPORT 2007-08

Faculty news

FACULTY NEWSFaculty and scholarshipBradford Anderson (Accounting/Law),authored the paper, “Please Release Me,Let Me Go! Releases Of Unknown ClaimsIn The Penumbra Of California CivilCode Section 1542,” and presented it atthe Pacific Southwest Academy of LegalStudies in Business, Palm Springs, heldFeb. 21, 2008. Anderson was awardedBest Presentation by a non-tenuredfaculty member. He also presented thepaper to Orfalea College of Businessfaculty at a Faculty Networking Lunch.Clare Battista (Economics) presented“Community Development Projects asService Learning” at the Third AnnualConference on Community-BasedTeaching and Learning, held March 8,2008, at California State UniversityLos Angeles.Norm Borin (Marketing), Lynn Metcalf(Marketing) and Brian Tietje (Marketing/associatedean) co-authored“Implementing Assessment in anOutcomes-Based Marketing Curriculum”(target journal: Journal ofMarketing Education).Norm Borin (Marketing) – presenterand author, Joan Lindsey-Mullikin(Marketing) – presenter & author, R.Krishnan – author only, “MeasuringPromotion and tenureCal Poly President Warren J.Baker announced the promotionof 45 faculty members and theaward of tenure to 25 facultymembers, effective in the 2008-09academic year.The promotions include 24to the academic rank of professor,22 to the rank of associateprofessor, and one to the rankof student services professional –academic related III.President Baker extends hiscongratulations and appreciationto these faculty members receivingpromotion and/or tenure inthe Orfalea College of Business:PROFESSOR:Arline Savage (Accounting)Brian Tietje (Marketing)ASSOCIATE PROFESSOR:Clifford Barber (IndustrialTechnology)TENURE:Arline Savage (Accounting)Green-ness: Its Effect on PerceivedQuality, Value and Willingness to Pay,”at the 2008 AMA Summer Educator’sConference in San Diego.Congratulations to Lee Burgunder onhis selection as the Faculty EmeritusAward recipient for the Orfalea Collegeof Business for 2007-08. For that honor,Burgunder received a cash stipend anda plaque. His picture will be on displayin the college’s awards showcase forone year.Lee Burgunder (Accounting/Law) andBarry Floyd (Management) co-authored“The Future of Inline Web DesigningAfter Perfect 10” (target journal: TexasIntellectual Property Law Journal).Doug Cerf (Accounting), author, KateLancaster (Accounting), presenter andauthor, and Arline Savage (Accounting),author, “Teaching Accounting andFinance to Support Sustainability,”presented to the American AccountingAssociation’s Western Regional Meetingin San Francisco on May 2, 2008.Jean-Francois Coget (Management)wrote a chapter, “A PsychodynamicPerspective on Human Behavior,”published in the book “Behavior inOrganizations: An ExperientialCollege’s Marlow and Miller honored by Cal PolyTwo Orfalea College of Businessprofessors were honored in 2007-08by the university for their outstandingwork.Cal Poly named professor ofeconomics Mike Marlow to receivethe university’s Distinguished ScholarshipAward for 2007-08, and professorof accounting C. Tad Millerwas selected for the university’sDistinguished Teacher Award.Marlow was honored for hisdistinguished record of publicationsin economics and public policy. Hisresearch on public education, healtheconomics and controversial topicscombines theory and application toMike MarlowTad Millerbetter understand the roles and efficacyof government policies.Marlow has been teaching at CalPoly since 1988. He earned a Bachelorof Arts degree in economics fromGeorge Washington University in1975, and his doctorate in economicsfrom Virginia Polytechnic Institutein 1978.Miller was selected as one ofthree Distinguished Teachers at CalPoly for the 2007-08 academic year.Nominations were made by students,with winners chosen by facultycolleagues from the Academic Senate,making the honor very significant.Miller began teaching at thecollege in the fall of 1987. He earneda Bachelor of Arts in economicswith a minor in mathematics atthe College of Wooster and both hismaster’s degree in accounting and hisdoctorate in finance at the Universityof Arizona.6 ❚ ANNUAL REPORT 2007-08

FACULTY NEWSFaculty and scholarship CONTINUEDApproach”, 9th edition, McGraw Hill, NY,June 6, 2008.John Dobson (Finance) authored“Utopia Reconsidered: The Modern Firmas Macintyre’s Institutional Ideal” in thePhilosophy of Management;authored “Alasdair MacIntyre’s AristotelianBusiness Ethics: A Critique” (targetjournal: Journal of Business Ethics);authored “Introducing Ethics into theFinance Curriculum: A Simple Three-Level Guide,” published in the Journal ofFinancial Education.Sharon Dobson (Marketing), presenterand author, “Business Plan Development,”at the Horticulture and CropScience Enterprise Projects. Presented tothe faculty/staff of Horticulture and CropScience Department at Cal Poly on Jan.29 and Feb. 5, 2008.Eric Fisher (Economics), R. Rebelein,D.T. Mitchell, P.H. Schneider, andN.B. Simpson co-authored “AClassroom Experiment on ExchangeRate Determination With PurchasingPower Party” (target journal: Journalof Economic Education).Barry Floyd (Management) and JanetMarler co-authored “Database Conceptsand Applications in Human ResourcesInformation Systems,” which is scheduledto appear in Human ResourceInformation Systems, Kavanagh, M. J. andThite, M. (eds.), Sage Publications.Congratulations to Finance ProfessorLarry Gorman on his selection asDistinguished Teacher of the Year for theOrfalea College of Business for 2007-08.For that honor, he received a cashstipend and a plaque. His picture will beon display in the college’s awardsshowcase for one year.Steve Hamilton (Economics) authored“Informative Advertising in Concentrated,Differentiated Markets” (targetjournal: International Journal of IndustrialOrganization);authored “Elected to the EditorialCouncil,” Journal of EnvironmentalEconomics and Management, 2008;authored “Excise Taxes with Multi-Product Transactions” (target journal:American Economic Review);Brothers and project partners (from left ) Rod Gouff and Ken Gouff with Enrica Lovaglio and Jay SinghMultidisciplinary project gets the baitJay Singh, associate professor in the Industrial Technology area, joined with associateprofessor Enrica Lovaglio from the Art and Design department of the Collegeof Liberal Arts and Chris Starnes, MBA student, to design an innovative packagingproduct for local inventor Ken Gouff.Working with Gouff, the three created a new clamshell package for Gouff’sgopher bait applicator that will help draw attention to the product while educatingconsumers by allowing them to see the product in its entirety. Projects such as thisencourage multi-disciplinary collaboration and promote increased collegialityamong faculty and students campus-wide.authored “Unintended Consequences:The Spillover Effects of CommonProperty Regulations,” (target Journal:Marine Policy).Sanjiv Jaggia (Economics) and A.Kelly co-authored in 2008: “PracticalConsiderations when Estimating in thePresence of Autocorrelation” (targetjournal: Case Studies in Business, Industryand Government Statistics).Kevin Lertwachara (Management)was awarded a grant of $2,700 toattend a Master Teacher Conferencein Atlanta, GA.Michael L. Marlow (Economics)authored “Conducting Research inPolitically Incorrect Areas” andpresented it at the Association forPrivate Enterprise Education, 2008, LasVegas Conference;authored “The Influence of PrivateSchool Enrollment on Public SchoolPerformance” (target journal: AppliedEconomics);authored “Do Expenditures on TobaccoControl Decrease Smoking Prevalence?”(target journal: Applied Economics);CONTINUEDORFALEA COLLEGE OF BUSINESS ❚ 7

FACULTY NEWSFaculty and scholarship CONTINUEDauthored “Honestly, Who Else WouldFund This Research?” published in EconJournal Watch.Pat McQuaid (Management) authored“Adopt Your Local Professor: The Needfor Industry and Academia to WorkTogether,” published in March 2008, pp.6-8, in the journal, Testing Experience.Patricia McQuaid (Management) wonthe Best Paper award (“SoftwareProfessor McQuaid is elected presidentof the American Software Testing Qualifications BoardPatricia McQuaid (InformationSystems) has been elected presidentof the American Software TestingQualifications Board (ASTQB).America is one of approximately40 countries that recognizes theinternational software testing certification,part of the InternationalSoftware Testing QualificationsBoard (ISTQB).The idea is that ifsomeone haspassed the certificationin a countrythat is part of theISTQB, it is recognizedin all of thePatricia McQuaiddifferent countriesthat are part of the organization.This is particularly important inEurope and other continents wherepeople routinely work in neighboringcountries. McQuaid brought thescheme to America in 2004 and nowleads the nonprofit U.S. board.There are over 60,000 softwaretesters worldwide who currentlyhold ISTQB certifications. There aretwo levels of certification: The FoundationLevel and three separateAdvanced Level certificates. For bothlevels, international working partiesdevelop and maintain internationallyuniform curricula and exams.Disasters – What Have We Learned?”),presented on her trip to Bulgaria at theSouth East European Software TestingConference held July 2-4, 2008.Additionally, part of the award is areserved speaking slot at anotherconference – a major software qualityand testing conference in Europe.Congratulations to Tad Miller (Accounting),on receiving the UniversityDistinguished Teaching Award.Steven Mintz (Accounting) authored“Making Assessment Accessible for an“If America is to continuetoward excellence in softwaredevelopment, it must commit itselfto competently testing the softwareit develops in a systematic andconsistent matter,” says McQuaid.McQuaid was the associatedirector and program chair of the4th World Congress for SoftwareQuality (4WCSQ), held in Septemberin the Washington, D.C., area.She also served as program chairof the 2005 Conference for theAmericas (North, South andCentral) for the 3WCSQ in Germany,and for the 2WCSQ in 2000,held in Japan.The World Congress for SoftwareQuality (WCSQ) is a majorinternational gathering of softwarequality professionals that began in1995 in the United States. Thecongress has been a partnership ofthe Software Division of the AmericanSociety for Quality, the SoftwareGroup of the EuropeanOrganization for Quality, and theUnion of Japanese Scientists andEngineers. The conference locationrotates among the regions, nowevery three years, with the goals ofenhancing the quality, reliability,security and value of softwarebasedsystems.Over-Worked Faculty” and presentedit to the Western Decision SciencesInstitute in San Diego on March 19, 2008.Congratulations to Steven Mintz(Accounting) on being named the 2008Orin Ethics Symposium keynote speakerat the University of Missouri in March.This event was sponsored by the Schoolof Accountancy, Robert J. Truslake, Sr.College of Business.Steven Mintz (Accounting) authored“Designing Assignments for AccountingEthics Education” and presented it atthe American Accounting Association’sWestern Regional Meeting in SanFrancisco on May 1, 2008;authored “A Comparison of CorporateGovernance in India and China with theU.S.” and presented it at the AmericanAccounting Association’s WesternRegional Meeting in San Francisco onMay 3, 2008.Eric Olsen (Industrial Technology)presented “Lean Thinking on theCentral Coast” to the Santa MariaManufacturer’s Association, MelfordBorzall, Santa Maria, on March 25, 2008.William Pendergast (Management), A.Sunje and M. Pasic (2008) co-authored“The Internationalization of SMEs inBosnia and Herzegovina in Leo Dana,”ed., “Handbook of Research onEuropean Entrepreneurship,” London:Edward Elgar.Jim Sena (Management) authored“Knowledge Management andOrganizational Security Issues,”published in “Knowledge ManagementStrategies: A Handbook of AppliedTechnologies,” IGI Publishing, ChapterVII, pages 194-217.Jim Sena (Management) and MarkSena co-authored “A ComparativeExamination of (CIO vs CEO) ExecutiveStrategy for Outsourcing,” published inthe Journal of Issues in InformationSystems, November, 2007.Jim Sena (Management) and MarkSena co-authored “Social Networking atthe Corporate Level” (target journal:Journal of Issues in Information Systems).Jim Sena (Management) and Eric Olsen(IT) co-authored “Line vs. Management– Differences in Perceived Levels ofImplementation at an AerospaceCONTINUED8 ❚ ANNUAL REPORT 2007-08

FACULTY NEWSFaculty and scholarship CONTINUEDAssembly Facility” (target journal –California Journal of OperationsManagement).Jim Sena (Management) and A.B. RamiShani (Management), co-authored“Organization Security Design: A DesignBased Theory for Action” (target journal:International Journal of Knowledge,Culture and Change).Aric Shafran (Economics) authored“Externalities and the Problem ofWildfire Risk” (target journal: Journal ofUrban Economics).A.B. (Rami) Shani (Management), J.Lau, Dawn Chandler (Management)and Jean-Francois Coget (Management)co-authored “Behavior inOrganizations: An Experiential Approach,”published in the 9th edition,McGraw Hill, NY, June 6, 2008.Alden Shiers (Economics) put togethera proposal to take the lead to examinethe real estate market of San LuisObispo County and create and coauthora technical report with SolinaLindahl (Economics) and Susan Jones(Economics). This technical report willbe posted on the Orfalea College Website as part of dissemination.In April, Jay Singh (Industrial Technology),received a $228,980 grant withcollaborators Roland Geyer (Co-PI,UCSB) and Marc Binder (PI, PEAmericas), titled, “Life Cycle Analysis(LCA) of Various Glass PackagingDesigns.” The scope was an LCA studyof various glass packaging designs anda possible tool for the participatingmember companies to easily assesstheir environmental footprint andbenchmark themselves against regionaland industry averages. It was sponsoredby the Glass Packaging Institute (GPI)and Fédération Européenne duVerred’Emballage (Feve).Jay Singh (Industrial Technology) waspart of a multidisciplinary team from CalPoly working to assist PG&E at DiabloCanyon Nuclear Power Plant’s partswarehouse in keeping track of thousandsof parts with RFID tags. Theteam consists of faculty and studentsin the College of Engineering, theCollege of Agriculture, Food andBorin receives Hood Endowed Fellowship for 2008-09The recipient of the Richard andJulie Hood Endowed Fellowship inMarketing for 2008-09 is NormBorin, Marketing professor.Borin was selected for hisexcellence in teaching, researchand service in themarketing area ofthe Orfalea Collegeof Business.The HoodFaculty Fellowshipis awarded annuallyto a member ofNorm Borinthe marketingfaculty according to guidelines thathave been developed in concert withEnvironmental Sciences, and theOrfalea College of Business.Lisa Sperow (Accounting) served as themoderator for the Diplomacy inInternational Affairs Panel discussionduring the International CareerConference held on Feb. 2, 2008, in SanLuis Obispo.Michael Stebbins (Management) andA.B. (Rami) Shani (Management), coauthored,“Clinical Inquiry and ReflexiveDesign in a Secrecy-Based Organization,”in revise and resubmit stage,Journal of Applied Behavioral SciencesSpecial Issue: The Challenges of theScholar-Practitioner in Honor of Edgar H.Schein (40 pages, in review).Michael Stebbins (Management) andA.B. (Rami) Shani (Management), coauthored,“Toward a Sustainable WorkSystems Design and Change Methodologyin Creating Sustainable WorkSystems,” 25 pages in press, Routledge,London, England.The following faculty members wereawarded the following grants for the2008-09 academic year:Orfalea College of Business SummerResearch Grants for support inpublishing a peer-reviewed journalarticle ($5,000 each):CONTINUEDRichard and Julie Hood. Richardstudied electrical engineering at CalPoly and is the founder of MaximIntegrated Products in Sunnyvale.Their son, Brian, is an electricalengineering department alum, anddaughter, Becky, graduated frommarketing in the Orfalea College ofBusiness.“The Orfalea College of Businessis grateful to the Hood family forproviding much-needed resources forfaculty professional development,”said Dean Dave Christy. “The Hoodfamily’s commitment and vision tothe future of our college and thisuniversity is exemplary.”Norm Borin (Marketing) – “MeasuringGreen-ness: Its Effect on PerceivedQuality, Value and Willingness toPay,” (target journal: Journal ofConsumer Research);Chris Carr (associate dean, GraduatePrograms) – “Globalizing the CurriculumOne Step at a Time: Using anExperiential International Study Tour toEnrich an MBA Program and Curriculum”,(target journals: InternationalJournal of Management Education,International Journal of Teaching andLearning In Higher Education or similarquality journal). Proposal independentlyevaluated and approved by UPC ChairLynn Metcalf, GPC Chair CyrusRamezani, FAC Chair John Dobson andAssociate Dean Brian Tietje;Jeff Danes (Marketing) – “Innovationand Virtual Brainstorming in Marketing”(target journal: The Journal of Marketing);John Dobson (Finance) – “An Ethicallyand Aesthetically Inclusive Theory ofthe Firm” (target journal: Business EthicsQuarterly);Samir Dutt (Finance) – “FX Market Paper”(target journal: The Journal of Derivatives);Eric Fisher (Economics) – “TheStructure of the American Economy”ORFALEA COLLEGE OF BUSINESS ❚ 9

FACULTY NEWSOrfalea College of Business welcomes four new faculty in 2007-08Rodney MockMock joins the Accounting Area asassistant professor in taxation.Mock did his pre-law work atPortland State University and graduatedsumma cum laude with a B.A.from the University of California atDavis. He received a J.D. with anemphasis in tax from the Universityof Oregon School of Law and anLLM in taxation from the Universityof WashingtonSchool of Law.Mock was apracticing attorneyin Oregon for twoyears before returningto school for hisRodney Mock LLM. From 2004 to2008 he was an associate with thefirm of Merrill-O’Sullivan, LLP inBend, OR, where he specialized inestate planning, trust administration,and business and tax transactions.Mock is also a member of theOregon State Bar Association and amember of the Investment Committeefor the Central Oregon CommunityCollege Foundation. Hepreviously served as a member ofthe board of directors for The CenterFoundation (www.neuro-ortho.com)in Oregon and as land use chair forthe Awbrey Butte NeighborhoodAssociation in Oregon.Stern NeillNeill joins the Marketing Area of CalPoly’s Orfalea College of Businessfrom Louisiana State University(LSU) in Baton Rouge, LA.Neill completed a bachelor’s injournalism at LSU and an MBA fromSoutheastern Louisiana University.He earned a doctorate in businessadministration from LSU with amajor in marketing and a supportingfield of informationsystems and decisionsciences.With industryexperience inspecial projects andas director ofStern Neill market research atNeill Corporation in Hammond, LA,Neill also has extensive academicexperience. He has been an instructorat LSU, a lecturer in businessadministration at the University ofWashington at Tacoma, a visitinglecturer in the Department of Managementand Public Administrationat the University of the South Pacificin the Republic of Fiji, and both anassistant and associate professor atthe Milgard School of Business at theUniversity of Washington at Tacoma.Neill’s professional affiliationsinclude the Academy of MarketingScience, the American MarketingAssociation, and the MarketingScience Institute.Andreas SimonSimon has lived in Australia, Germany,Michigan, and now calls theCentral Coast his home.As a new assistant professor inthe Accounting Area, Simon shareshis experiences from around the globe.Simon earned both the equivalentof an undergraduatedegreeand a Diplom-Kaufmann, orGerman graduatedegree, in financeand accountingAndreas Simon from the Universityof Applied Sciences in Berlin, Germany.He earned a doctorate inaccounting at the University ofQueensland in Brisbane, Australia.He was a visiting scholar at theUniversity of Michigan Stephen M.Ross School of Business in 2007.Simon has teaching experienceas a lecturer in accounting at MartinCollege in Australia and as a teachingassistant at the University ofQueensland. He also has industryexperience as an associate in assuranceand business advisory servicesfinancialservices forPricewaterhouseCoopers in Germanyand as a bank clerk for LandesbankBerlin in Germany.Simon has served as presidentof the Ph.D. Research Higher DegreeAssociation for the University ofQueensland Business School and is aformer member of the Accountingand Finance Association of Australiaand New Zealand, as well as theAmerican Accounting Association.Jonathan YorkYork has beennamed as the firstchair of the entrepreneurshipconcentrationat CalPoly’s OrfaleaCollege of Business.York brings an extensive recordJonathan Yorkof experience and fundraising expertiseto the college and is hailed byLou Tornatzky, Industrial TechnologyArea chair, as “someone whoreally makes things happen!”York earned a bachelor’s degreeat Yale University, a master’s degree inpsychology at Michigan State University,and his doctorate in psychologyat Michigan State University.Prior to his Cal Poly post, hewas instructor of entrepreneurship inthe MBA program at The Ohio StateUniversity Fisher College of Business.CONTINUED10 ❚ ANNUAL REPORT 2007-08

FACULTY NEWSNew faculty CONTINUEDYork also serves as a managingpartner in the firm of Jonathan Yorkand Associates, a firm that providesadvisory and consulting services togrowth companies and venturecapital investors.From 1997 to 2001, York servedas founder, chairman and CEO offourthchannel, inc., in New Albany,OH, a startup software companythat produced a suite of electroniccommerce software products forinternet-based and wireless sellingand configuration. From 1989 to1996, he was president and CEO ofthe Greater Columbus Chamber ofCommerce in Columbus, OH, wherehe was recruited by a board ofdirectors composed largely of corporateCEOs in financial, technologyand manufacturing industries toposition the association as a leaderin creating economic opportunity forGreater Columbus.1984 to 1989 saw York servingas president and CEO of the FranklinCounty Mental Health Board ofColumbus, OH., a privatized systemthat oversees mental health andsubstance abuse services in FranklinCounty, OH. He has also been anassistant clinical professor forthe Department of Psychology atMichigan State University; presidentand CEO of the Northeast GuidanceCenter in Detroit, MI; and a departmenthead at St. Lawrence Hospitalin Lansing, MI.York has served on the boardof directors for CMHC Systems inDublin OH, TeamDynamix inColumbus, OH, BestTransport inColumbus, IN, Clarity Solutions inTroy, MI, and Entegrity Solutions inSan Jose.York is married and has threegrown children.Faculty and scholarship CONTINUED(target journal: The American EconomicReview);Ken Griggs (Management) – “RisksUnlimited: An Examination of Challenges,Vulnerabilities, Tools andTechniques in Sarbanes-Oxley ComplianceEfforts” (target journal: TheInternational Journal of Services andStandards);Larry Gorman (Finance) – “Determiningthe Optimal Level of Shorting in a130/30 Style Investment Strategy”(target journals: Journal of PortfolioManagement, Journal of Investments orsimilar quality journals);Steve Hamilton (Economics) – “HowDoes Advertising Affect MarketDemand? The Case of Generic Advertising”(target journals: The Journal ofPolitical Economy, Journal of IndustrialEconomics or American Journal ofAgricultural Economics);Sanjiv Jaggia (Economics and Finance)– “Predictors of IPO Mis-pricing in aCompeting Risks Framework” (targetjournal: The Journal of Banking andFinance);Sanjiv Jaggia (Economics and Finance),Kelly, A., in 2008: “Practical Considerationswhen Estimating in the Presenceof Autocorrelation.” To appear inCase Studies in Business, Industry andGovernment Statistics;Jason Lepore (Economics) – “ConsumerRationing and Cournot Outcomes:Experimental Evidence” (target journal:The Rand Journal of Economics);Joan Lindsey-Mullikin (Marketing) –“Every Day Low Pricing Versus High/Low Promotions: Gender Preferences inRetail Environments” (target journals:The Journal of Consumer Research orJournal of Retailing);Alison Mackey (Management) – “Do‘Good’ Executives Work for ‘Good’Firms?: An Empirical Investigation of theDynamics of the CEO Labor Market”(target journal: The AdministrativeScience Quarterly);Ty Mackey (Management) – “TheMarginal Effect of Diversifying on FirmValue” (target journal: The StrategicManagement Journal);Mike Marlow (Economics) – “Estimatingthe Effects of E-Commerce on Salesin High-Tax States” (target journal:Applied Economics);Kathryn Marshall (Economics) – “TheImportance of Virtual Endowments forInter-Industry and Bilateral Trade”(target journals: The American EconomicReview, Journal of Political Economy,Journal of International Economics, orsimilar quality journals;Lynn Metcalf (Marketing) – “CrossCultural Negotiations” (target journal:Business Horizons);Cyrus Ramezani (Finance) – “SecurityFund as a Risk Management Tool forAgricultural Cooperatives” (targetjournal: The Journal of AgriculturalEconomics or similar quality journal;Hervé Roche (Finance) – “Asset Pricesin an Exchange Economy withHomothetic Recursive Utility HeterogeneousAgents” (target journal: TheJournal of Economic Dynamics andControl or similar quality journal;Arline Savage (Accounting) – “Non-Equational Databases, Equational ZeroVector Databases, and Inherent InternalControl” (target journal: AccountingReview);Jim Sena (Industrial Technology &Management) – “A ComparativeExamination of Executive Perspectiveson IT Strategy” (target journal: TheInternational Journal of Knowledge,Culture and Change Management);Aric Shafran (Economics) – “Learning inCoordination Games with Risky Payoffs”(target journals: Experimental Economicsor Economic Behavior and Organization);A.B. (Rami) Shani (Management) –“Leadership, Development andLearning Mechanisms: System Transformationas a Balancing Act” (targetjournal: The Leadership and OrganizationDevelopment Journal);Jay Singh (Industrial Technology) –“Evaluation of Corrugated BoardSpecifications from India, China, Thailandand the U.S.” (target journals: The Journalof Testing and Evaluation or Journal forPackaging Technology and Science);Rosemary Wild (Management) – “AStrategy for Robust Information SystemCONTINUEDORFALEA COLLEGE OF BUSINESS ❚ 11

FACULTY NEWSFaculty instructionally related activity proposalsThe following Instructionally Related Activities proposals in the Orfalea College ofBusiness, on behalf of our students, have been approved by President Baker for theacademic year 2008-09:Norm Borin $2,500 Ray Scherr Business Plan CompetitionNorm Borin $6,500 Students in Free Enterprise (SIFE)Chris Carr $8,000 MBA Int’l Collegiate Business Policy CompetitionChris Carr $7,000 Graduate Student Business Ethics CompetitionManocher Djassemi $8,100Design” (target journal: DecisionSupport Systems).The following faculty members wereawarded the following grants for the2008-09 academic year:Orfalea College of Business Hybrid/Blended Course Development Grant for$5,000 each:Ken Griggs (Management) – Hybrid/Blended Course Development and theAutomation of BUS 394. (One expecteddeliverable is that he will touch basesNat’l. Asso. Of Industrial Technology (NAIT)Rebecca Ellis $3,000 Human Resources Games Collegiate CompetitionBarry Floyd $8,000 International Career ConferenceJeff Hess $3,000 American Marketing Asso. National ConferenceLynn Metcalf $4,000 Wheelchair FoundationKen Riener $3,000 Draper Fisher Jurvetson Venture ChallengeLisa Simon $2,000 Orfalea College of BusinessSales Development ProgramJay Singh $8,000 PackExpoIn addition, Cal Poly’s chapter of the Wheelchair Foundation was awarded $11,500in University IRA funds, supplemented with the $4,000 noted above in OrfaleaCollege of Business IRA funds, for a total IRA award of $15,500. This activity isrecognized as a University Interest Event.These efforts by our faculty have enabled us to invest more than $74, 600 of IRAfunds into our students next year. Opportunities provided by these funds enrichthe college experience for our students and allow them knowledge that can only begained outside of the classroom. These funds come from fees each student pays tothe University for student activities.Faculty and scholarship CONTINUEDwith other MIS faculty and develop awork product that will also be attractiveto other MIS faculty who teach sectionsof this course);Jim Sena (Management) - Hybrid/Blended Course Development and theAutomation of BUS 391. (One expecteddeliverable is that he will touch baseswith other MIS faculty and develop awork product that will also be attractiveto other MIS faculty who teach sectionsof this course). ■KPMG offers accounting fellowshipKPMG LLP has established a KPMGFaculty Fellowship in the OrfaleaCollege of BusinessAccounting Area.Ron Lopes(Accounting ’88), aKPMG partner anda member of theOrfalea College ofRon Lopes Business AccountingAdvisory Board, has led KPMGpartners and employees with theKPMG Foundation in providingsupport for the new faculty fellowship.The purpose is to provideassistance to the Orfalea College ofBusiness in recruiting and retainingoutstanding business faculty.Accounting Area Chair DougCerf is the first fellowship recipient.Kennedy Library digital archiveshowcases faculty researchMore than 700 research articles andpapers by Cal Poly faculty have beenposted on Cal Poly’s new digitalarchive and research showcase,DigitalCommons@CalPoly,http://digitalcommons.calpoly.edu.From the DigitalCommons Website, visitors can now check out the“Top Ten Downloads,” view themost recent additions to the archive,or browse for articles by Cal Polyauthors or departments.DigitalCommons content includespreviously unpublishedpresentations and white papers aswell as journal articles, conferenceproceedings, technical reports andcampus publications – even Cal Polybuilding plans and drawings.The Robert E. Kennedy Librarylaunched the first-year pilot ofDigitalCommons in October 2007with support from the Office of theProvost and Vice President for AcademicAffairs. Future plans call forthe addition of senior projects andmaster’s theses.12 ❚ ANNUAL REPORT 2007-08

Faculty reports

FACULTY REPORTSCan Behavioral Finance Explain Stock Prices?BY SAMIR DUTT, ASSOCIATE PROFESSOR, FINANCE AREAIntroductionIf an investor buys a risk-free asset like a U.S. Treasurybond, he or she can be certain that the bond will pay thepromised amount if it is held to maturity. The return onthis investment is determined by how much the investorpays for the bond, and is commonly referred to as the riskfreerate. What if the investor buys an asset like IBM stock?Buying IBM stock, or any corporate stock for that matter,does not have a predictable outcome. The investment maymake a profit or a loss. Its payoff is uncertain. What shouldit cost? Since the payoff is uncertain, it must, on average,provide a higher return than the risk-free rate because noone would buy an asset that was both risky and paid out alower return on average than a Treasury bill. But how muchmore should the risky asset pay out relative to the risk-freeasset? How do we determine an asset’s risk premium?The capital asset pricing model, or CAPM (asset riskpremium = ß x market risk premium), provides one answer.It specifies the premium that must be paid by a riskyasset like stock over the return from holding a risk-free assetlike a U.S. Treasury bill in terms of the risky asset’s beta (ameasure of how closely the risky asset’s returns track theups and downs of the return on the market portfolio) andthe market portfolio’s risk premium, with the market portfolioproxied by a broad-based index like the S&P 500 or theWilshire 5000.Tests of the CAPM against market data, however, donot work particularly well. Recent work by Fama andFrench (1992) suggests that a stock’s beta may be essentiallyuncorrelated with its risk premium, which implies thatthe CAPM cannot reliably be used to calculate the fair priceof an asset.How about CAPM-like multifactor models, like theArbitrage Pricing Theory, which have become fund managementindustry standards? They work in the sense that regressingrisk premiums against a sufficient multitude offactors can explain more and more of an asset’s excess returnover the risk-free rate. This is an ad hoc procedure, notdeeply rooted within the Expected Utility Theory paradigmfavored by economists, who prefer to obtain equilibriumasset prices from investors’ beliefs, preferences, and endowments(as the CAPM does).Expected Utility Theory (EUT) is, very simply, a wayto rank gambles from best to worst. Consider two gambles,A and B. A: win $10 (50 percent) or lose $10 (50 percent).B: win $11 (50 percent) or lose $10 (50 percent). If theyboth cost the same, any rational person would prefergamble B to gamble A. This is, however, a very simple situationwith a very obvious answer. In more complex situations,as when an investor chooses among all the stockslisted on the New York Stock Exchange and puts togetheran investment portfolio, it is not as easy to decide whichstocks to choose and how much to invest in each stock.Expected Utility Theory provides the investor with one setof tools to rank all possible portfolios from best to worst,and to then choose a portfolio that is compatible with hisor her appetite for risk (a retiree’s optimal portfolio mightbe mainly in U.S. Treasuries, while a young woman’s optimalportfolio might be mainly in equities, with only a littlein Treasuries).Can we find a better set of tools for ranking portfolios,a set more in line with how investors actually express theirpreferences in the market? Can we find a way to calculatethe risk premium of an asset based on the latest understandingof how investors respond to risk and reward? Yes, butfirst some spadework.The assumptions underlying the CAPM are part of thestandard canon of finance and economics, and are not to betoyed with lightly. The underlying assumptions are (i) thatinvestors prefer more to less; (ii) that investors be riskaverse expected utility optimizers; and (iii) that asset returnsbe normally distributed. The first assumption, that investorsprefer more to less, cannot seriously be doubted,while the last assumption, that of asset normality, is a technicalrequirement for the CAPM to hold for a general classof concave utility functions (investors’ appetite for risk). Itis to the second assumption, that investors maximize theexpected utility of their total wealth, that we must look forchange.That individuals presented with gambles make choiceswhich violate the foundational axioms of EUT has beenknown since the work of Allais (1953) more than 50 yearsago. Since then, experiments in the laboratory and in thefield have revealed further systematic violations of theseaxioms (Camerer 1992). Many of the anomalies uncoveredhave a somewhat esoteric flavor, involving as they do violationsof the “independence” axiom, the “transitivity”axiom, and others. A more easily palpable anomaly regardingrisk aversion is provided by an example in Rabin andThaler (2001), who assert that despite the “central place”of “expected utility maximization of a concave utility-ofwealthfunction ... this explanation for risk aversion is notplausible in most cases where economists invoke it.”Rabin and Thaler (2001): Given that “Johnny is a riskaverseexpected utility maximizer, and that he will alwaysturn down the 50-50 gamble of losing $10 or gaining $11,”the authors ask “What else can we say about Johnny?Specifically, can we say anything about bets Johnny willbe willing to accept in which there is a 50 percent chance14 ❚ ANNUAL REPORT 2007-08

FACULTY REPORTSof losing $100 and a50 percent chanceof winning someamount $Y?” It turnsout that Johnny willshaped value functionhas a kink atthe origin; (iv)while utility iseverywhere concave,turn down anyvalue is con-such bet, no matterhow large Y is. Forexample, Johnnywill turn down a50-50 lose $10/win$2.5 trillion bet! Theonly assumptionsFigure 1: (a) A standard utility function defined over total wealthcave over gains andconvex over losses,i.e., investors arerisk averse whenthey’re winning andrisk-seeking whenthey’re losing – this(asset integration). The concavity of the curve ensures risk aversion.required to reachcaptures two facts:(b) A Kahneman-Tversky style value function defined over losses and gains ratherthis startling conclusionare that Johnnyprefer a sure gain oflaboratory subjectsthan over total wealth. Note (i) the kink at the origin of the value function, and(ii) the red lines indicating the pleasure (pain) caused by unit gain (loss).be an expected utilityThe relatively greater pain caused by unit loss is called “loss aversion.”$100 to the possibilityoptimizer withan increasing andconcave utility-of-wealth function. Rabin and Thaler (ibid.)go on to suggest that “Johnny would, of course, have to beinsane to turn down bets like” these. 1 Suffice it to say thatdecision theorists now regard EUT to be normative in character(how individuals should behave) rather than descriptive(how individuals actually behave).A very considerable effort has gone into formulatingalternatives that capture the systematic patterns whichemerge from field and laboratory experiments in which subjectsare presented with a variety of gambles (lotteries, alsoknown as “prospects”) and asked to choose among them.The weight of evidence suggests that the best candidates fora descriptive theory of choice must have two features: (i)an S-shaped relative value function instead of the monotonicallyincreasing and concave utility-of-wealth function usedin EUT, and (ii) a (subjective) nonlinear transformation ofthe probabilities associated with future outcomes, with verylow probabilities over-weighted (people buy lottery tickets),very high probabilities under-weighted (smokers discountthe risk of falling terribly ill), and mid-range probabilitiesleft unchanged. These “decision weights,” which need notsum to one, are used in place of probabilities when calculatingthe expected “value” of a risky prospect. Figure 1displays a typical EUT-style utility function in panel (a), anda typical behavioral value function in panel (b). Note that(i) utility is defined over total wealth, i.e., the outcomesfrom a gamble are added to pre-gamble wealth before calculatingexpected utility (this is called “asset integration”);(ii) value, however, is calculated without reference to theimpact on a subject’s current or reference wealth; (iii) the S-of winning$200, and that theyprefer the possibility of losing $200 to a sure loss of $100;(v) the slope of the value function over gains in panel 2(b)is less than that of the value function over losses – as thered lines in panel 2(b) indicate, unit loss in wealth causesmore pain than unit gain in wealth causes pleasure, i.e., investorsare loss averse. The combination of decision weightsand an S-shaped value function with the properties outlinedin (ii) through (v) goes a long way in accounting for thechoice behavior exhibited by individuals in real life(Camerer 1992), and avoids anomalies like EUT Johnny’s“insane” behavior.A CAPM-like Model for Loss AversionThe easiest way to obtain a CAPM-like relative pricingmodel for Prospect Theory-style loss averse investors is touse the geometric argument invoked by Sharpe (1964) toget the usual CAPM for mean-variance optimizers. The argumentis illustrated schematically in Figure 2 (see nextpage), using the familiar mean and volatility measures ofreward and risk. The horizontal axis represents the risk ofa portfolio of assets, while the vertical axis represents theassociated reward. The wedge-shaped region represents thefeasible region, i.e., all portfolios that can be constructedfrom available assets with a total investment of zero dollars(this is explained in a bit). A portfolio lying on the upperboundary is said to be efficient (or optimal) because it hasthe lowest risk for a given level of reward. The portfolio Ois one such optimal portfolio. Given an arbitrary portfolioX, we compute its reward (mean excess return over the riskfreerate, or historical risk premium) and its risk (the volatility,or standard deviation, of its historical excess returns)1 Rabin (2000), and Rabin and Thaler (2001) provide a compelling, and entertaining, view of problems that lurk within thestandard EUT paradigm.ORFALEA COLLEGE OF BUSINESS ❚ 15

FACULTY REPORTSand plot these numbers inrisk-reward space asshown in Figure 2. The redline passing through O andX represents all portfoliosthat can be put together usingO and X with a total investmentof $1. The dollarrequired for this investmentis obtained by firstshorting $1 worth of therisk-free asset (U.S. Treasuries,our reference asset),so that total investment inO, X, and the risk-free assetis zero. A typical portfolioobtained in this fashionmight look like this: risk-free ($1), O ($4.37), X ($5.37). TheSharpe argument goes thus: the tangent to the path tracedout by the portfolio family obtained by combining O and Xin all possible combinations that cost $1 (the red line) at thepoint where it meets the efficient frontier (the blue circle)must equal the slope of the efficient frontier. This simple intuitionis sufficient to obtain the usual mean-variance CAPMin all its glory (albeit after some algebra). 3The same argument can be applied to obtain a CAPMlikemodel for Prospect Theory–style investors, with theappropriate measures of risk and reward replacing volatilityand mean (see Dutt (2006) for details). Before presentingthe CAPM that obtains, it is instructive to look at thebehavior of paths in this new risk-reward space, pathsanalogous to that traced out by the zero-cost family of portfoliosdescribed in the preceding paragraph (the red line inFigure 2). Note, first, that as we move along the path fromX to O (in Figure 2) by using more of our $1 to buy O (andthe rest to buy X), the level of risk is intermediate betweenX and O. This, of course, is the whole point of diversification—splittingour investment among two (or more) assetscan decrease risk for a given level of reward. This happyconsequence follows from a mathematical property of therisk measure, viz., volatility is a convex function of its arguments,and satisfies what mathematicians call the triangleinequality.The situation that obtains in the risk-reward space appropriateto a Prospect Theory investor is rather more complicated.Figure 3 displays four sample paths in theFigure 2: Schematic of the Sharpe (1964) argumentrisk-reward space of aProspect Theory–style lossaverse investor. The pathsare, if nothing else, baroquein their profusion of kinks,curlicues, scallops, andcrossovers, features neverseen in mean-variancespace. This happens becausethe risk and rewardmeasures appropriate toProspect Theory do notsatisfy the properties of a“norm” in the mathematicalsense. In particular,they do not satisfy the triangleinequality, which thevolatility measure does satisfy. Consequently, diversificationdoes not always lead to risk reduction.Instead of writing down the (complicated) mathematicalexpression that is the analog of the usual mean-varianceCAPM, I shall, instead, discuss some of its consequences.In particular, it turns out that in a complete markets setting,i.e., in a market where any desired pattern of future payoffscan be obtained by putting together assets available in themarket, the optimal portfolio of a Prospect Theory-styleinvestor can be solved for analytically (Dutt 2006). Thedistribution of portfolio weights is such that the optimalportfolio’s excess return, measured relative to the risk-freereturn, is positive in all future states except in one state,where it is negative. 4This result is both pleasing and problematic. It is pleasingbecause it satisfies our intuition that a loss averse investorshould trade off (smallish) gains in as many states as hecan against (possibly largish) losses in as few states aspossible. Since the market is complete, the loss averse investorcan construct any pattern of payoffs, so she can arrangeto take all her lumps in a single state.The result is problematic because the pattern of excessreturns looks nothing like the real-world market portfolio’sexcess returns, which are symmetric about the marketportfolio’s mean excess return, and can have about as manyloss states as gain states.Does this mean that the we can rule out the possibilitythat the real-world market portfolio corresponds to thechoice a loss averse investor would make, implying that the2 The use of a value function and decision weights is outlined in the pioneering work of Kahneman and Tversky (1979), and inTversky and Kahneman (1992). Their theory of choice, known as Cumulative Prospect Theory, is one example of the emerging˚eld of behavioral ˚nance models.3 The space of zero-cost portfolios is used for reasons of mathematical convenience.4 A zero-cost portfolio with gains in all future states is not possible because it would set up an arbitrage.16 ❚ ANNUAL REPORT 2007-08

FACULTY REPORTSCAPM-like model developed for lossaverse investors is of no practicalsignificance? It turns out that in anincomplete markets setting – thesituation that obtains in the realworld – the optimal portfolio of aloss averse investor is more nearlysymmetric in gains and losses.The intuition for this is verysimple: since the market is incomplete,the loss averse investor cannotput together the portfolio shereally wants and must do the bestshe can with available assets. Thisresults in an optimal portfolioin which losses and gains are moreevenly balanced, thus allowing ourProspect Theory-style CAPM toremain viable as a model for thereal-world market portfolio, andas a potential alternative to theusual CAPM.ConclusionThe CAPM-like model correspondingto the choice behavior of aloss averse investor needs to betested against market data to gaugeits viability. Research along theselines is currently underway and willbe reported in a subsequent work.ReferencesAllais, Maurice, 1953, LeComportement de l’HommeRationnel devant le Risque:Critique des Postulats et Axiomesde l’Ecole Americaine,Econometrica 21, 503–546.Camerer, Colin F., 1992, Recent Tests of Generalizationsof Expected Utility Theory, in Ward Edwards, eds.:Utility: Theories, Measurement, and Applications(Kluwer, Norwell, MA ).Dutt, Samir K., 2006, Risk, Reward & Asset Pricing,Ph.D. thesis (University of California, Berkeley).Fama, Eugene F., and Kenneth R. French, 1992,The Cross-Section of Expected Stock Returns, Journalof Finance 47, 427–65.Kahneman, Daniel, and Amos Tversky, 1979, ProspectTheory: An Analysis of Decision under Risk,Econometrica 47, 263–92.Rabin, Mathew, 2000, Risk-Aversion and Expected-Utility Theory: A Calibration Theorem, Econometrica68, 1281–1292.Rabin, Mathew, and Richard H. Thaler, 2001, Anomalies:Risk Aversion, Journal of Economic Perspectives 15,219–32.Sharpe, William F., 1964, Capital Asset Prices: A Theoryof Market Equilibrium under Conditions of Risk, Journalof Finance 19, 425–442.Tversky, Amos, and Daniel Kahneman, 1992, Advancesin Prospect Theory: Cumulative Representation of Uncertainty,Journal of Risk and Uncertainty 5, 297–323. ■ORFALEA COLLEGE OF BUSINESS ❚ 17

FACULTY REPORTSOnlineBY KEVIN LERTWACHARAASSOCIATE PROFESSOR, INFORMATION SYSTEMSMost of us are probably not old enough to rememberthe time when music, as a performing art, was availablefor the enjoyment of a live audience only.Thomas Alva Edison changedthat. Not long after he invented aphonograph machine, the music recordingbusiness was born. Sincethen, music reproduction technologiessuch as vinyl records and compactdiscs have made it relativelyinexpensive to record and distributemusic. These technological advanceshave helped to enhance the sales andpopularity of recorded music. However,the advent of file compressionsoftware, coupled with peer-to-peerInternet applications, make it possiblefor virtually anyone to reproducerecorded music in a form that can beeasily distributed to the masses.In the midst of this online environment,copyright owners of musicface new challenges in protectingtheir intellectual creations. Musiciansand music companies claim thatonline file-sharing has caused a drasticdecline in record sales. Musiciansare not necessarily opposed to makingtheir works accessible online, butin the past, many digital contentswere made available without the consentof their creators.Although distributing and obtaininga copy of music without permissionfrom the music’s copyright owner is illegal, millionsof consumers with computer technology at their fingertipsexchange music files over the Internet. Unlike other illegalactivities, file-sharing seems widespread among individualsfrom all walks of life. In order to curtail widespread musicfile-sharing activities, the music industry filed lawsuitsagainst operators of file-sharing networks. Using these lawsuits,the industry was able to shut down Napster and othervThe Pirates in Your BackyardAlthough distributing andobtaining a copy of musicwithout permission from themusic’s copyright owner isillegal, millions of consumerswith computer technology attheir fingertips exchangemusic files over the Internet.Unlike other illegal activities,file-sharing seems widespreadamong individuals from allwalks of life.popular file-sharing networks. However, the legal victorywas short-lived. As soon as Napster was shut down, newfile-sharing applications (dubbed “Sons of Napster”) sprangup quickly and drew a large number of members to startnew, viable electronic networks for sharing music.Subsequently, the music industryturned its attention from filesharingnetworks and began toprosecute individual consumerswho allegedly shared music files ontheir computers with others. Priorto these lawsuits, individual participantsin file-sharing networks werealmost completely immune fromany liability associated with theironline activities. These lawsuits alteredthe notion of online anonymity.Publicity surrounding theselawsuits seemed to discourage onlya few consumers from illegallysharing music online.Throughout the legal confrontationsbetween copyright ownersand the file-sharing community,some companies successfullylaunched online music stores.Apple’s iTunes, Amazon.com, andRhapsody.com are among examplesof these online retailers. These retailersadumbrate a business modelappears successfully even in thepresence of online piracy.Part of my research is to observethe online behavior of consumerswho participate in onlinefile-sharing and who purchase musicon retail Web sites. My objective is to gain insight intoa possible successful business model that can be implementedin the presence of widespread online piracy.Enforcement of Copyright LawAfter a few years of ongoing lawsuits, there are still alarge number of file sharers and music files available fordownload on popular file-sharing networks. According tomy file-sharing activity data (see box), on any given day on18 ❚ ANNUAL REPORT 2007-08

FACULTY REPORTSdustry can adequately discourage filesharers and significantly reduce thesize of these networks below a criticalmass, these virtual communitieswill likely continue.The data collected showed thateven after the lawsuits against individualfile sharers and the publicitysurrounding them, a substantialnumber of individuals still participatein online file-sharing. In addition, thelawsuits that targeted individual consumerswere perceived by the publicas excessive and heavy-handed.Critics of the industry often arguethat the lawsuits were misguidedsince individuals who illegally downloadmusic files are usually attractedto file-sharing because it offers themsomething that the industry fails todo – individual music files that arenot bundled in a CD with additionalunwanted songs. In fact, some surveyresults have shown that people whoparticipate in file-sharing may evenpurchase the music after sampling iton the file-sharing network. After all,these individuals are potential consumersof music products who generallyare law-abiding citizens.Industry AnalysisBefore the Internet era, musicSince Internet users can sharemillions of files acrossgeographical boundaries, limitedlegal success is not likely to endillegal file-sharing activities.Individuals in the U.S. can stilleasily download files madeavailable by people in othercountries. Moreover, computerusers can use free softwareto help conceal their identitiesand reduce the chance that theywill be tracked and sued bythe music industry.a popular file-sharing network, there could be as many as and BMG), distributors, retail stores, and the consumers.two million individuals sharing over 200 million music files. Traditionally, there are five major global conglomeratesSince Internet users can share millions of files across geographicalboundaries, limited legal success is not likely to majority of copyright to the music products sold in retail(i.e., EMI, Warner, Universal, BMG, and Sony) that own theend illegal file-sharing activities. Individuals in the U.S. can stores. The Internet has led to the disintermediation of thisstill easily download files made available by people in other traditional supply chain. Now music can be purchased andcountries. Moreover, computer users can use free software obtained from online channels, bypassing distributors,to help conceal their identities and reduce the chance that brick-and-mortar retail stores, and even the music labelsthey will be tracked and sued by thethemselves. Artists can potentiallymusic industry. Unless the music in-gain more control over the marketingand distribution of their musicby setting up their own onlinestores or coordinating their effortswith the new online intermediaries.Understanding this new environmentin the recording industry isessential to creating successful businessstrategies.Pricing of music products:Traditionally, music products aresold as a bundle in compact discs(or, for those of us who still rememberthe ’80s, cassette tapes). Consumerscomplain that often timesthey only want a few tracks buthave to buy the entire CD for theprice of 10 or 12 songs. This and theperceived high price of music CDsare cited among the reasons thatlead to online piracy. Apple’s iTunesoffers an alternative for consumersto choose and purchase individualsong tracks as well as albumbundles. Some song tracks are evenavailable for download at no cost asa way to promote new artists.My data analysis indicates thatthe music titles that are among thetop selling titles on iTunes are alsoavailable on file-sharing networksfor download. Intuitively, the availabilityof these popular music titlesfans had limited options for obtaining recorded music. on file-sharing networks should have hurt the sales of theInternet technologies have expanded the available choices music titles. In reality, these music titles remain on iTunes’and transformed the supply chain structure of the industry. top selling list for a long period of time.The key components in the traditional supply chain Interactivity and Convenience: With the current informationtechnologies, it is inexpensive for an online store structure include the artists, the music labels (e.g., SonytoORFALEA COLLEGE OF BUSINESS ❚ 19

FACULTY REPORTSTracking online piracy activitiesIn order to take a closer look at the actual online my software is designed to track the top 100 bestsellingmusic files sold on Apple’s iTunes Webfile-sharing activities, I developed an automateddata collection process written in the C# language site, one of the largest online music retailers.using Microsoft’s .NET technology.Specifically, the Web agent is automaticallyThe data collection process is divided into launched daily to extract the sales ranking informationfrom iTunes’ Web page that is formattedthree different modules. The first data collectionmodule is designed to collect aggregate file-sharinginformation on file-sharing networks. This Web XML code is translated into data maintained in ain the extensible markup language (XML). Theagent collects online data that include the number Microsoft SQL Server database.of individual participants and the number of musicfiles they share, without interfering with the information from iTunes’ best-selling music filesThe final data collection module takes theactual file-sharing activities on the network and and conducts daily Boolean searches on thesewithout engaging in any illegal file-sharing activity. music files on peer-to-peer networks. The searchThe second Web agent is designed to collect result is then summarized and stored in a SQLproxy information on the sales performance of Server database file. This data collection procedureis performed without downloading anypopular music singles. Since the actual sales statisticsof music products in the U.S. are proprietary, copyrighted material.customize its product offerings to each individual customer.For example, an online retailer can enable its Web site toallow consumers to customize the content to their personalpreferences. In addition, the customization can remain onthe consumer’s personal account even when the consumerlogs on to different locations or portals (e.g., from a mobiledevice, from home, or from work). Moreover, a digital fileis usually easier to transport and archive than computerstorage media (e.g., CDs). On average, a music CD holdsabout 12 to 15 songs in a traditional file format, comparedto almost 200 songs in the MP3 format. This file compressioncapability allows consumers to carry small play-backdevices (e.g., iPods or cellular phones) that contain a largelibrary of music.Product Variety: Another critical advantage of anonline store is that a larger variety of products can be offeredto customers without the limitations inherent in physicalshelf space. Moreover, these digital contents are easierto catalog and archive. As a result, consumers can easilysearch and locate the songs they want. With this ability, anonline store can attract consumers to its site by offeringhard-to-find songs that are usually not available in a brickand-mortarstore.Based on my data analysis, some of the best sellingmusic titles on iTunes are not the titles currently on theBillboard Chart, which is based on the sales of music CDs.In fact, during a three-month data collection period, out of271 song titles that appeared on iTunes’ best selling chart,20 percent were older songs that were released more thanthree years ago. These older songs are generally hard to find(if at all available) for purchase in local music stores.Furthermore, almost 40 percent of the top selling titleswere first released at least two years ago. This means thata large number of music consumers would welcome and bewilling to pay to access a Web site that allows them to findmusic titles that may be hard to find in local music stores.These online capabilities can also be used to enhance servicesoffered in a traditional brick-and-mortar store.ConclusionThe services and features provided by online retailersare made possible by technologies similar to those that allowindividuals to pirate these same products. Based on myobservation of online file-sharing activities, increased enforcementof copyright laws has not effectively stoppedonline piracy. Enforcement of copyright laws is not only acostly way to combat the piracy problem, but can also causea backlash of feeling against the music industry. In addition,allowing consumers to purchase and use digital contentswithout excessive restrictions can be profitable even in thepresence of online file-sharing. Examples of online retailstrategies and services also suggest that the technologiesthat have been used by file-sharing networks can also beimplemented to benefit musicians and record companies aswell as to fulfill the need of customers. ■20 ❚ ANNUAL REPORT 2007-08

FACULTY REPORTSExplaining World TradeBY KATHRYN G. MARSHALLASSISTANT PROFESSOR OF ECONOMICSThe growth of global trade in the last several decades offersan exciting area of research for economists. Nocountry better illustrates the potential for trade thanChina, which is now one of the largest trading countries inthe world. Since coming to Cal Poly in 2007, my researchin collaboration with Cal Poly Professor Eric Fisher hasfocused on theoretical and empirical methods to betterunderstand the driving forces of world trade, and I have appliedthese new ideas to help explain China’s remarkabletrade growth. In this article, I will sketch the main featuresof this research and highlight some significant findings.Input Output AnalysisTo understand the pattern of international trade, onemust first look carefully at the structure of productionwithin each country. Economist Wassily Leontief pioneeredthe use of the input output table in the 1940s tomodel the intricate linkages between different industries ina modern economy. Each industry or sector in an economyproduces goods which are in turn used as intermediate inputsin the production of other products. When we measuregross domestic product (GDP), we capture only the finalstage in that complex production process. For example, inthe U.S. economy, the production of one dollar’s worth ofoutput in the automotive sector requires about $0.03 worthof products produced in the rubber and plastics sector andabout $0.05 worth of iron and steel products. In total, about$0.76 per dollar of intermediate inputs from all sectors ofthe U.S. economy goes into the production of automobiles.The remaining $0.24 per dollar of automobile productionmeasures the most important component in any productionprocess: value-added. To a business professional,value-added is better known as profits (paid to the ownersof capital) and wages (paid to workers). Economists callthese two special inputs, capital and labor, factors of production.In the automotive example, the $0.76 worth of intermediateinputs is itself produced by workers and capitalin other sectors, sectors which in turn use intermediateinputs combined with the services of workers and capitalto produce output. While this may seem like an infiniteregression, a simple mathematical technique converts thedollar value of any final product into payments to capitaland labor used directly to produce that product and indirectlyto produce all the intermediate inputs that went intothe product. For the U.S. automotive industry, when thisfull accounting is undertaken, each dollar’s worth of automobileproduction amounts to a payment of $0.31 to ownersof capital and a payment of $0.69 to workers throughoutthe economy. Labor intensive industries are defined as industrieswith a higher payment share to labor.Two different economies can be readily compared usinginput output tables. Thanks to the efforts of the Organizationof Economic Cooperation and Development(OECD), detailed and consistent input output accounts areavailable for many countries of the world. To compare theU.S. and Chinese economy, Table 1 summarizes these detailedaccounts into four major sectors – agriculture, mining,manufacturing, and services. I have also added data onemployment in each broad sector taken from the InternationalLabor Office.The most notable feature of the Chinese economy isthe huge labor force of around 721 million workers, equalto about five times the size of the U.S. labor force. But noticealso the disparity in wages across sectors. Overall, theU.S. average wage is about 19 times higher than the Chineseaverage wage. This is a clear indication that the productivityof labor is different in these two economies. U.S. workersTable 1: A Comparison of the U.S. and Chinese economies in 2000USAAgriculture Mining Manufacturing Services TotalPayments to Capital ($ billions) 71 71 496 2,985 3,624Payments to Labor ($ billions) 32 38 948 5,176 6,193Employment (millions) 3 1 20 111 135Average Wage $ 9,223 $72,204 $ 47,558 $46,505 $ 45,806ChinaAgriculture Mining Manufacturing Services TotalPayments to Capital ($ billions) 44 83 496 446 1,069Payments to Labor ($ billions) 416 59 561 737 1,773Employment (millions) 334 6 80 301 721Average Wage $ 1,248 $ 9,811 $ 6,978 $ 2,448 $ 2,459ORFALEA COLLEGE OF BUSINESS ❚ 21

FACULTY REPORTSare paid more because they are able to produce more, andthis higher productivity is itself a reflection of education,more and better technology and capital, and a pattern of incentivesthat make the U.S. economy one of the richest inthe world. This insight is often lost in the public debate oninternational trade. “Cheap labor” to an economist is laborthat produces less, and these differencesin productivity must be takeninto account when evaluating thetrade potential of an economy.Why Countries TradeDuring the 1980s, theoretical explanationsof international trade focusedon explaining the rapid growthin trade between countries at similarstages of economic development. Forexample, industrial countries exportand import automobiles from otherindustrial countries. The theoreticalexplanation of this intra-industrytrade is based on economies of scalethat allow firms in each nation tospecialize in a particular type of automobile,thereby offering consumersa variety of choices. China’s rapidemergences as a major world traderevokes an older international tradetheory first developed by Swedisheconomists Eli Heckscher and BertilOhlin in the 1930s. The Heckscher-Ohlin model argues that trade occursbecause of different factor endowmentsthat give countries with lots oflabor relative to capital a comparativeadvantage in producing goodswhich require more labor. In otherwords, trade in goods masks the underlyingtrade of factor services.The Heckscher-Ohlin model assumesthe same industries in differentcountries have the same laborproductivity, but countries specializein those industries which use theirown abundant factors the most intensively. An even oldertheory dates back to David Ricardo who wrote in the early1800s and whose ideas are still found in economic textbookstoday. Ricardian trade theory argues that comparativeadvantage reflects differences in labor productivity inthe same industry between countries, so countries will specializein activities where they have the highest labor productivity,and exchange these products with countries moreefficient at producing other goods.China’s rapid emergences as amajor world trader evokes anolder international trade theoryfirst developed by Swedisheconomists Eli Heckscher andBertil Ohlin in the 1930s.The Heckscher-Ohlin modelargues that trade occurs becauseof different factor endowmentsthat give countries with lotsof labor relative to capital acomparative advantage inproducing goods which requiremore labor. In other words, tradein goods masks the underlyingtrade of factor services.All three of these theories can help explain differentfeatures of world trade today. Even for a developing nationlike China, 58 percent of international trade occurs withinthe same industries. This substantial figure reflects in partthe limitations of input output data, which only identifies48 separate industries. A finer categorization would nodoubt reduce the degree of intraindustrytrade. If we limit our focus totrade between different industries,and start out with the simplifyingHeckscher-Ohlin assumption thatthere are no substantial differences inlabor productivity among countries,we quickly reach some remarkableand implausible conclusions aboutthe trade potential of the Chineseeconomy.The Factor Content ofChinese TradeThe factor content of trade isbased on input output analysis whichconverts the value of any product intopayments to labor and capital thatwent into its production both directlyand indirectly. Hence we can measurethe factor payments necessary to producethe exports of a given country,and simply subtract the factor paymentsnecessary to produce thecountry’s imports to arrive at themeasured factor content of trade.Consider the production of textiles,China’s largest export industry. Theproduction of one million dollars oftextile exports represents $660,000 inpayment to workers and $340,000 inpayment to capital. These paymentscan in turn be equated to the stock ofcapital and the number of workers bydividing by the rate of payment toeach factor, as illustrated in Figure 1(constructed with U.S. payments forcapital and labor).A similar computation can be made for chemicalproducts, China’s largest import. Chemical production ismore capital intensive so a larger share, equal to $0.43 perdollar, of the value of chemical products represents paymentsto capital. Not surprisingly, China’s imports are onaverage more capital intensive than China’s exports, inaccordance with the Heckscher-Ohlin theory of trade.The Heckscher-Ohlin theory predicts that a country’sfactor content of trade is determined by the country’s own22 ❚ ANNUAL REPORT 2007-08

FACULTY REPORTSFigure 1: Measuring Factor Content$1 million oftextile production equalspayments for ...... the services of $2.5 millionworth of capital(land, buildings, machinery)... the services of 14 workersfor one year.supply of labor and capital relative to the world supply. Alabor abundant country like China will only export the servicesof its “excess labor”. The excess is determined by subtractingfrom the country’s total labor supply the servicesof labor that the country will itself consume. For example,China accounts for 9 percent of world consumption, soChina is predicted to export the services of its own laborsupply of 720 million less what it uses in producing for thehome market, equal to 0.09 times the world labor supply ofabout 1.4 billion consumption (as measured by my sampleof 33 countries). Hence China is predicted to export theservices of almost 600 million workers!Many empirical studies of the Heckscher-Ohlin modelhave shown that these predictions vastly over-predict thefactor content of world trade, and China is no exception. Infact, if we assume labor is as productive in China as in theU.S., my research indicates as of the year 2000 China onlyexported the services of 1.9 million workers. Of course thequestionable assumption is that China’s labor is equivalentto U.S. labor. Table 1 demonstrates that if wages are any indication,labor in the U.S. is much more productive thanlabor in China. A more subtle feature of this data is thatthese differences in productivity vary across sectors.A key element of my research is how to best accountfor differences in factor productivities when predicting thefactor content of trade. Using input output data, I first determinehow much U.S. labor and capital using U.S. productiontechniques would be necessary to produce China’sGDP. By comparing this to the actual amount of China’slabor and capital, I can determine the productivity ofChina’s labor and capital relative to the U.S. These productivityadjustments equate one person-year of labor in theUnited States to about 17 person-years of labor in China.Once these differences are taken into account, China ispredicted to export the services of only 3.3 million “U.S.equivalent” workers, much closer to China’s measured laborcontent.The productivity-adjusted Heckscher-Ohlin predictionsof the factor content of trade are highly accurate for mostcountries. In a group of 33 countries, the predictions correctlydetermine whether a country will export labor orcapital in 59 of 66 possible cases. The predictions also rankcountries from largest factor exporter to largest factor importerwith a high degree of accuracy when compared to themeasured factor content rankings. The range of productivitydifferences among countries reflects different skills of theworkforce and different areas of industrial expertise thatconfer comparative advantage over and above the numberof workers or the dollar value of capital, as Ricardian tradetheory first suggested. China has gained world ascendancyexporting labor-intensive goods with a very low level oflabor productivity. As China’s labor force improves in skills,China’s role in world trade will continue to evolve, but nodoubt remain momentous. ■ORFALEA COLLEGE OF BUSINESS ❚ 23

Academics

ACADEMICSAccounting program welcomes Carillon software giftThe Orfalea College of Business hasreceived a gift of software fromCarillon Financials Corporation toteach enterprise resource planning(ERP) systems to accounting students.In their forthcoming textbook,Arline Savage, Ph.D., CA (SA),accounting professor and Deloittefaculty fellow at Cal Poly, and coauthorRoberta Anne Barra, Ph.D.,CPA, assistant professor of accountingat the University of Hawaii at Hilo andformer Cal Poly professor, focus onteaching students how to use accountingsystems using Carillon ERP. Barrapreviously worked with the Carillonteam when she reviewed ERP packagesfor the Journal of Accountancy in2002, and named Carillon as one ofthe Top Ten Mid-Level ERP Packages.Savage and Barra selected thecompany based on its previous experienceand the performance of theCarillon product.“We have always been extraordinarilypleased with the responsivenessand systems knowledge of the entireCarillon team,” said Barra and Savage.“It is a pleasure working with a pro-For the 16th year in a row, Cal Polyhas been rated the best publicmaster’suniversity in the West byU.S. News & World Report, in its 2009“America’s Best Colleges” guidebook.Cal Poly ranked 10th in themagazine’s overall list of the West’sbest universities, including bothpublic and private institutions, thatprovide “a full range of undergraduateand master’s-level programs butfew, if any, doctoral programs.”U.S. News ranks colleges thatgrant doctoral degrees, such as thosein the University of California system,in a separate category.Cal Poly President Warren J.Baker observed, “We are veryfessional team that delivers what theypromise on a timely basis.”Carillon founder, Larry R. Pettit,met the professors’ needs by supplyingstudent versions of Carillon ERPto help train them for their future inthe accounting field. Pettit will speakto the students prior to their use ofthe software.Barra and Savage plan to presenttheir new course project in workbookform at the AIS Educators’ Conference.“We are honored to have beenselected as the ERP system showcasefor this course,” said Pettit. “Whenthe course is presented at the AISEducators’ Conference, we hope toimplement our classroom trainingtool into more universities, allowingaccounting students to gain experiencewith ERP systems before enteringthe workforce.”Founded in 1990, CarillonFinancials Corp. is the developer ofCarillon ERP/CRM, a richly featuredreal-time, global ERP/CRM systemthat has been customized to work inmany different industries. Fullyintegrated with Microsoft® SQLServer® 2005 and Microsoft® Office2007, its real-time functionality andInternet capability provide up-to-thesecondexecutive information.Carillon has installationsthroughout the USA, Canada, theSouth Pacific and Hong Kong. Thevarious functions Carillon supportsare accounts payable, accountsreceivable, financials, inventorycontrol, sales order processing,purchase orders, production orders,job costing and profitability, time andbilling, payroll, contact relationshipmanagement and mobile workforce.Carillon is a Microsoft® GoldCertified Partner and was reviewed inThe Journal of Accountancy as one ofthe leading ERP systems. Additionalinformation can be found atwww.CarillonERP.com.Carillon is a registered trademarkof Carillon Financials Corp. All othertrademarks are the property of theirrespected owners.For 16th straight year, Cal Poly is ‘Best in the West’ in U.S. News rankingspleased with Cal Poly’s continued No.1 ranking. For 16 years Cal Poly’sfaculty have been recognized for theiroutstanding work in educating thebest and brightest students andhelped them become successful andproductive members of California’sworkforce. We are also very proud tobe home of the No. 1 undergraduateengineering program in the nation. Itis great to be able to start the academicyear with another exemplaryshowing in the U.S. News rankings.”The U.S. News rankings, availableat www.usnews.com, are in theU.S. News & World Report magazinethat went on sale Aug. 25.ORFALEA COLLEGE OF BUSINESS ❚ 25

ACADEMICSRyan Moore, a recent graduate ofCal Poly’s Orfalea College of BusinessMBA program, thought he had heardenough pre-departure speakers,read enough books, participated inenough online blog discussions,seen enough videos and photos, andheld enough discussions to know,at a basic level, what to expectabout the People’s Republic ofChina and India when he arrivedin those two countries.However, upon arrival alongwith 41 other Orfalea MBA and M.S.in Industrial Technology students inJune, he realized that what he hadstudied beforehand was only thebeginning of his learning.“I took a number of great experiencesand memories away fromthis trip, both personal and businessrelated,” said Moore, who returnedfrom the trip to his business consultingjob at RLG International inThe Times newspaper in Delhi, IndiaMBA and MS in ITstudents take astudy tour to‘Chindia’(China & India)Alaska. “For me, China means apowerhouse of growth, innovationand determination to succeed; andIndia represents raw, challengingopportunities requiring a focus to seeand implement. I now better understandwhy these two countries areone of the success stories of our timeand my generation.”Moore and his classmates, allOrfalea College MBA and M.S. inIndustrial Technology students,were taken to China and India byOrfalea Associate Dean of GraduatePrograms Chris Carr, AssistantGraduate Programs Director VickiWalls, Industrial Technology AssociateProfessor Jay Singh and Singh’swife, Ineetu Bali. During the 18-daytrip, the group visited six cities, over20 firms, one port facility, threeuniversities and enjoyed numerouscultural excursions.“We felt we could take studentlearning to the next level by addingIndia to the normal itinerary ofChina so the students could gainmore meaningful compare-andcontrastpoints,” said Carr. “Thisproved to be a good call. The firmvisits and the CEOs, managers andemployees we met this year in bothcountries were outstanding, and this26 ❚ ANNUAL REPORT 2007-08

ACADEMICStrip continued to push students andtake them out of their comfort zones.Several students were even hired towork in China as a direct result ofour visit to these firms.” (See story,next page).Students met executives, managersand workers while visitingthe offices and factories of a numberof small, medium and multinationalfirms, including Adora Jewelers,Cinevistaas Studios, Genpact,Google, Hip Fung Electronics,Indian Institute of Packaging,Lenovo, Nokia, Ogilvy and Mather,Parsvanath Developers, Plantronics,Portola Packaging Company, PositecMachinery, Subway, Inc., SuzhouIndustrial Park, Times of India,United Family Hospitals of Beijing,United Foundation for ChineseOrphans, Wockhardt Hospitals, andYangshan Deep Water Port.During their travels, whichincluded visits to Shanghai, Beijing,Suzhou, New Delhi, Agra andMumbai, the group also met with adocumentary filmmaker whoselatest release is a film on theBeijing Olympics, a graphic communicationand marketing entrepreneur,several sustainable tourism entrepreneurs,and an expatriate running anonprofit organization in China thatassists rural schools in developingtheir libraries.“Through these visits to firms,coupled with our off time, we wereable to touch on virtually every facetof our M.S. in Industrial Technologyprogram,” said M.S. in IndustrialTechnology student Steve Munio,now a supply chain agent at ViaSatInc. in Carlsbad. “The MBA studentsfelt the same way with respect totheir curriculum.”MBA student William Jenckssaid the trip and course offered anincredibly valuable experience.“They provided both insightsinto the global economy and strategicnetworking opportunities that Iwill be able to utilize for the rest ofmy career,” said Jencks, now anarchitectural designer in San Diego.“It was a truly one-of-a-kind journeythat was made possible by theremarkable network and logisticscontrol and planning of the Orfaleaadministration, and our host companiesin Asia.”At the Taj Mahal,Agra, India (above,from left): BrandiEng-Rohrbach,Robyn Bowie,Naomi Guy, AshleyDrum, Tai Massion,Dena Malloy andAndrea GreenleeTaking in the sightson a side trip toYuYuan Gardensand Temple inChina (left)Students posted a day-by-dayaccount of their MBA “Chindia” tripon the trip blog that Professor Carrutilizes for the course and trip. Thejournal entries – postings starting inmid-June 2008 and continuingthrough early July 2008 – can beviewed at www.calpolymbatrip.com.ORFALEA COLLEGE OF BUSINESS ❚ 27

ACADEMICSGlobal careers launch inthe Pearl River DeltaWhen Orfalea College of BusinessMBA student Matt Fencl was growingup in Kansas, he never dreamedhe would one day pursue his MBA atCal Poly, travel to China and India aspart of his studies, meet a successfulChinese businessman who ownsseveral factories in China, be offereda management-level job at a 3,000-plus-worker factory in Shenzhen(located in southern China, nearHong Kong and along the famousPearl River Delta), and start that jobjust several months after graduating.“I am incredibly grateful andexcited for this opportunity. I can’twait to get started,” said Fencl.MS in Industrial Technologystudent Richard Ciesco of Rocklin,who took a job with the same firmas a result of connections made onthe trip, echoed Fencl’s excitement.“Before leaving for China andIndia, I had never seriously thoughtabout starting my career in Asia.Once I arrived, however, based onwhat I saw and learned, I felt like Ihad what it takes to do businessHip Fung Electronics in Suzhou, China“... Based on what I saw andlearned, I felt like I had what ittakes to do business there, and Idecided to pursue this amazingjob opportunity in China.”– Richard Ciescothere, and I decided to pursue thisamazing job opportunity in China.”Leader of the trip, Chris Carr,associate dean of Graduate Programsat the Orfalea College of Business,noted, “This is one of the reasons wedo this. Kudos to Matt and Rich forgetting their business cards together,updating their résumés, successfullyCal Poly Businessgraduates (from left)Richard Ciesco and MattFencl, and their newboss, Lawrence Wong,owner of Hip FungElectronicsselling themselves and their skill setsto this firm, following up, and beingselected from the competition.”Chinese businessman LawrenceWong, owner of Hip Fung Electronics(http://www.hipfung.com.hk/products_set.htm) where the studentswill work, warmly welcomes the twoCal Poly students.“Their hiring is a win for us,”said Wong. “Through their eyes,ears, training and backgrounds,my firm and managers will beable to learn more about howwestern clients, employees andfirms think and implement.This will in turn make us a moreeffective company.”Fencl and Ciesco began workingfor Wong in October. Fencl’s positionwill focus on project management,and Ciesco’s position will focus onengineering management.28 ❚ ANNUAL REPORT 2007-08

ACADEMICSChange of direction for the Student Managed Portfolio ProjectThe Student Managed PortfolioProject (SMPP) was started over adecade ago by Finance ProfessorJohn Lindvall, a retired facultymember of the Orfalea College ofBusiness. Lindvall envisioned atwo-term senior project course thatoffered a select group of financeseniors the opportunity to manage asmall part of the University’s endowmentfunds (currently $550,000).The goal of the SMPP is for CalPoly’s top finance students to takethe knowledge they have gained intheir classes and apply it to realworldstock selection and portfoliomanagement, in line with Cal Poly’slearn-by-doing philosophy. The fundhas accumulated a superb trackrecord, outperforming the S&P-500index every year.The SMPP fund established byLindvall had been supervised byfinance faculty members Ken Rienerand Larry Gorman in recent years.Starting in the fall of 2007, thefaculty supervisory task was assumedby Finance Area Chair CyrusRamezani. This change in fundmanagement structure, a daily fact oflife in money management business,necessitated a comprehensive reviewof the fund’s past performance and adetailed assessment of the currentpositions of the fund’s 22 stocks.Before the fall term began, itwas apparent that entering fundmanagers (seniors) would have towork with the client (the University)to draft a fund prospectus and investmentstrategy that would bereflective of the client’s risk tolerance,portfolio objectives, and theclient’s investment horizon.Moreover, the student managerswould need to devise a tradingstrategy consistent with the fund’sprospectus, write quarterly andannual reports detailing their tradesand the fund’s performance, learnand make use of standard toolssuch as the Bloomberg and ReutersBridge Station terminals, and finallydesign and build a Web page for thecourse that would inform futureseniors with an interest in fundmanagement careers.States Ramezani, “I felt thestudents needed to commit an entireacademic year to the course giventhe extent of work we had to getdone. The students’ learning wouldalso be enhanced as they would gainvaluable hands-on experience infollowing markets and the stocksassigned to them over a longer spanof time. To the extent possible, wewanted to pattern and organize theclass after real-world funds.”Therefore, the students wereassigned to one of four teams. TheResearch Team’s initial task was toissue recommendations for thestocks that comprised the SMPPportfolio by consulting analysts’reports and the company’s financialstatements, as well as issuing recommendationfor future additions to theportfolio. The Trade Execution Teamwas given the responsibility todetermine the best time to executethe trades the class had agreed upon.The Public Relations Team was giventhe responsibility for drafting quarterlyand annual reports, workingwith the client to draft a prospectus,and creating the materials for thecourse Web page. Finally, theInformation Technology Team wasgiven the responsibility for masteringthe use of the Bloomberg andReuters terminals, creating databases,and maintaining the runningticker and the electronic panel thatshowed the performance of the fundin real time.All students were required toread financial press on a daily basisand were called upon to discusscurrent economic developments andthe state of financial markets.During the fall term, studentscollectively developed a new prospectus,with the stated objective “tobeat the return on S&P 500 index by1 percent per year.” The strategy toaccomplish this goal was developedover the rest of the term. Each studenthad his/her own idea of howthe SMPP should be positioned toSEE SMPP, NEXT PAGEThe StudentManaged PortfolioProject is held inthe FinancialAnalysis ResourceLab, which wasinitially fundedby a generouscontributionfrom ThomasDeRegt (BusinessAdministration ’80).ORFALEA COLLEGE OF BUSINESS ❚ 29

ACADEMICSSMPP CONTINUEDachieve its objective. To develop asense for how alternative strategiesmay perform, each student wasgiven a fictitious portfolio, identicalto the SMPP portfolio, and $500,00in cash. Students were then free topursue any trading strategies usingall available financial instruments,including stocks, bonds, foreignexchange, and options.An external company (StockTrakInc.) monitored student portfolios andsent weekly reports to Ramezani. Thestudents’ course grades were linkedto the performance of their individualportfolios. This gave the studentsthe incentive to test their ideasin a careful and responsible manner.The student portfolios showed spectacularsuccess (over 300 percentannual returns) and great failures(100 percent loss of initial capital).Ramezani noted that “the lessonfrom this exercise was that complicatedinvestment strategies, usingoptions and derivatives, wereincompatible with the SMPP investmentphilosophy, as these strategiesexposed the fund’s capital tosignificant risks.”After much research and deliberation,the students designed theSMPP’s “enhanced indexing” investmentstrategy, which relies on sectorExchange Traded Funds (ETF) andselected individual equities. Basedon simulation analysis undertakenby the class, the fund’s neutralcomposition would be 75 percent insector ETFs that mimic each segmentof the S&P 500 index. Within eachsegment of the index, studentswould also choose a pure play position(a company that has a lowcorrelation with the returns on theunderlying sector and the S&P 500).The remaining 25 percent of thefunds capital would be allocated toalternative investments such as realestate, emerging markets and fixedincome securities.The portfolio transition processclaimed much of the winter andspring terms. The students had toconduct the proper due diligence toselect the appropriate ETF and thepure plays. The class divided up intogroups that specialized in specificsectors of the market (industrials,financial, utilities, etc). Each groupidentified the best sector ETF (highestreturn correlation with the sectorand the lowest expense ratio) andthe best pure play in that sector.Once the ETFs were chosen,the students took a step back andtook a macro view of each sector,trying to understand how differenteconomic events would affectthe performance of the portfolio.Then the students took a bottom-upapproach by researching eachunderlying company within eachETF to get a full understanding ofthe whole portfolio’s holdings.Once the preliminary researchwas completed, students formulatedstrategies for transitioning from thelegacy portfolio to SMPP’s newenhanced index portfolio. At thispoint, students invited a number offund managers, including PaulOrfalea and Lance Helfert of WestCoast Asset Management, ChrisMonroe of JHL Fund, and PhillipCohl of Smith Barney and UBS, todiscuss their investment strategiesand comment on the SMPP’s plans totransition to its new portfolio. Thegeneral consensus after consultingwith these and other professionalswas to liquidate the portfolio'scurrent holdings. Based on students'analysis, limit orders were used tosell existing stocks and move into anew portfolio consisting of the targetExchange Traded Funds (ETFs).Developments in the financialmarkets during this period broughtneeded realism and much excitementto the class. The unfolding subprimecrisis, the energy and commodityprice increases, the failureof major financial firms, and thegeneral down-turn in the worldeconomies forced the students tofocus on the developments in thefinancial markets.Indeed, a few students heldseveral emergency meetings todiscuss economic news and itsimpact on SMPP’s holdings. In onemeeting, students identified ninestocks as being a major risk to theportfolio and liquidated their positions.These trades occurred a day before themarket dropped over 300 points, and afew of the holdings that were solddropped by over 15 percent.Ryan Fry (Finance ‘08), studentleader in the course, states, “Themost valuable lesson we learned isthat professional money managersmust continually monitor the markets,even if they don’t plan to tradeevery day. The SMPP was lucky tohave real-fund managers with differentinvestment and timing strategiesspeak to our class.“For example, Paul Orfalea andLance Helfert introduced us to valueinvestors with portfolios that containrelatively few but well-researchedstocks. I was amazed to learn thatMr. Orfalea and Mr. Helfert spentover 200 hours on research, includingcompany visits, before theyinvested in the stock of any company.Their investment approach isbased on patience and extensive duediligence. Mr. Orfalea and Mr.Helfert taught the class a majorlesson: that investing need not be arigid mechanical exercise and thatthere is room for creativity in financeand such creativity can lead tosignificant rewards.“They detail their investmentphilosophy in their book, “TheEntrepreneurial Investor: The Art,Science, and Business of ValueInvesting,” and they gifted anautographed copy to each student inthe class.SEE SMPP, NEXT PAGE30 ❚ ANNUAL REPORT 2007-08

ACADEMICSBetter job opportunities andhigher salaries await studentswho pass series of CFA examsFor over three decades, the CharteredFinancial Analyst (CFA) Institute hasoffered an international professionalcertification to financial analysts whocomplete a series of three exams.A candidate must have abachelor’s degree or be in the finalyear of his/her bachelor’s degreeprogram or have at least four yearsof professional work experience inorder to take the exams. Candidatesmust pass all three in order tobecome CFA Charterholders andagree to comply with the strict CFAcode of ethics.The pay-offs to passing the CFAexam include better employmentopportunities, higher starting salaries,and a more rewarding career asFinance students rise to the CFA challengea finance professional. The CFACharterholders typically assume toppositions as investment professionalsor become CFOs of corporations andprivate firms. It is for these reasonsthat the CFA designation is consideredby many to be the “gold standard”for finance professionals and aviable alternative to an MBA degree.For those finishing their bachelordegrees, the Level 1 exam representsthe most challenging obstacleto overcome. The June 5, 2008edition of The Economist reportedthat 175,000 candidates took theLevel 1 exam last June with a passrate of less than 35 percent. SeventeenOrfalea College of Businessfinance seniors, advised by FinanceArea Chair Cyrus Ramezani, wereamong those who attempted theexam. The pass rate among thisgroup of seniors was 65 percent,nearly double the overall pass rate.All students who passed the examare now successfully employed.Ramezani said, “We are proudof all Cal Poly students who rose tothis challenge. Our six students whofailed this round still placed in thetop 10 percent of those who did notpass the June exam. This means theymissed fewer than 10 questions on atest with 240 questions! I’m sure theycan overcome this hurdle next time.“We hadn’t been tracking ourstudents’ success on the CFA examin the past, but when MattsonFernandez (Finance ’07) successfullypassed the Level 1 exam on hisfirst try and was hired by MerrillLynch, we realized that we shouldmake the CFA a formal program atthe Orfalea College of Business,”stated Ramezani. “After extensivediscussions with students andfinance faculty, we formed a CFASEE CFA, NEXT PAGESMPP CONTINUED“Phillip Cohl, who has beenmanaging funds for over 42 years, isalso a long-term investor, but heonly selects companies that haveincreased their dividends over thepast 10 years. Despite his simpleselection criteria, Mr. Cohl alsodevotes a significant amount of timeto researching target companiesbefore investing in them. We werefortunate that Mr. Cohl attendedmost class sessions during the yearand shared his perspectives on themarkets and our investment decisions.“The SMPP also was graced by avisited from Chris Monroe, a hedgefund trader who manages over 200positions with total assets valuedexceeding $500 million. Mr. Monroegave the SMPP a look into ‘a day inthe life of a trader’ and shared hisviews on how to choose the besttime to execute trades.”The SMPP had fully transitionedinto its new investment positionlast June before the term ended andthe participating seniors graduated.The fund has outperformed itsbenchmark over this period.Representatives from the SMPPreported on the fund’s transitionand its performance to the Cal PolyCorporation’s Investment Committeeduring the spring term.“We are lucky to be granted theopportunity to manage part of theUniversity’s endowment funds. Thishas been a win-win situation for theentire university community,” saidProfessor Ramezani. “The businessfaculty and students are grateful forthis opportunity, and we particularlywish to thank Ron Weaver of theCal Poly Corporation for his supportof this educational opportunity sincethe SMPP’s inception.”What is planned for 2008-09?The incoming students will have toassess the fund’s positions, continueto develop strong relationshipswithin the industry, complete unfinishedprojects and create an advisoryboard comprised of industry professionals.The SMPP students will completethe course Web site showcasingthe students, their research andthe performance of the fund. Thestudents plan to showcase theirOrfalea College of Business financetraining by participating in nationwidestudent-managed portfoliocompetitions and by inviting investmentbanks and money managers torecruit our graduates.For further information regardingthe Student Managed PortfolioProject, please contact CyrusRamezani at cramezan@calpoly.edu.ORFALEA COLLEGE OF BUSINESS ❚ 31

ACADEMICSCal Poly Accounting Clubrated tops in 2007-08The Cal Poly Accounting Club(CPAC) was named Club of the Yearin the Orfalea College of Businessby the Business Student Councilfor 2007-08.Judging is based on professionaldevelopment opportunities offered toclub members, community service,involvement in Orfalea College ofBusiness activities by members ofthe club, social events, co-sponsoredevents, and attendance, as well asclub philanthropy.As Club of the Year, CPACreceived a $300 gift from the BusinessCouncil, a plaque which will betheirs to keep, and their name on theperpetual plaque, which hangs in theStudent Success Center.James Huang of Fremont wasthe president of CPAC for 2007-08.Approximately 300 alumni,students, faculty and representativesfrom firms providing scholarshipsattended this year’s annual SpringBanquet for CPAC in May. AccountingArea Chair Doug Cerf introducedour two new accounting faculty,Rodney Mock and Andreas Simon.Numerous seniors were recognizedfor their academic accomplishmentsand contributions to theaccounting area and college at theJames Huang (center), president of CPAC,and members of CPAC are all smiles afterbeing named Club of the Year by theBusiness Student Council at the AnnualCollege Awards Banquet.banquet, and five seniors receivedscholarships for CPA review courses,while 31 juniors received $49,000 inscholarships ranging from $1,000 to$3,500 from 23 organizations.Hilda Zacarias (Accounting ’89)was recognized as the accountingarea’s honored alumna for herachievements and for her numerouscontributions to the people of SantaBarbara County. Lindsay Flandersof San Diego and Kyle Slattery ofSanta Barbara were recognized asCPAC and SAAC’s outstandingmembers, respectively.Ernst & Young named EddyQuijano the outstanding accountingeducator. Arline Savage received theDeloitte Faculty Fellowship andDoug Cerf received the KPMGFaculty Fellowship. Chevron andPricewaterhouseCoopers announcedtheir intentions to fund facultyfellowships.Day in the Park and the SpringBanquet were organized by chairAjna Vuk of Sunnyvale, and committeemembers Jenny Allison ofSan Diego, Katie Brown of Stockton,Lindsey Flanders and Mike April ofSanta Cruz.CFA CONTINUEDChallenge team composed of 17seniors, who received four units ofcredit toward their senior project infall 2007.”Ramezani deliberately used theword, “challenge,” to alert students tothe multi-faceted demands of theCFA Level 1 test. To successfullycompete against 175,000 other candidatesand professionals, the CFAchallenge senior project wouldrequire a year-long commitment to adisciplined and self-directed study ofaccounting, economics, ethics,finance and quantitative methods. Tosucceed, students would have tocommit at least 10 hours of independentstudy per week over the courseof the academic year.Under Ramezani’s guidance, thestudents formed teams that researchedand organized the materials coveredby Level 1 exam. Students thenplanned their entire senior yearcourse work to maximize the coverageof the materials in the CFA exam.Ramezani also held numerousstudy sessions, administered severalpractice tests, and invited outsidespeakers who discussed strategies toprepare for the CFA test and theprofessional benefits of obtainingthis designation. After joining thischallenge in September, Justin Dorn(Finance ’07) was so eager, he signedup for the earlier exam in December –and passed. Both Fernandez and Dornshared their preparation strategies andthe key to their success with the restof the class.This year’s Cal Poly CFA challengeteam will participate in the2009 Level 1 exam in June. Thisgroup of seniors is already studyinghard and eager to receive guidanceand encouragements.For further information regardingthe CFA challenge program,please contact Cyrus Ramezani atcramezan@calpoly.edu.32 ❚ ANNUAL REPORT 2007-08

ACADEMICSThe Orfalea College of Business StudentAmbassadors celebrate their 10th year in2008-09, and the success they will enjoyin the program comes in part due to thehard work and dedication of the manyStudent Ambassadors who have workedso diligently in the previous nine years.(See former Ambassadors, next page.)Established in 1999 as a publicrelations arm of the Orfalea College ofBusiness by Dean William Boynton, theAmbassadors are students who volunteertheir time to promote the college and theuniversity. Their mission is to act as aliaison between the Orfalea College ofBusiness, students and industry, and puta “face” on the college.Ambassadors were on hand whenPaul Orfalea gave his transformationalgift to name the college. They have givencountless tours to prospective studentsand their parents; greeted approximatelyStudent AmbassadorsCELEBRATING 10 YEARS OF SUCCESS1,700 industry representatives who visitedcampus to conduct recruiting interviews;acted as hosts at college alumni reunionsstatewide; staffed the Open House booth;greeted advisory council members forluncheon and dinner meetings; welcomedthousands of prospective students andtheir parents at Open House AcademicDay activities; and continued to be availablefor a variety of unusual and challengingtasks – always with a smile.“Thank you to our outstanding StudentAmbassadors, and the commitmentthey show to the college,” says Dean DaveChristy. “As I have worked with thesestudents for the past four years, I havebeen impressed with the leadership skillsthat they exhibit. We are seeing that thesestudents do go on to become leaders inindustry where personal persuasion,fairness and serving-while-leading are allso critical. This is truly learn by doing.”2008-09 Ambassadors, front row (fromleft): Pooja Patel, Hayward; HeatherRaymond, San Diego; Emily Burns, DalyCity; Paige Cameron, Alamo; and KamiTolar, Redlands. Second row (from left):Ramon Angel, San Luis Obispo; LaurenColes, Thousand Oaks; Cassie Depew,Vacaville; Stephanie Liu, Elk Grove; NicolleMacDonald, Auburn; and Ashley Bartlett,Shingle Springs. Third row (from left):Marshall Dear, Danville; Kelsey Monken,Solana Beach; Andrew Flachner, PalosVerdes. Fourth row (from left): ChristineHogan, Benicia; Will Ranish, Sebastopol;Brad Huge, Bakersfield; Josh Pickles,Redwood City; Steven Anderson, Upland;and Leslie McKinley, advisor. Top row(from left): Jen Smiley, Laguna Niguel;Jonathan Mahrt, Petaluma; MichaelParikh, Los Altos Hills; Robbie Johnson,San Luis Obispo; Cameron Pangrle,Cupertino; Kyle Brockman, Seattle, WA;and Dean Dave Christy.ORFALEA COLLEGE OF BUSINESS ❚ 33

ACADEMICSFormer Orfalea College of Business Student AmbassadorsSpecial thanks to those brave students who were our “charter” Ambassadors of 1999-2000 (listed below in italics).Ambassador Concentration Year/s Served Ambassador Concentration Year/s ServedWhitney Ahtye Managing Peo & Technology 2007-08Scott Allan Information Systems 2003-04, 04-05Andy Amundsen Information Systems 2003-04Adam Arreola Finance 2000-01Brett Atkinson Accounting 2002-03Jeff Baer Information Sys 1999-00, 00-01, 01-02Jamie Battson Accounting 2002-03Sarang Bhatt Internat’l Bus Management 2006-07Elizabeth (Branstetter)Notti Accounting/Finance 2000-01, 01-02Lisa (Brownen)Fetters Information Systems 1999-00Josh Burroughs Managing Peo & Tech 2006-07, 07-08Ellen (Callahan) Feichtmeir Accounting 1999-00Emily Callahan Marketing 2004-05, 05-06Erin Callahan Marketing 2000-01, 01-02Christopher Campbell Accounting 2000-01Valerie (Canfield) Neuschwander Marketing 2003-04, 04-05Chelsea Cavazos Marketing 2003-04, 04-05Nathan Chapel Industrial Technology 2000-01Charles Chin Marketing 1999-00Susan Chmelir Marketing 2006-07, 07-08EurJean Chung Marketing 2003-04Sarah Clark Accounting 2002-03Mara Correa Marketing 2006-07Hillary Creeggan Marketing 2005-06, 06-07, 07-08Kelly Creeggan Accounting 2004-05, 05-06Adam Davis Bus Admin 2005-06Marissa (Deffebach) Gauss Marketing/HR Mgmt 2005-06, 06-07Briana DeVeer Marketing 2002-03, 03-04Stephen Dinh Accounting 2007-08Caitlin Dooley Accounting/Finance 2007-08Chelsea Drennan Int’l Bus/IS 2003-04, 04-05, 05-06Terry Duong Finance 2003-04, 04-05Marisa (Eggering) Mansour Marketing 2002-03Sheila (Emmersen) Stinson Management 2001-02Tom Erginsoy Finance/Accounting 2003-04, 04-05Jim Erickson Ind Tech 2002-03, 03-04, 04-05, 05-06Lauren Etcheverry Finance/Accounting 2002-03Kristen Ewing Marketing 2004-05, 05-06Laura Faller Finance 2001-02, 02-03Marie Finley Finance 2000-01Hiro Fukasawa Information Systems 2000-01Noriko Fukasawa Internat’l Bus Management 2001-02Lauren Gauger Finance 2002-03Scott Gay Finance 2000-01Jessica Gibbons Marketing 2007-08Melissa Gillette Marketing 2005-06Sarah Gillette Accounting 2001-02Andrea Guerrero Accounting 2004-05Nick Hanson Accounting 2001-02Ashley Harmon Accounting 2007-08Rachel Hidahl Marketing 2004-05Heather (Higgins) Miller Marketing 1999-00Brad Hill Finance/Marketing 2004-05Van HongMa Information Systems 2002-03Jacob Howell Marketing 2005-06, 06-07James Huang Accounting 2006-07, 07-08Eddie Jimenez Marketing 2001-02Brad Johnson Marketing 2000-01Brett Johnson Finance 2001-02, 02-03Colleen Johnson Accounting 2006-07, 07-08Jill (Johnston) Krimmel Marketing 1999-00Zemmi Kam Information Systems 2001-02Stacy Kent Marketing 2007-08Mariam Khan Information Systems 2004-05, 05-06Rabbia Khan Information Systems 2000-01, 01-02Tim Kirchner HR Management 2000-01Zach Kirkman Finance 2006-07, 07-08Tracy Kittle Accounting 2001-02Daniel Knott Accounting 2004-05Kevin Kumar Accounting/Finance 2006-07, 07-08Emilie KuoYang Information Systems 2001-02, 02-03Rona Kupec Internat’l Bus Management 2002-03Steven Larsen Information Systems 2007-08Brad Lear Industrial Technology 2001-02, 02-03Sharon Lee Information Systems 1999-00, 00-01Carrie Leighton Marketing 1999-00Kirsten (Husak) Lewandowski Marketing 1999-00Todd Lewandowski Marketing 1999-00Jeff Lincoln Accounting 2001-02, 02-03Ryan Litke Finance 2000-01Lianne (Liu) Law Management 1999-00Mark Loewenstein Finance/Accounting 2003-04, 04-05Allison Lowen Marketing 2007-08Michael Lumsden Accounting/Finance 2006-07Caitlin (MacDiarmid) Anderson Marketing 1999-00Megan (McRae) Mahlman Marketing 2001-02Nancy Mai Information Systems 2001-02Abhay Maniar Marketing/Management 1999-00Stacy Mannarino Finance 2000-01Andrea (Manning) Esbeck Accounting 1999-00Morgen Marshall Management 2004-05Amy Marsland Marketing 2005-06, 06-07Daniel Meade Marketing 2002-03Stacy Meronoff Marketing 2003-04Kristen Michallik Human Resources Mgmt 2004-05Anita Miller Finance 2003-04Adam Milne Finance 2006-07Katrina Molloy Accounting 2006-07Troy Monken Finance 2005-06, 06-07Lindsie Moorehouse Finance 2003-04Darren Natoni Marketing 2004-05Kelly Neary Managing Peo & Tech 2005-06, 06-07Alina Nisenzon Marketing 2002-03, 03-04Ryan Park Information Systems 2000-01, 01-02Steve Patton Marketing 1999-00Ryan Pease Finance 2005-06, 06-07Will Peets Finance/Accounting 2005-06Garrett Perez Finance/Acctg 2002-03, 03-04, 04-05Dominic Phillips Accounting 2003-04Kimberly Powers Management 2002-03Corey Reihl Marketing 2000-01Tania (Remillard) Arnold Accounting 2000-01Jessica (Renninger) Gonzales Marketing 1999-00Sarah Riviere Marketing 2007-08Mary-Elisabeth (Ronan) Delp Information Systems 2001-02, 02-03Jeremiah Rosenthal Marketing 2006-07Taylee (Rounds) Donohue Accounting 1999-00Kara (Sanders) Long Business Administration 1999-00Eric Schnyder Finance 2002-03Samyak Shah Accounting 2007-08Katie Shield Marketing 2004-05Lee Shiffman Finance 2005-06Brian Skrip Accounting/Finance 2002-03Vanessa Slavich Marketing 2005-06, 06-07Alex Smith Finance 2004-05, 05-06Jennifer Snodgrass Internat’l Bus Management 1999-00Jacque (Soares) Gilliam Marketing 2002-03Kathryn Songco Information Systems 1999-00, 00-01Jeff Spicer Internat’l Bus Management 2007-08Heidi Spink Accounting 2004-05Jordan Stankowski Finance 2006-07, 07-08Michael Stuart Industrial Technology 2004-05Jenni Taylor Finance 2001-02, 02-03Alexandra Thomson Finance 1999-00Travis Thursby Industrial Technology 2006-07Lisa (Tilquist) Baier Accounting 2003-04Dru Torvend Marketing 2003-04Ben Wanetick Industrial Technology 2006-07, 07-08Jarret Weis Industrial Technology 2001-02, 02-03Brian Wong Information Systems 2004-05, 05-06Matt Woods Finance 2000-01Ronnie Yamanaka Accounting 2007-08Reid Zeller Information Systems 2001-02Kristen Zemitis Finance/Marketing 2004-05, 05-0634 ❚ ANNUAL REPORT 2007-08

ACADEMICSCollege celebrates achievement at Annual Awards BanquetThe Orfalea College of Businesscelebrated the end of academic year2007-08 with the annual awardsbanquet, an “Evening Under theStars,” in May.The evening celebrates studentswho are selected as outstanding intheir concentrations, faculty membersselected by students to behonored as outstanding, and studentswho have excelled scholasticallyduring their Cal Poly careers.Honored for scholastic achievementby graduating summa cumlaude with a GPA of 3.85 or abovewere Daniel Avneri (Finance),Jacob Booth (Accounting), LauraFeatherstone (Finance/Accounting),Laura Ilsley (Accounting), TheresaJewell Duncan (Finance), KristinLendvay (Marketing), AndreaMuntzel (Accounting), EwelinaOboza (Accounting), Skylar Olsen(Economics), Brenna Peters (InternationalBusiness), AnnetteRietkerk (Accounting), MichelleRodriguez (Finance/Accounting)and Diane Zaida (Economics).The student honored for highestacademic excellence in the OrfaleaCollege of Business for 2007-08, andpresented with the Delta Sigma PiScholarship Key, was AnnetteRietkerk (Accounting).Each year, the faculty in eachconcentration select one graduatingsenior as their outstanding student.This student is not necessarily thehighest academic achiever in theconcentration; the selections arealso based on professionalism,volunteerism, and collegiality. Theoutstanding graduating seniors ineach concentration for 2007-08 areAnnette Rietkerk in Accounting;Skylar Olsen in Economics; TheresaJewell Duncan in Finance; JustinMiller in Industrial Technology;Matthew Maclachlan in InformationSystems; Brenna Peters in Interna-Dean Dave Christy (top) congratulatesAnnette Rietkerk (Accounting) foracademic excellence. Larry Gorman(left) was named DistinguishedTeacher of the Year and Lee Burgunderreceived the Faculty Emeritus award.tional Business; Katharine Dawsonin Management; and Jaclyn Reganin Marketing.The Faculty Awards Committeealso selects five students for awardsbased on services to the community,college and university. The award forContributions to the Objectives andPublic Image of the Orfalea Collegeof Business went to marketing seniorSarah Riviere; for Contributions tothe Objectives and Public Image ofthe University, the award was givento marketing senior Jessica Gibbons.For Outstanding Service to the SanLuis Obispo community, managementsenior Joshua Burroughs wasrecognized. Stephen Dinh, Accountingsenior, received the DistinguishedService award as the studentwho has participated in communityservices that benefit the collegewhile maintaining a high level ofacademic excellence. The finalstudent award of the evening waspresented to the student who hasparticipated in activities that havecontributed positively to the imageand improvement of the OrfaleaCollege of Business while maintaininga high level of academic excellence.The honor went to JamesHuang (Accounting).Faculty honors followed, withthe Faculty Emeritus award going toAccounting and Law Professor LeeBurgunder. Distinguished Teacher ofthe Year honors went to FinanceProfessor Larry Gorman. Eachhonoree received a cash stipend anda plaque, and their pictures will beon display in the college’s awardsshowcase for one year.Orfalea College of Businessstudents vote online each year foroutstanding faculty in each concentration.Voted outstanding by thestudents for 2007-08 in their concentrationswere: Tad Miller, Accounting;Dan Villegas, Economics;Sanjiv Jaggia, Finance; Cliff Barber,Industrial Technology; Barry Floyd,Management; and Norm Borin,Marketing.Voted by the students as outstandinglecturers in their concentrationsfor 2007-08 were: ChrisPerello, Accounting; Solina Lindahl,Economics; David Distad, Finance;Richard Carter, Industrial Technology;Jere Ramsey, Management; andSharon Dobson, Marketing.The banquet was co-hosted bythe college, the Business StudentCouncil, and several companies whohelped to make this year’s event anextraordinary success. Our thanks to:Blakeslee & Blakeslee, Deloitte,Hewlett-Packard, Lockheed Martin,Nestlé and Northrop Grumman.ORFALEA COLLEGE OF BUSINESS ❚ 35

ACADEMICSBusiness Student Councilprovides leadershipVITA students are vital asset to the communityAn Olympic gold medalist, Apple’sCFO, and a national leader in personalbranding – all were individualsthat Orfalea College of Businessstudents had the opportunity to meetwith one-on-one in 2007-08, thanksto the Student Business Council.Led by Chair Andrew Flachner,the council hosted Jennifer Azzi,1996 U.S.Women’s Basketball teamOlympic gold medalist; Apple ChiefFinancial Officer Peter Oppenheimer(AgBusiness ’85); and The PersonalBranding Group’s Chief ExecutiveOfficer Tim O’Brien.Serving as an advisory body forall student clubs and organizationsin the college, the council works topromote unity and collaboration withthe college, foster communicationbetween college clubs, departmentsand Associated Students Incorporated(ASI), and coordinate collegewideprofessional and social eventsand activities.The council utilized campusvisits by its Professional DevelopmentSpeakers to collaborate withthe Athletics Department, the AmericanMarketing Association and theCal Poly Parents Program.The Business Council alsooversees the club showcase, OpenHouse and the Annual CollegeAwards Banquet.All clubs in the college arerepresented on the council, and eachyear the clubs are encouraged toparticipate in college activities, aswell as in the community.To stimulate participation, theBusiness Council selects a Club ofthe Year within the college. Clubsare judged based on philanthropy,professional development, attendance,community service, andcollege and industry participation.The 2007-08 Business Councilinstituted a new honor, the PhilanthropyAward, to heighten awarenessamong students of the need to“give back to the college and thecommunity.” At the Annual CollegeAwards Banquet in May, the PhilanthropyAward went to Alpha KappaPsi, with outgoing President NathanLeis (Finance/International Business)accepting it on the club’s behalf.Delta Sigma Pi was voted MostInvolved Club, with outgoing PresidentAshley Mikami (Accounting/Information Systems) accepting theaward. And the Cal Poly AccountingClub (CPAC) was voted Most Out-For seven weekends, Accountingstudents who participate in theVolunteer Income Tax Assistance(VITA) program sequester themselvesin the Orfalea College ofBusiness and learn by doing whilepreparing free income tax returns.In 2008, 71 students enrolledin the service learning course,which reviews the basic tax rulestaught in Bus 320 and coversvarious technical aspects of taxpreparation and compliance in areal-world environment. It alsocultivates personal and professionalskills via student/client interaction.For each of the past twoyears, Cal Poly’s VITA programhas assisted over 900 communitymembers in filing their federaland California tax returns. For the2007 filing season, the IRS rankedCal Poly’s first among universityVITA sites in Los Angeles,Ventura, Santa Barbara and SanLuis Obispo counties. This rankingincludes quality and quantityof returns. The 2008 season hasnot yet been tabulated.Over the past five years, ourprogram has served as a benchmarkfor many of the improvementsimplemented by the IRS tothe overall VITA program.In 2007, we reported in ouralumni magazine that the college’sVITA program was 16 years old.But we stand corrected! JimFitzsimmons (Accounting ’84)writes to us:“As president of the AccountingClub, I ran the VITA programin 1976 and 1977. Wally Burthelped when the students were,very rarely, stumped. CharlieAndrews and Dave Nutter werealso encouraging students toparticipate in the program. Alongwith Heidi Nothman, MelanieCroce and David Godfrey, toname a few, we went to far areasof the county to help mostly theelderly, but with anyone whoneeded help with tax returns.”Fitzsimmons added, “I enjoyedseeing Gene O’Connor’spicture (in the magazine), as hetried to shanghai me to Marketingduring my stay.”We are happy to report thatthis foundation of communityservice and learn by doing hasbeen growing in the college for30 years.standing Club of the Year for 2007-08, with outgoing President JamesHuang (Accounting) accepting theaward.Leading the Business StudentCouncil for 2008-09 will be CameronPangrle (Accounting/Finance) aschair; Michael Parikh (InformationSystems) as vice chair; Matt Rowe(Accounting) as director of finance;Ramon Angel (Accounting) asdirector of activities; Brenna Dyer(Finance/Information Systems) asdirector of publicity; and JamieCallahan (Marketing) as secretary.36 ❚ ANNUAL REPORT 2007-08

ACADEMICSOn Feb. 2, 2008, the 13th AnnualInternational Career Conference(ICC) hosted over 250 attendees atSan Luis Obispo’s Embassy Suites.The conference opened with akeynote address by Riyad Mansour,ambassador and permanent observerof Palestine for the United Nations.Mansour encouraged students andmembers of the campus and communityto develop their professional andpersonal knowledge in internationalaffairs. He advocated knowledgesharingas the key to forming sustainableand cooperative bondsacross nations and with corporationsand individuals.Included in the day were 10discussion panels, with topics rangingfrom international marketing,cultural adaptation and expatriation,and workplace diversity to internationalfinancial and investmentissues and corporate social responsibility.The panels included invitedThe 2007-08 ICC Planning Committee13th Annual International Career Conference draws a crowdOrfalea College of Business studentsFolashade Harrison (BusinessAdministration) of Hayward andNkechi Ikpo (Marketing) of Modestojoined seven other Cal Poly studentsat the National Society of BlackEngineers conference in Florida.industry professionals, nonprofitorganizers, and Cal Poly faculty andalumni with backgrounds in business,engineering, real estate, alternativeenergy vehicles and agriculture. Aftera series of prepared questions moderatedby Orfalea College of Businessprofessors, the attendees were invitedto direct questions to the panelists.At the subsequent career fair,students connected with recruitersand company representatives fromglobal corporations such as Aerotek,Edward Jones, John Hancock Financial,Northrop Grumman, REC Solar,Target, and Teradyne.Business students coordinatedthe ICC as their learn-by-doingsenior project. Appointed rolesinvolved speaker and employerrecruitment and marketing, financial,logistical and Web design functionsassociated with event planning.Under the guidance of facultyadvisor Barry Floyd, the summitBusiness students attend Black Engineers ConferenceWith an estimated worldwideattendance of 10,000, the conferenceprovides an opportunity to meet withindividuals who are considered keycontributors to science, business andengineering and are recognized byindustry for excellence in theirwas planned and executed by studentsNaté Basile, Managing People& Technology; Kelly-Anne Cheung,Marketing; Jonathan Clark, InternationalBusiness Management;Martha Doromal, Business Administration;Hilary Frimond, Marketing;Tiana Graham, Business Administration;Lauren Grana, Finance/InternationalBusiness; LauraGunderson, International BusinessManagement; Aquiles Landaverde,Marketing; Heba Mansour, Finance;Jeff Spicer, International BusinessManagement; Stephanie Sullivan,Marketing; Eric Walden, Accounting/InformationSystems; andMaureen Walsh, Marketing.The planning committee for the14th annual conference has beenselected, and the event is set forwinter quarter 2009. Interestedspeakers, recruiters and students canfind more information on next year’sevent at icc.calpoly.edu.respective fields. The two businessstudents were joined by Cal Polystudents from Electrical Engineering,Biology, Biomedical Engineering,Statistics, Aerospace Engineering,Computer Engineering and PublicPolicy/Architecture.ORFALEA COLLEGE OF BUSINESS ❚ 37

ACADEMICSMarketing student races toward automotive careerFour students in the Orfalea Collegeof Business were elected to the ASIBoard of Directors in Cal Poly’sspring elections.Elected for a one-year term wereLaura Gunderson (InternationalBusiness/Marketing) of Santa Rosa;When representatives from Cal Poly’schapter of the Society of AutomotiveEngineers (SAE) came to a meetingof the American Marketing Association(AMA) in thefall of 2007 andasked for someoneto work withthem on theFormula SAETeam for the2007-08 year,Caulen LauriaCaulen Lauria ofGrass Valley knew this was theproject he had been waiting for.Lauria quickly volunteered andbegan working with the group toprepare for the Formula SAE Westcompetition in Fontana and theFormula Student UK competition tobe held at Silverstone Circuit inNorthamptonshire, England.The Formula SAE team, comprisedof approximately 45 engineeringstudents from manufacturing,mechanical, civil, electrical, andaeronautical engineering, and onebusiness student – Lauria – workedfor the entire academic year to puttogether their car, marketing andsales presentations.Faculty advisor for the group isJohn Fabijanic, a lecturer in theCollege of Engineering’s MechanicalEngineering Department and aformer NASA Associate and Formula1 engineer. Fabijanic shared hisknowledge of the motorsports industrywith the team, but for Lauria’smarketing work, he relied on JeffHess, associate professor of marketingin the Orfalea College of Business.With the expertise of bothprofessors to guide the team, thegroup headed off to Fontana and thefirst competition in June.Due to some noise problems,the team was disappointed with theirshowing in Fontana, but Lauria waspleased that, according to the judges,his marketing presentation “was thebest we’ve seen all day” among the70-plus teams there. It was thehighest score Cal Poly has everreceived in the marketing presentationcategory.Excited, the team moved on toEngland to the Silverstone Circuit forthe Formula Student UK competition.Over 100 schools from across theglobe competed, and over 60 of themwere from German universities. CalPoly represented the ONLY teamfrom the United States.The marketing presentationranked 26th of all the schools, “arespectable score considering it wasour first international Formula SAEcompetition where the Germanuniversities usually dominate,” saysLauria. The engineers received 47thas their design score.The marketing plan presidedover our car as a hypothetical businessproposal to a major car manufacturerto put forth the upfrontinvestment in order to manufactureand sell the car. It was Lauria’sresponsibility to make realisticdemand projections for the car,prove that there is a profitable marketfor the car, and put together aFour business students elected to ASI Board of DirectorsNima Salke (Finance) of Calabasas;Jesse Schwartz (Business Administration)of New York, and AshleySinger (Marketing) of Napa.The Board of Directors acts asthe official voice of students, overseeingASI corporate operations.dependable advertising and publicitycampaign for “activation.”The target market was selectedbased upon Sports Car Club ofAmerica (SCCA) autocross membershipdata, which helped to refine themost reachable, profitable and valuabledemographic possible. Otherconsiderations for the marketingpresentation was the break-evenpoint for potential investors, profitmargins and business arrangement,and a comprehensive plan thatincluded a lean manufacturingsystem for the projected capability ofproducing four cars per week.During the weeklong trip, theteam enjoyed several exclusiveFormula 1 facility tours, includingthe Renault F1 Team given by thehead of their marketing department,and a tour of Mercedes High PerformanceEngines Technology Center.“Thank you, Cal Poly and theOrfalea College of Business, for givingme a true and valuable foundation forbuilding my future,” says Lauria. “Iam sincerely grateful for the opportunity,and I can’t wait to give back!”Lauria gives special thanks toProfessor Brian Tietje for his encouragementand helping to makethe UK trip possible.Lauria graduated in spring 2008and accepted an offer from StevenPR of Beverly Hills, where he worksas an account associate. After gainingcareer experience, he hopes topursue a Formula 1 career in Europeand return to a corporate marketingjob in the San Francisco Bay Area.“Leadership is a gift and a task,because to be effective you need avolunteer mindset and a willingnessto serve the needs of others,” saysDean Dave Christy. “Thank youall for your willingness to serveour students.”38 ❚ ANNUAL REPORT 2007-08

ACADEMICSRay Scherr Business PlanCompetition encouragesentrepreneurial endeavorsFounded in 2002 by Ray Scherr andthe Cal Poly Orfalea College ofBusiness, the Ray Scherr BusinessPlan Competition is considered thepremiere entrepreneurship event atCal Poly.Organized by Students in FreeEnterprise (SIFE), the competitionserves as the convergence point forentrepreneurs across the greater CalPoly-San Luis Obispo community.Individuals from every academicdiscipline, alumni, university staff,and the community of San LuisObispo are invited to participate fora chance to win $10,000 and valuableintroductions to Angel andventure capital investors. The winneralso has the opportunity to competein the $250,000 Draper FisherJurvetson (DFJ) Venture Challenge.The competition provides ayear-round forum in which participantscan develop and test theirbusiness vision and plans. It providesa network of resources formentorship, team creation, education,networking and financing foraspiring entrepreneurs. In addition,all participants receive feedbackfrom qualified judges on the businessplans they submit.SIFE continues to develop theevent, with the original goals of thecompetition in mind: to supportstudents and alumni in their entrepreneurialendeavors to create realbusinesses; to encourage commercializationof promising ideas emergingfrom Cal Poly’s research centers;and to build bridges between CalPoly and the San Luis Obispo entrepreneurialcommunity.Finalists go through initialinvestment rounds by partneringangel investors, and the winningteam has the opportunity to appearin front of the largest venture capitalFive Cal Poly MBA students competedin the intense 44th annual three-monthlong International Collegiate BusinessStrategy Competition in San Diegolast spring.Teams from as far as Dubai in theUnited Arab Emirates participated insimulated business decisions. In all, 24talented teams from 18 top universitiestook part.Cal Poly was represented by thecompany SandCastle Labs, Inc. lead byErik Slayter (CEO), Naomi Guy (VP ofmarketing), Jesse Bilsten (VP of operations),Amy Engdahl (VP of finance)and Martin Flores (intern). The teamwas advised by Orfalea College ofBusiness faculty member David Peach.Teams were responsible for strategicbusiness decisions, including inventorymanagement, pricing andadvertising, production and capitalexpenditure control, human resourcemanagement, finance, and research anddevelopment decisions. They wererequired to develop unique businessplans and annual reports showcasingtheir strategies and results.firm in the world, DFJ Investments.This year’s competition was held onApril 11.Judges for the competition wereRon Meritt of Ron MerittInternationals, Frank Foster fromDFJ Investments, Robert Doust fromFirst Bank of San Luis Obispo, andJim Murphy (MA Education ’85), aretired industrial technology facultyand member of the Service Corps ofRetired Executives (SCORE).The winners of the communityprize of $,3000 were ScottMcCready, Donald Lee and EugeneLee with VisibleRealty. The winnerof the $4,000 student competitonwas Tricia Compas with H20-2-Go.The SIM team(from left): JesseBilsten, NaomiGuy, MartinFlores, AmyEngdahl, ErikSlayter andfaculty advisorDavid PeachMBA students compete with international business strategiesCal Poly’s team learned crucialbusiness crisis management strategiesthrough experiential learning duringthe competition as their simulatedeconomy was afflicted with a marketcontraction despite a growing economy.The judges came from diversebackgrounds with experience as highpoweredexecutives. Students wereable to interact with them and learnfrom their real-world experiences.They also had the opportunity tonetwork with business students fromthe other universities.“This event provides a uniqueway to pull together various disciplinesinto an overall strategy. It’sgreat to have a learning experiencethat doesn’t involve sitting in theclassroom,” says Naomi Guy.This competition provides anexcellent multi-discipline learningopportunity through a complexbusiness simulation program developedby Richard Cotter and DavidFritzsche (http://www.eskimo.com/~fritzsch/).ORFALEA COLLEGE OF BUSINESS ❚ 39

ACADEMICSPackaging design is no competition for our studentsThe Association of IndependentCorrugated Converters (AICC)announced the winners of theNinth Annual Student PackagingDesign Competition. Over 15 entrieswere received from Cal Poly,Clemson University, Humber College,and Appalachian State University.Packaging Team takesfirst place in competionTeams from the Orfalea Collegeof Business’ Packaging Programplaced first and fourth in theInternational Corrugated PackagingFoundation’s (ICPF)Ninth Annual Careers in CorrugatedInternational TeleconferenceCompetition in February.Beamed live from MichiganState University, the competitionwas attended by 16 schools –Ball State, Cal Poly, ClemsonUniversity, Christian BrothersUniversity, Fox Valley TechnicalCollege, Iowa State, MichiganState, Millersville University(PA), North Carolina A&T University,Pennsylvania College ofTechnology, South Central College(MN), Thaddeus StevensCollege (PA), University ofFlorida, University of Wisconsin-Stout, Virginia Tech, and WesternMichigan University.Cal Poly’s packaging teamswere declared first and fourth inthe competition. The first-placeteam of Jesse Dundon, IndustrialTechnology, Angelica Li,Graphic Communications; andSteve Munio, Industrial Technologyreceived $1,500. Fourthplace and $500 went to EricKvilhaug, Industrial Technology.The packaging programreceived $5,000 for sponsoringthe two teams.Students of all class years wereencouraged to submit packagingdesigns with the following criteria:Category 1: Design to Fit aProblem – Design a structure thataccomplishes a given task whileaccounting for converting challenges.Category 2: Open Design – Designany structure including the die lineand graphics, and print the job.Category 3: Corrugated As Art –Design a one-of-a-kind, non-productionrun, corrugated structure.First-place winners for Category1 were Industrial Technology studentsZach Mena, Troy Nelson,Ethan Stansbury and Chelsey Woodwith “The Perfect Palletizer.”Second place in Category 1 wastaken with “Poly Dental Pallet Display,”by Industrial Technologystudents John McDonald, AlexisRamirez and Kevin Roberts, andGraphic Communications studentKristina Chung.Cal Poly took home first placefor Category 2 with “Poly Pitches,”created by Industrial Technologystudents Sean Ipakchi, Brady Haugand Mark Hesser, and AndreaRaggio of Graphic Communications.Third place in Category 2 wasclaimed by “Poly-Audio,” designedby Industrial Technology studentsFrederick Gonzales and Tim Oman,and Blake Borg and Nicole Dishmanof Graphic Communications.In Category 3, “Chess Board”won first prize for Industrial Technologystudents Walter Fong, J.D.Howard, Eric Meyer and MatthewOates. Second place went to “ImpossiblePuzzle,” created by KyleDesautels and Aric Krasowski, bothIndustrial Technology, and TravisHemenez, Graphic Communications.All winners received a plaqueand a monetary award. The firstplacewinners also received an allexpenses-paidtrip to the AICC 2008Annual Meeting in Atlanta, GA.Heather Raymond (left) and Sarah RiviereSimon leads sales studentsto success in national contestMarketing adjunct Lisa Simon sawtwo of her students emerge as winnersin the National Collegiate SalesCompetition at Kennesaw StateUniversity in the spring.Heather Raymond of San Diegoand Sarah Riviere of LeSeur, MNhad the unique opportunity to notonly participate in the nationwidecompetition, but also to catch theeye of multiple recruiters for jobsand internships.There are 104 competitors from53 schools at the competition. At thefinals, each has 20 minutes to “makethe sale” in a role-playing scenario.During the competition and accompanyingjob fair, recruiters from 48companies evaluate students’ drive,personality and technique.“Both Sarah and Heather did agreat job at the competition,” saysSimon. “Although both wished theycould have progressed further, theyare proud and pleased with theirperformances.”Additionally, Sarah – a senior –was subsequently courted by multiplerecruiters for a job.“This competition gave Sarahnational recognition and visibilitythat she would not have otherwisereceived,” says Simon.“Likewise, Heather – a sophomore– has been offered severalinternship possibilities. Opportunitiesoutside of the classroom that can beprovided to our students, such as theNational Collegiate Sales Competition,are invaluable.”40 ❚ ANNUAL REPORT 2007-08

ACADEMICSCollege celebrates the students welcomed into Beta Gamma Sigma honor societyThe Orfalea College of Business isproud to honor those students whoare inducted annually into BetaGamma Sigma (BGS), the honorsociety serving business programsaccredited by AACSB International.For over 90 years, BGS hasrewarded scholarship and achievementin the study of business administrationby inviting the top sevenpercent of juniors, 10 percent ofMBA students demonstratesolid business ethicsseniors and 20 percent of graduatestudents to join.Inducted into Beta GammaSigma in May 2008 were: SeanHood, senior; Brandon Jernigan,graduated; Jeanette Johnston,graduated; Kyle Kennedy, senior;Dustin King, senior; Ashleigh Lee,senior; Randall Lewis, senior;Shauna Lindahl, senior; MichaelLord, senior; Jennifer Marvin,senior; Brandon Merlo, senior;Chelsea Morris, senior; StevenOcheltree, graduated; CameronPangrle, senior; Kelley Paulick,senior; Joshua Pile, senior; AllisenRussi, senior; Robert Scheffler,senior; Eric Schmidt, senior;Julianne Strom, junior; AmandaSwan, senior; Kamran Tahvilian,senior; Michael Tooliatos, senior;and Inna Treyger, senior.A team of five Cal Poly OrfaleaCollege of Business graduate studentswon the Kerrigan Award asrunners up in the Loyola MarymountUniversity’s National Business EthicsCompetition.The team of Gary Chou (MBA),Matt Fencl (MBA), Marty Flores(MBA) Jeff Mohr (MBA) and NickMiura (MS AERO/MBA) competedagainst 31 other teams (graduate andundergraduate), including teamsfrom Loyola Marymount, UCLA,Dartmouth University, DuquesneUniversity, New York University,University of Arizona, Villanova andthe U.S. Naval Academy.Business leaders from aroundthe nation judged the overall persuasivenessof the presentation, the legal,financial and ethical dimensions, aswell as the students’ presentationskills. Five of the 31 teams advancedto the final round, which includedCal Poly, McGill University, MontgomeryCollege, St. Joseph’s Universityand University of San Francisco.The students presented a compellingcase about transparency inthe retail market for organic foods,addressing in their presentation to apanel of judges the legal, financialand ethical dimensions of this businesspractice, then proposing asolution to the problem.The purpose of the competitionis to help students see that it ispossible to be both ethical andprofitable in business.“As MBA students at Cal Poly,we are frequently asked to look atbusiness cases in terms of ethics inaddition to profitability,” said MartyFlores. “This competition gave us theopportunity to explore in-depth acurrent and controversial topic thataffects millions of Americans.”Cal Poly’s team is proud to haveplaced so well in such a large field ofrespected competitors from aroundthe nation and world.“It’s actually a humbling experienceto witness and learn from somany outstanding research projectsdone by other teams,” said Gary Chou.Sean Martin, an alumnus of theOrfalea College of Business MBAprogram and a member of a previouswinning team of the competition,coached this year’s Cal Poly team.Jeff Mohr described Sean as “anadviser, mentor, and most of all, afriend. He provided us with greatMBA Ethics Team members (from left):Matthew Fencl – B.S., Psychology,University of Kansas; MBA, Cal Poly,June 2008. Martin Flores – B.S.,Agricultural Business, Cal Poly; currentMBA student, Cal Poly. Nicholas Miura –M.S. Aerospace Engineering, UCLA;current MBA/M.S.-Aerospace Engineeringstudent at Cal Poly. Sean Martin –MBA, Cal Poly 2005, now pursuing hisdoctorate at Cornell University. JeffreyMohr – B.S., Biochemistry, Cal Poly;MBA, Cal Poly, June 2008. Gary Chou –B.S., Molecular Genetics, Ohio StateUniversity; MBA, Cal Poly, June 2008.insight and pushed us to do our best.He was a big part of our success.”Overwhelmingly, the Cal Polyteam enjoyed presenting a dilemmathey were passionate about, benchmarkingthemselves against otherprograms, and networking with ethicallylikeminded graduate students.For more information on thecompetition, please visit http://www.ethicsandbusiness.org.ORFALEA COLLEGE OF BUSINESS ❚ 41

COVER STORYLEADERSHIPIN ACTIONB. QUENTIN LILLY ■ HONORED ALUMNUS FOR 2008-09The 2008-09 Honored Alumnus for the Orfalea College of Businessis B. Quentin Lilly, president of Technicolor Home EntertainmentServices based in Camarillo. Lilly follows in the footsteps of a longline of industry and Orfalea College of Business leaders in acceptingthis honor (see sidebar, page 44).When considering our selection for the honor, we sought anindividual who we consider to be a “leader” to our faculty, ourstudents, our alumni, and the communities in which our alumni liveand work. With the emphasis that companies are necessarily nowplacing on integrity, honesty and professionalism, and with therenewed sense of responsibility that each individual must take forB. Quentin Lilly with Alma Raya at Technicolor Home Entertainment Services in Camarillo (above)42 ❚ ANNUAL REPORT 2007-08

his/her own decisions, we are encouragedto look not only at the professionalcareer of our honored alumnus,but also at the individual as a contributingmember of our society.Raised in Paso Robles, Lillyreceived his Bachelor of ScienceDegree in Business Administration atCal Poly in 1983. In January 1984, hebecame an account executive in thesales and trading department ofSmith Barney, Harris Upham & Co.,Inc., in Los Angeles.Lilly excelled in sales and trading,but had a strong interest topursue a role in corporate finance,and such an opportunity presenteditself in 1986 when the firm offeredhim a job in its investment bankingdepartment. As an associate there,Lilly was responsible for new businessdevelopment and a broad rangeof financial, legal, negotiation andother transactional requirementsassociated with private and publicdebt and equity offerings, mergersand acquisitions, and other financialadvisory engagements.In 1991, Lilly left Smith Barneyto join Crowell, Weedon & Co. in LosAngeles as a vice president in thecompany’s investment bankingdepartment, a position that providedan increased focus on middle-marketmerger, acquisition and principalinvestment transactions. Whilethere, Lilly was responsible for newbusiness development and successfullycompleted a broad array ofpublic and private financings, includingthe leveraged acquisition of anational title insurance companydivested by a Fortune 500 company;sale of a privately-held microcomputerproducts distributor with $100million in revenues to a competingpublicly-held corporation; sale of aprivately-held health care servicescompany to a publicly-held competitor,to name a few transactions.As his responsibilities expandedand transactional experience increasedacross a variety of industries, so toodid Lilly’s opportunities to join thesenior management teams of companiesoutside of the finance sector. In1994, Technicolor Home EntertainmentServices offered him a positionas senior vice president of planningand development. All this, and just10 years out of Cal Poly.Initially responsible for allworldwide strategic planning andcorporate development activities,Lilly moved through the ranks atTechnicolor from senior vice presidentto chief operating officer in1997, to president in 2000.Now ultimately responsible forall worldwide management/operationsof Technicolor’s largest businessunit – with 13 manufacturingand 11 distribution facilities in eightcountries and total worldwide revenueof approximately $1.5 billion –Lilly has overseen strategic/operational initiatives that haveincluded the acquisition and subsequentintegration in the U.S. andEurope of Panasonic Disc Services,valued at approximately $260 millionwith annual revenue of $220 million;development and completion of theindustry’s largest worldwide DVDreplication facilities in Guadalajara,One of the blankdisks burned inthe CamarillofacilityMexico, and eastern Europe inWarsaw, Poland; and numerousmajor Hollywood studio contractnegotiations/renegotiations leadingto exclusive multi-year manufacturingand distribution supply agreements,among other transactions.Certainly the work of a leader inindustry. But what does Lilly do tomake his mark outside of his profession,to provide a role model andexample to young people?He first gives unselfishly of histime and talents to his alma mater.Lilly serves on the the Orfalea Collegeof Business Dean’s AdvisoryCouncil and is available to speak tostudents in the classroom and clubs,as well as providing tours of theTechnicolor facility in Camarillo. Hehas established a scholarship forincoming freshmen at the college inthe name of his parents, Kim andGarlyn Lilly. This endowed scholarshipwill allow students access to aquality education in perpetuity.He and his wife, Maryam,support the Cal Poly chapter of theWheelchair Foundation on an annualbasis, and Maryam, since 1991, hasserved as an active member of theJunior League of Los Angeles, whereshe commits volunteer time to anumber of community organizations.With his senior managementteam at Technicolor, Lilly also volunteerstime and financial support tothe Camarillo Family YMCA, BigBrothers/Big Sisters of VenturaCounty and the Make-A-Wish Foundation.He does so without fanfare,usually rejecting any public recognition.He does these thingsbecause he believes them to beright and his repayment for alife that has been bountiful.A sign of a true leader –onewho leads or guides, whoshows by example.It didn’t take us longto find our 2008-09 HonoredAlumnus. B. Quentin Lilly is a leaderof whom our college is proud. ■ORFALEA COLLEGE OF BUSINESS ❚ 43

COVER STORY1971Mitchell H. States(Business Administration ’67)Management developmentperformance consultant, PG&E;lecturer, Orfalea College of Business1971Marlene D. Van Wagner(Home Economics/Textiles &Clothing Merchandising ’71)1972Jack C. Anderson(Industrial Arts ’75)1972Frederick T. Honoré(Business ’63)Owner/partner, H & H Properties1973Bobby J. Gaston(Business ’67)1974Warren Church(Social Sciences/Education ’62)Educator, Pajaro Elementary SchoolDistrict; elected official, MontereyCounty Board of Supervisors1975R. James Considine, Jr.(Business/Accounting ’68)President/CEO, Ryder Stilwell Inc.1976Lamar Smith(deceased)1977Norman R. Buller(Business/Accounting ’67)Retired partner, Andersen Worldwide1978Clifton C. Maclin Jr.(Business ’73)President/owner,Maclin International Inc.1979H. D. Miller(Business ’62)Director of personnel,Atkinson Construction Co.1980Richard Andrews(Social Sciences ’56)Retired vice president,PaineWebber, Inc.1981Rush N. Hill, II(Business/Architecture ’69)Chairman of the board,Hill PartnershipOrfalea College of Business Honored Alumni1982Roger C. Rohrs(Business ’69)Owner/publisher, Orion Research Corp.1983Owen Servatius (deceased)(Social Sciences/ Education ’59)Dean, Orfalea College of Business1984William C. Siefkin(Business/Marketing ’68)Sales consultant,Robson Communities Inc.1986Timothy Boyle(Industrial Technology ’68)Kingdom Building Systems1987Lee A. Doble, Jr.(Business/Finance ’68)Director, Frank Crystal & Co.1988Thomas M. Racciatti(Business ’71)President, WW Johnson Meat Co.1989Marc L. Loupé(Business/Accounting ’76)Senior vice president of finance,XOJet, Inc.1990Jay R. Mitchell(Business ’64)Retired CEO/co-founder, Univco Plastics1991Philip J. Oberti(Business ’66)President, Oberti Manufacturing1992John W. Schmidt(Business ’67)Executive director,California Wildlife Conservation Board1993Mike Mantle(Business ’79)CEO, One Economy Corp.1994Corliss J. (CJ) Nelson(Business/Accounting ’67)Senior vice president, Koch Industries1995Tom G. Stanford(Business ’67)President, Newport Poster Network,Newport Communications1996Steve Kitson(Business/Accounting ’74)Partner, PricewaterhouseCoopers1997Lori Holland(Economics ’81)Financial consultant (self-employed)1998Peter Oser(Business ’79)Partner/president, Anixter & Oser1999Don Fischbach(Business ’69)Attorney, Dowling, Aaron & Keeler, Inc2000H. Lee Dempsey(Industrial Technology ’73)Retired owner/CEO, Valley Electric;Author, “Gonzo With the Wind”2001Michael W. Deisenroth(Business ’76)Senior business analyst, AT&T2002Michael J. Byrd(Business/Accounting )’82Retired CFO, Brocade2003David Kinney(Business/Accounting ’85)Owner/co-founder,Madison Street Partners2004Thomas deRegt(Business ’80)Partner, New Cities Development Group2005Stephen J. Giusto(Business/Accounting ’85)Executive vice president/CFO,Korn/Ferry International2006William L. Chillingworth(Business Administration ’78)President/CEO, Circle C Enterprises2007Lori deMatteis(Business Administration ’85)Assistant vice president,Satyam Computer Services2008B. Quentin Lilly(Business Administration ’83)President, TechnicolorHome Entertainment Services44 ❚ ANNUAL REPORT 2007-08

Community

COMMUNITYOrfalea College of Business thanks recruiters nationwideThe Orfalea College of Businesscontinues to enjoy the support ofcompanies nationwide who come tocampus to recruit our students.Thanks to these companies whoworked with Career Services to offerour students internships and to hirethem for permanent positions:ACCENTUREACCREDITED HOME LENDERSADVANTELAMAZONAMGEN, INC.ANRITSUAPPLE COMPUTERAPPLIED SIGNAL TECHNOLOGYARAMARK CORPORATIONARLENGROUP (THE)ARMANINO McKENNA LLPARMY HEALTHCARE PROFESSIONSAT&T SERVICES, INC.AUTODESK, INC.AVIDBAE SYSTEMSBARBICH, LONGCRIER, HOOPER & KINGBDO SEIDMAN, LLPBFI BUSINESS FINANCEBOSTON SCIENTIFICBROCADE COMMUNICATIONS SYSTEMSBROWN ARMSTRONG CERTIFIED PUBLICACCOUNTANTSBUNGE GLOBAL AGRIBUSINESS (BGA)C & D ZODIACCALIFORNIA AIR RESOURCES BOARDCALIFORNIA DEPARTMENT OF CORRECTIONSCALIFORNIA PUBLIC UTILITIES COMMISSIONCALIFORNIA STATE CONTROLLER’S OFFICECAPITAL GROUP COMPANIES, INC. (THE)CARPENTER COMPANYCBIZ ACCOUNTING, TAX & ADVISORY SERVICES, LLCCBS INTERACTIVECH ROBINSONCHEVRON - ACCOUNTINGCHEVRON CORPORATIONCISCO SYSTEMS, INC.CITIBANKCITRIXCLOROX COMPANYCNET NETWORKSCOMERICA BANK - CALIFORNIACONSOLIDATED ELECTRIC DISTRIBUTORSCONSOLIDATED GRAPHICSCOUNTY OF SACRAMENTOCRITCHFIELD MECHANICAL, INC. (CMI)DAIRY FARMERS OF AMERICADAMITZ, BROOKS, NIGHTINGALE, TURNER &MORRISSETDAORO ZYDEL & HOLLANDDEL MONTE FRESH PRODUCEDELOITTE & TOUCHEDELOITTE CONSULTINGDOLEE & J GALLOEDWARDS LIFESCIENCESEICHSTAEDT & DEVEREAUX, LLPELECTROMATIC ONLINEELECTRONICS FOR IMAGINGENTERPRISEERNST & YOUNG LLPETMFACTSET RESEARCH SYSTEMS, INC.FARMER JOHNFARMERS INSURANCEFASTENAL COMPANYFEDERATED INSURANCEFMC FOODTECHFOSTER FARMSFOUNDRY NETOWKRSFRANK, RIMERMAN & CO., LLPFRITO-LAY OPERATIONSGENERAL DYNAMICSGENERAL ELECTRICGLENN, BURDETTE, PHILLIPS & BRYSON, CPA’SGRANICUS INC.GRANT THORNTONGREEN HILLS SOFTWAREGUARDIAN INDUSTRIESHALLIBURTON ENERGY SERVICESHAYASHI & WAYLANDHEFFERNAN INSURANCEHEWLETT PACKARDHITACHI CONSULTINGHOLTHOUSE CARLIN & VAN TRIGT, LLPHUFF CONSTRUCTIONHUGHESIBMINDUSTRIAL ELECTRIC MANUFACTURINGINDUSTRIAL TOOLS, INC.INTEVAC CORPORATIONINTUITJM SMUCKER COMPANY (THE)JOHNSON & JOHNSONKERN COUNTYKERN COUNTY WATER AGENCYKLA TENCORKPMG, LLPLAM RESEARCHLAWRENCE LIVERMORE NATIONAL LABORATORYLAYNE CHRISTENSEN COMPANYLOCKHEED MARTINLTX CORPORATIONMAFI-TRENCH CORPORATIONMASS MUTUALMATSON & ISOMMAXIM HEALTHCARE SERVICESMAXIM INTEGRATED PRODUCTSMEDTRONICMEISSNER FILTRATION PRODUCTS, INC.MENDOCINO FOREST PRODUCTSMERCKMERVYN’SMILLER, KAPLAN, ARASE & CO., LLPMOSS ADAMS, LLPMOSS, LEVY & HARTZHEIM, LLPNATIONAL SEMICONDUCTORNAVIS, LLCNESTLE ` USANEW UNITED MOTORSNORTELNORTHROPNOVELLUS SYSTEMS, INC.NOVOGRADAC & COMPANY, LLPNUANCE COMMUNICATIONSPACIFIC GAS & ELECTRIC COMPANY (PG&E)PALMPARKER HANNIFINPARSONSPEACE CORPSPEPSI BOTTLING GROUPPERRY-SMITH, LLPPIPER JAFFRAY & COPRESTON PIPELINES, INC.PRICEWATERHOUSECOOPERS, LLPPROGRESSIVE INSURANCEPROLACTA BIOSCIENCEPROMARK FINANCIALPROTIVITIQUAD KNOPF, INC.QUIA CORPORATIONRADIXRAYTHEON COMPANYREAL SOFTWARE SYSTEMSRELIANCE STANDARDRINA ACCOUNTANCY CORPORATIONRR DONNELLEYSAFEWAY, INC.SALESFORCE.COMSANDISK CORPORATIONSANTA BARBARA COUNTYSEILER & COMPANYSHERWIN-WILLIAMS COMPANYSIEMENS POWER GENERATIONSIERRA PACIFIC RESOURCESSILICON VALLEY BANKSIMPLOTSMITH, LANGE & PHILLIPS, LLPSOLAR TURBINESSOUTHERN WINE AND SPIRITSSPECTRA SENSORSSRI INTERNATIONALSSC SAN DIEGOST. JUDE MEDICAL CRMDSTRYKERSUGARCRM, IMCSUN LIFE FINANCIALSUNRISE TELECOMSYMANTECSYNNEXSYS.AC, INC.TARGETTEACH FOR AMERICATERADYNETHOUGHTSTREAM CONSULTING, INC.TOYOTATRAVELERSTRIAGE CONSULTING GROUPTYCOUNITED RENTALSUNUMU.S. AIR FORCE PALACE ACQUIRE PROGRAMU.S. DEPARTMENT OF DEFENSEUSS POSCOVI TECHNOLOGYVICTAULIC COMPANYVM WAREWALGREENSWARNER BROS.WEALTH AND TAX ADVISORY SERVICES (WTAS)WEB ASSOCIATESWELLS FARGO BANKWELLS FARGO FINANCIALWELLS FARGO INTERNET SERVICES GROUPWEYERHAEUSERWOLSELEY NORTH AMERICA DIVISIONWTASXILINX, INC.ZURICH NORTH AMERICAN INSURANCE46 ❚ ANNUAL REPORT 2007-08

COMMUNITYThe Cal PolyWheelchair Foundationraises over $90,000The 2007-2008 Cal Poly WheelchairFoundation raised over $90,000this year to send wheelchairs andaid to Africa and Peru. The teamtook a distribution trip to Peru overthe summer.In conjunction with four SanLuis Obispo County Rotary clubs, andwith support from Cal Poly’s Greekcommunity, local businesses, familiesand friends, the Cal Poly teamwill distribute more than 100 wheelchairsin Malawi, Africa in spring2009, and build a water well andcreate an educational endowment ofmore than $50,000 for orphanedchildren in the country.The Cal Poly team is the firstcollegiate chapter of the WheelchairFoundation, a nonprofit organizationleading an international effort todeliver a wheelchair to every man,woman, and child on the planet whoneeds one but cannot afford one. It isA happy Peruvian wheelchair recipient withJoshua Burroughs, 2007-08 project managerfor the Cal Poly Wheelchair Foundationestimated that over 100 million of theworld’s citizens are without mobility.The Cal Poly Chapter wasfounded in 2001 by Marketing AreaChair Lynn Metcalf to provide studentsin the business program anopportunity to use their skills towarda cause rather than a product orservice. After hearing WheelchairFoundation founder Ken Behringspeak at Cal Poly about his journeyof discovering the need for mobilityworldwide, Metcalf felt compelled tobring a project to the college thatenabled students to work for a nonprofitorganization and learn thebusiness of giving back.“It’s impossible to see the needand not be motivated to help,” statesMetcalf. “The gift of a wheelchairprovides access to opportunity andhelps relieve a family’s burden.”In April, the Cal Poly WheelchairFoundation team hosted its 7thannual Gala Event, which raisedmore than $50,000.The Rotary clubs’ sponsorshipof the Foundation’s numerous eventsplayed an important part in thisyear’s fundraising success, as didthe support of Cal Poly’s Greeks,who raised over $10,000 to helpsend wheelchairs to Malawi.For information, e-mail 2008-09Cal Poly Wheelchair FoundationProject Manager Helya Naghibi athnaghibi@calpoly.edu.Graduates of the 1990s: Paving the way for student success with class scholarship initiativeThe Orfalea College of Business isproud to introduce the first commemorativeclass scholarship initiativein the history of the college.The classes of the 1990s arepaving the way for the success offuture Orfalea College students byestablishing 10 new scholarships,one in honor of each class of the ’90s.“These scholarships will be usedto recruit and support exceptionalfreshmen in their academic pursuitsat the Orfalea College of Business,”explains Beth Brenner, assistantdirector of advancement. “By offeringscholarship opportunities, thecollege is able to attract outstandingstudents who might choose to attendanother university without thisfinancial support. In addition, thesehigh-caliber students raise the bar ofperformance among their peers,thereby enriching the educationalexperience within the Orfalea Collegeof Business.”The goal of the college is toestablish a $100,000 endowed scholarshipin honor of each class of the1990s through individual gifts andmatching funds. This group of 1990sgraduates is working collectively toraise $50,000 per class scholarship,with the college matching individualgifts dollar for dollar up to $50,000per scholarship. Ultimately, awardsfrom each new scholarship willsupport outstanding students duringtheir four-year career at Cal Poly.The initiative is already underway,and leaders from the classes of1993, 1995, 1997 and 1998 havepledged their support.If you are an alumnus oralumna of the Orfalea College ofBusiness from the 1990s, or simplybelieve in supporting students,please join this effort to invest in thestudents of today in order to growthe leaders of tomorrow. To make asecure donation online to any of the1990s class scholarships, visitwww.giving.calpoly.edu, click on“Make a Donation Now,” and selectthe scholarship from the OrfaleaCollege of Business drop-down menu.To become a leader in thecollege and within your class, and tohelp pave the way for student success,contact Beth Brenner at 805.756.2874or bbrenner@calpoly.edu.ORFALEA COLLEGE OF BUSINESS ❚ 47

COMMUNITYLeadership and the Dean’s Advisory CouncilBY RUSH HILL, ARCHITECTDEAN’S ADVISORY COUNCIL CHAIRGreetings to ouralumni, alumniparents, friendsand all others thathave an interest inthe ever-growingsuccess of Cal Polygraduates. It’sRush Hill Homecoming time,and the emphasisfor our year at the Orfalea College ofBusiness is on leadership!Leadership – we preach it, weteach it and we practice it. So, youmight ask:■ How do we define leadership?■ Why is the concept of leadershipimportant to the studentsof Cal Poly’s Orfalea Collegeof Business?■ What role can the Dean’sAdvisory Council take to furtherthe benefit to our graduateswho are transitioning to theworld of work with outstandingleadership qualities?If quizzed, I am sure we wouldall come up with a different definitionof leadership. Many would includewords or phrases like motivating,coaching, building spirit, and beinga team member. Some might identifyleaders as individuals who stepin to serve without being asked. Or,individuals who are not waiting butoffering – someone who movesforward while motivating othersto follow.I personally believe that a trueleader has the ability to build consensus,remain focused and alwayshas a vision. Most importantly, aleader has the ability to communicatewith conviction and confidence.Fulfilling our slogan, “Thebrightest minds make the bestcompany,” gives us the responsibilityto not just graduate learnedindividuals, but equally importantly,to provide society with tomorrow’sleaders. It is important that ourgraduates compete in the job marketnot only with knowledge but alsowith leadership skills.What we all can agree upon isthat leadership development is notan event or a single academic class.It is a process of developing listeningand coaching skills over time, inaddition to gaining a knowledgebase augmented with experienceand confidence. In Cal Poly terms,it’s a combination of going to classto learn a subject well and participatingin organizing workshops andpanels in our areas of concentration,serving on campus committees andboards, and other similar activities –all with the benefit of exposingyourself to a real-world environment –important by-products of the learnby-doingprocess.One of the best examples inthe Orfalea College of Business of“Leaders-in-Training” is our StudentFulfilling our slogan, “Thebrightest minds make the bestcompany,” gives us theresponsibility to not justgraduate learned individuals,but equally importantly, toprovide society with tomorrow’sleaders. It is important that ourgraduates compete in the jobmarket not only with knowledgebut also with leadership skills.Ambassador program. By representingthe Orfalea College of Business whileat Poly, our Student Ambassadorsmeet top-level executives fromacross the nation, welcome back tothe campus successful alumni, serveas the liaison between Dean DaveChristy and the general businessstudent population, and work oncommunity service projects, all whiledeveloping leadership skills. It isthis kind of Cal Poly program thatprovides our graduates with theupper hand in competing in the jobmarket after graduating.An important task this year ofthe Dean’s Advisory Council is toprovide the leadership role to aneven broader geographic and industrybase to continue to expand theawareness of the capabilities of ourgraduates. Over the past two years,we have led in the effort to redefineour branding and focus our messageto two of our many audiences:students and parents. Now we aretaking a leadership role in developinga focused message to businessand industry that can benefit fromthe leadership and knowledge skillsof our graduates.While Cal Poly’s Orfalea Collegeof Business is the major employeesource for several of California’sleading companies, there are stillcorporations and entrepreneurialenterprises that are not aware of thestrengths of our graduates. OurDean’s Advisory Council will provideleadership this year to expand evenfurther employment opportunities forour graduates while simultaneouslydeveloping even stronger ties to theindustries our students desire to join.By bringing our combined leadershipskills to the table in support ofCal Poly’s Orfalea College of Business,we are provided the opportunityto practice what we preach. Together,we do make a difference.48 ❚ ANNUAL REPORT 2007-08

COMMUNITYDean’s Advisory CouncilRush N. Hill, II - chairBusiness Administration ’69, CAED ’69Chairman - Hill Partnership Inc., ArchitectsKara W. BlakesleeMarketing ’87General securities principal -Blakeslee & BlakesleeWilliam L. ChillingworthBusiness Administration ’78President /CEO - Circle C EnterprisesLori deMatteisBusiness Administration ’85Assistant vice president -Satyam Computer Services, Ltd.Thomas S. deRegtBusiness Administration ’80Partner - New CitiesDevelopment GroupWalter G. DuflockAccounting ’89consultantRobert W. EhlersMarketing ’85President - Hautespot NetworksDonald R. FischbachBusiness Administration ’69Attorney - Dowling, Aaron & Keeler, Inc.Rik FloydEconomics ’79Associate VP of investment properties -Colliers InternationalStephen J. GiustoAccounting ’85Executive VP/CEO - Korn/FerryInternational, Inc.Fred T. HonoréBusiness Administration ’63Owner/partner - H&H PropertiesDavid V. KinneyAccounting ’85Partner - Madison Street PartnersSteve KitsonAccounting ’74Partner - PricewaterhouseCoopersStephen LeiderBusiness Administration ’77Principal - Lee & AssociatesJulia AguilarAndrew AllenNorman AngellFlip BaldwinWallace BarrNorman BekoDan BellackEdward BlecksmithJohn BradleyGlenn BraswellOran BrighamStephen BrownJeff BuckinghamFred BuelowNorman BullerDennis CaganJack ChestnutLucia ClevelandDavid ClousR. James Considine, Jr.Robert CordesPamela CosartMike CostaRoger CostaDavid CrowtherEmeritus Dean’s Advisory Council membersRichard CroxallRussell CunninghamLee DobleTod duBoisRoger DunbarJames DutcherRick FezellRichard GardnerDavid GarthJason GoelzJohn GoldrickRonald GrzywinskiHank HarbersStephanie HarknessMary HarrisLori HollandRobert HolleyRaymond JallowRuss JohnstonMary JordanRoy KirkorianChuck KolstadRonya KozmetskyJames LaceyJeff LandB. Quentin LillyBusiness Administration ’83President, Home Entertainment Services -Technicolor, Inc.Darran S. LittlefieldBusiness Administration ’85Partner - Point B SolutionsMarc LoupéAccounting ’76Senior VP finance, XOJet, Inc.Mike MantleBusiness Administration ’79Executive VP/chief operating officer -One Economy CorporationRichard NightingaleAccounting ’71Partner - Damitz Brooks NightingaleTurner & Morrisset, CPAs & consultantsPeter M. OserBusiness Administration ’79President - Anixter & OserDiane Starr LangleyLee LangleyKing LeeRichard LeonJames LindseyDonna LittleJanice MacKaninMahonDonald MarrRobert MallonBill MayJames MartinDeborah MeadowsMichael McMillanJudy MillerJames MercerMark MurphyJay MitchellMark NexsenCorky NelsonPhilip ObertiSidney ObermanMatt PeaseJack PenrodJeffrey OsorioTerri ReayJ. Russell RoyMichael RaderSy SchwartzDoug SchneiderJohn SelvaggioDaniel SegurLamar SmithPhillip ShinodaLee SnellerToni SommerWilliam SnellingThomas StanfordTom SpenglerDennis StoverRobert StilwellJohn StuartAndrew StrychazLloyd TaylorDavid SullivanSteven TurnerRobert ThielscherOgden WhiteDavid WardGregory A. RodriguesBusiness Administration ’84Owner - Western Land Financial, LLCHoracio SaavedraSr. business manager, program planning -Northrop Grumman Space TechnologyMartin J. SkripFederal tax partner - KPMG, LLPBruce A. SmithMarketing ’79Western division VP - Vision Service PlanJoanne M. SmithBusiness Administration ’82Senior VP, in-flight service & globalproduct development - Delta AirLines, Inc.Linda M. WalkerHuman Resources Management ’77VP human resources - Parker Aerospace,Parker Hannifin Corporation (retired)Kristen J. YetterBusiness Administration ’81President - Promega Biosciences, Inc.Dean’s San Luis Obispo Community Advisory CouncilThe Orfalea College of Businessvalues the assistance and support ofbusiness, community and civicleaders through their involvementwith the Dean’s Community AdvisoryCouncil. We wish to extend ourgratitude to these individuals fortheir commitment of time, assistance,and dedication to the OrfaleaCollege of Business and our students.William BorgsmillerPresident - Aviation Consultants, Inc.Diane BrocatoSenior VP - Blakeslee & BlakesleeLee FerreroPresident/CEO - Private Industry Councilof San Luis ObispoDave GarthPresident/CEO - SLO Chamber of CommerceMike ManchakPresident/CEO - Economic Vitality Corp. ofSan Luis Obispo CountyClint R. Pearce (Farm & Ranch Mgmt ‘91)Real estate manager - Madonna EnterprisesJeanne A. Potter (Journalism ‘74)Principal - Glenn, Burdette, Phillips & Bryson,CPAsAnita RobinsonPresident/CEO - Mission Community BankBob Silva (Business Administration ’68)CFO - Specialty ConstructionChip VisciPresident/publisher - The TribuneORFALEA COLLEGE OF BUSINESS ❚ 49

COMMUNITYAccounting Advisory BoardIndustrial Technology Advisory BoardMark Lynch - chairManager - Chevron CorpTom Brooks (Accounting ’74)Partner - Damitz, Brooks,Nightingale, Turner & MorrissetPatti CapellFrank, Rimerman & Co. LLPAl CarrascoArea director of HR -Ernst & YoungKenneth S. Caveney(Accounting ’89)Director of finance -San Jose SharksThomas Condon(Accounting ’83)VP/treasurer - The CapitalGroup Companies, Inc.Lance Cowart (Finance ’90)Director - Glenn, Burdette,Phillips & BrysonGeorge Famalett(Accounting ’86)Partner -PricewaterhouseCoopersMark Fernandez(Accounting ’94)Ernst & YoungRon GongDirector - Harris-my CFOJames Hughes(Accounting ’00)Grant ThorntonDavid Kanner(Accounting ’76)Partner/owner -Seiler & Company LLPMandy Leastman(Accounting ’95)Executive VP/CFO - FoundersCommunity BankWayne LongcrierOwner - Longcrier & AssociatesRon Lopes (Accounting ’88)Senior accountant - KPMG LLPStephen Moore(Accounting ’98)VP Western Division -Comerica BankMike MuellerRecruiting manager -PricewaterhouseCoopersCecil RobbinsPartner - Hayashi & WaylandJeff Sokol (Accounting ’94)Partner -Deloitte & Touche LLPBlair Pruett - chair (IT ’79)Chief estimator -Structural Steel Division,Global Fabricators, Inc.Mark H. Alexander, Jr. (IT ’71)ConsultantBarry Banducci (CENG ’60)Aerospace engineer (retired)Michael C. Bickel(IT’95 - MSI&TS ’02)President -Rantec Power Systems, Inc.Michael Butala (IT ’78)President/CEO - CAL LightingGreg CampbellArea senior vice president -Arthur J. Gallagher RiskManagement Services, Inc.Ellen L. Chambers (IT ‘94)Senior engineer -TJ Cross Engineers, Inc.Christopher Connors(MBA ’75)General manager -WILKINS - A Zurn CompanyStuart J. Crosby(IT ’96, MSI&TS ’03)Staff program manager -QualcommTracy A. Edwards(Accounting ‘79)CEO - CaseStackGary ErvinSector vice president -Northrop Grumman CorpForrest Fleming (IT ’78)CEO - True Vision Systems, Inc.Terry G. Hellinger (IT ’91)President/owner -Mako Systems, Inc.Eric P. Linkugel(IT ’01, MSI&TS ‘02)Manager, Los Padres divisionservice & sales -Pacific Gas & Electric Co.Joan Passovoy (IT ’76)Senior manager ofboard operations -Applied Micro Circuits Corp(AMCC)Steven RicklefsDirector of operations,engineering - Pratt & WhitneyRocketdyne, Inc.Steve Shiromizu (IT ‘78)Technical associate supervisor -Lawrence Livermore LabsThomas Spengler (IT ’98)CEO - GranicusJohn TurnerProcessing engineer (retired)Ken Ueltzen (IT ’83)VP of supply chain services -Comtek Computer SystemsPackaging Advisory BoardPeter Brown (IT ’91) - chairVP - Lansmont CorporationWilliam ArchibaldGeneral Mills (retired)Bill ArmstrongTechnical developmentmanager -Sealed Air CorporationKerry Azelton (IT ’90)Senior packaging engineer -LogitechCindy BakerVice president -Scope PackagingScott CernosekPresident/owner -Primary Package, Inc.Edward ChurchExecutive director -International SafeTransit Association(ISTA)Sean Gallagher (IT ’03)Account manager -Owens IllinoisBob MallonPresident -RGM AssociatesJames P. MurphyAccount manager -Lavel Solutions GroupAltivity PackagingTony Palandrani (IT ’98)Sales engineer -Garvey CorporationRyan Parsons (IT ’89)Regional businessdevelopment manager -SIEMENS Energy & AutomationPaul RussellSenior globalpackaging manager -Applied Biosystems GroupRob Salinas (IT ’85)Director of packagingoperations -Morning Star CompanyHerb SchuenemanOwner - WESTPAK, Inc.Greg TuckerPresident/CEO -Bay Cities ContainerCorporationHONORARY MEMBER:Paul SinghDirector - Michigan StateUniversity Packaging Program50 ❚ ANNUAL REPORT 2007-08

Operations

OPERATIONSOrfalea College of Businessfaculty membersAccounting & LawLee Burgunder, J.D.Doug Cerf, Ph.D.Li Dang, Ph.D.Earl Keller, Ph.D.Kate Lancaster, Ph.D.C. Tad Miller, Ph.D.Steve Mintz, D.B.A.Rodney Mock, Ph.D.Eddy Quijano J.D.Arline Savage, Ph.D.Andreas Simon, Ph.D.EconomicsEric Fisher, Ph.D.Steve Hamilton, Ph.D.Sanjiv Jaggia, Ph.D.Jason Lepore, Ph.D.Mike Marlow, Ph.D.Kathryn Marshall, Ph.D.Aric Shafran, Ph.D.Dan Villegas, Ph.D.Eduardo Zambrano, Ph.D.FinanceBing Anderson, Ph.D.John Dobson, Ph.D.Samir Dutt, Ph.D.Larry Gorman, Ph.D.Cyrus Ramezani, Ph.D.Hervé Roche, Ph.D.Industrial TechnologyCliff Barber, Ed.D.Isaac Chang, Ph.D.Manocher Djassemi, Ph.D.Eric Olsen, Ph.D.Jay Singh, Ph.D.Lou Tornatzky, Ph.D.Keith Vorst, Ph.D.Jonathan York, Ph.D.ManagementDawn Chandler, D.B.A.Jean- Francois Coget, Ph.D.Rebecca Ellis, Ph.D.Barry Floyd, Ph.D.Colette Frayne, Ph.D.J. Michael Geringer, Ph.D.Ken Griggs, Ph.D.Kevin Lertwachara, Ph.D.Alison Mackey, Ph.D.Tyson Mackey, Ph.D.Patricia McQuaid, Ph.D.William Pendergast, Ph.D.Jim Sena, Ph.D.Rami Shani, Ph.D.Rosemary Wild, Ph.D.MarketingNorm Borin, Ph.D.Jeff Danes, Ph.D.Jeffrey Hess, Ph.D.Joan M. Lindsey-Mullikin, Ph.D.Lynn Metcalf, Ph.D.Stern Neill, Ph.D.Association to AdvanceCollegiate Schools of BusinessThe Orfalea College of Businesshas been continuously accreditedby the Association to AdvanceCollegiate Schools of Business(AACSB) since 1981.The mission of AACSB is toadvance quality management educationworldwide through accreditationand thought leadership.Through the AACSB, OrfaleaCollege of Business Dean DaveChristy serves as a mentor to FortHays State University in Hays, KS,in their quest for continuous improvementleading to accreditation.Christy is serving a four-yearterm as a member of the AACSBInitial Accreditation Committee.National Association ofIndustrial TechnologyThe primary purpose of accreditationby the National Association of IndustrialTechnology (NAIT) is to encourageand recognize the attainment ofcertain professional goals and standardsfor industrial technology.The industrial technology degreeprogram in the Orfalea College ofBusiness is accredited by NAIT, theorganization responsible for: thepromotion of industrial technology inbusiness, industry, education, andgovernment; the accreditation of industrialtechnology programs in colleges,universities, and technical institutes;and certification of industrial technologistsand recognition of their continuedprofessional development.52 ❚ ANNUAL REPORT 2007-08

OPERATIONSBeth Brenner joins college asassistant advancement directorCollege hires two instructional designersBeth Brenner has joined the staff ofthe Orfalea College of Business as theassistant director of advancement.Brenner has several years ofsuccessful development and fundraisingexperience, resulting in thecultivation and acquisition of over$10 million in charitable gifts for herformer organizations.For two years, Brenner wasthe California Allstate Foundationmanager and seniorcommunicationsconsultant for theAllstate InsuranceCompany, leadingall aspects of thefoundation andBeth Brennerhelping to developand implementannual strategic plans to maximizephilanthropic initiatives.Prior to her work there, Brennerwas the director of development anddonor services officer for two yearsat the Sacramento Region CommunityFoundation. In that capacity, sheworked with corporate donors; ledthe board fund development committee;served as the communicationsdirector; developed the annualfundraising plan; implemented thefirst donor services program; and ledstaff and consultants on large projects.Other related experience forBrenner includes a position as themarketing manager for CottageHouse Inc. in Sacramento; the northwestdevelopment associate for theCanine Companions for Independencein Santa Rosa; and an executiveteam leader for Mervyn’s.Brenner has a B.A. in CommunicationStudies from Sonoma StateUniversity and M.A. in NonprofitAdministration from the Universityof San Francisco.Brenner and her husband, Zach,live in Paso Robles.Teresa Cameron and FrankGonzales have been hired bythe Orfalea College of Businessas instructional designers.With robust programs designedfor a constantly changingglobal environment, the OrfaleaCollege prepares students forsuccess in modern businesscareers at both the undergraduateand graduate levels. Excellentfaculty members, highly motivatedstudents, and a state-ofthe-artteaching facility allcontribute to the success of ourstudent population.Our instructional designersassist and work collaborativelywith faculty and subject matterexperts in the use of technologyto enhance pedagogy and improvestudent learning. They willalso partner with the college’sassessment coordinator to assesslearning outcomes and conductresearch for best practices andemerging distance-learningmethodologies for the developmentand improvement of instructionalsystems.Cameron specializes incoaching users in online synchronouslearning environmentsusing Web conferencing. Effectivelyengaging learners in thevirtual classroom often employsdifferent teaching methods andcourse design, and she workswith faculty to make their presentationsactive online.Cameron often moderates orhosts sessions in support ofpresenters and participantsduring sessions while managingthe presenters’ use of thecollege’s Web conferencingservices. Prior to working at theOrfalea College of Business, sheTeresa CameronFrank Gonzaleswas an educational technologyspecialist at Stanford University’sSchool of Education.As a former high schoolteacher and computer coordinator,she brings a high level ofexperience in the pedagogy andcurriculum development ofonline courses. Cameron has amaster’s degree from PepperdineUniversity’s Online EducationalTechnology program with aresearch emphasis in evaluatingcommunication skills in an e-learning environment.Gonzales comes to thecollege from the University ofSouthern California’s MarshallSchool of Business. He bringsexperience in instructional designand faculty support and a proventrack record of supporting facultyonline course development.Gonzales has a uniqueperspective in the area of instructionaltechnology from both thecorporate and business side aswell as the academic side. He hasperformed Web-based trainingdevelopment for large companiessuch as Toyota, Honda andGeneral Motors while alsocreating a clientele of smallerbusinesses.Gonzales brings a full arrayof instructional design/development,graphic design, videoproduction and technology trainingto the college.ORFALEA COLLEGE OF BUSINESS ❚ 53

OPERATIONSStudent leadersAdvising Center advisorsoffer guidance to peers alongcareer paths in businessStudents look to an advisor as asource of guidance, and they lookto their peers to share and enjoycommon social experiences.“If you combine the two, ahybrid position evolves, and thatis what we are – Peer Advisors,”says Emily Posselius. “Withinthis fusion, leadership becomes thekey to successful relationships withthe students.”As Peer Advisors at the OrfelaeaCollege of Business Advising Center,Posselius and John Vignocchi“strive to bridge the gap between theposition of counselor and friendwhile upholding reputable valuesand ethical standards. The PeerAdvising Model creates professionalrelationships with students whilerelating to them on a personal level.”The Advising Center team is adiverse group of individuals unitedby the common goal of helpingstudents graduate in a timely manner.In order to achieve this goal,they not only advise students in thethree curriculums, but also providethem with information about specificconcentrations and help to guidethem through the university’s complexpolicies and procedures.The Advising Center organizesand hosts multiple events for incomingstudents where leadership becomesa tool for all-around success.At Cal Poly’s Open House in April,Peer Advisors talk with acceptedstudents about the excellent educationCal Poly has to offer.The center also leads the SOARProgram (Student Orientation andAdvising Resources), which acquaintsincoming freshmen and transferswith the Orfalea College of Business.“Our main objective is to lead ourstudents to enjoy Cal Poly andgraduate on time.”– John VignocchiAdvising Center Director Kris McKinlayexplained curriculum, prerequisites andrequirements to enthusiastic incomingfreshmen last July.“We introduce them to thecurriculum, registration information,and offer insight into life at CalPoly,” says Vignocchi.A third event is Week of Welcome(WOW) Academic Day, heldevery September to introduce newstudents to the concentrations andencourage them to get involved inthe associated business clubs.Peer Advisors take on the mainleadership role during all events andstrive to create an environmentwhere students become educatedabout our college while still havingan enjoyable time.“Once the students are immersedin the Cal Poly culture, we continueto assist them along the way,” saysPosselius.During scheduled appointments,the advisors share available informationand help students plan theirschedules, discover their niche in aconcentration (by teaming up withJane Johnson at Career Services),and learn about college policies.“Our main objective is to leadour students to enjoy Cal Poly andgraduate on time,” says Vignocchi.“As a result, the Orfalea College’sgraduation rates have increased, andwe consistently maintain the highestgraduation rates among any of thecolleges at Cal Poly.”Posselius says that no matterwhat the activity, “We hold ourpositions to the highest standards sowe can best represent the OrfaleaCollege of Business. Our commitmentis not taken lightly, and ourdaily leadership bears constantrewards. We’re here for each andevery Orfalea College of Businessstudent – leading, guiding and workingto enhance the overall educationand experience at Cal Poly.”54 ❚ ANNUAL REPORT 2007-08

SUPPORT DESERVING BUSINESS STUDENTS ...INVEST IN THE NEXT GENERATION OF BUSINESS FACULTY ...ENHANCE LEARN-BY-DOING BUSINESS FACILITIES ...MAKE A GIFT TO ORFALEA BUSINESS AND RECEIVEINCOMELIFEFORCHARITABLE GIFT ANNUITIESprovide income to you whilesuporting the Orfalea College ofBusiness at Cal Poly.SAMPLECHARITABLE GIFTANNUITIESAGE RATE50 5.3%60 5.7%70 6.5%80 8.0%90+ 11.3%BENEFITS:■ Receive up to11.3% dependingon your age.■ Receive assuredlife income.■ Receive significanttax benefits.■ Designate your gift to the businessprogram of your choice.FOR MORE INFORMATIONand a complimentary illustration,please contact:PLANNED GIVING ANDENDOWMENTSHeron HallCalifornia Polytechnic State UniversitySan Luis Obispo, CA 93407Phone: (805) 756-7125Toll free: (800) 549-2666Fax: (805) 756-2711E-mail: plannedgiving@calpoly.eduWeb: www.plannedgiving.calpoly.edu

Orfalea College of Business DirectoryDean’s OfficeDean: Dave Christy, Ph.D.Associate Dean, Undergraduate Programs: Brian Tietje, Ph. D.Associate Dean, Graduate Programs & Faculty Development: Chris Carr, J.D.Administrative Analyst/Specialists: Dolores Flores, Karel FloydDirector of Advancement: Pamela McClure, CFREAssistant Director of Advancement: Beth BrennerDirector of College & Alumni Relations: Leslie McKinley, CFREAdministrative Support Coordinator - Advancement & Alumni Relations: Tamara VasseyDean’s Office: 805.756.2705Undergraduate Program Support OfficesAccountingChair: Doug Cerf, Ph.D. ................................................................................................805.756.2871Director, MSA/Tax: Eddy Quijano .................................................................................805.756.1369Administrative Assistant: Norinne Cruzat .....................................................................805.756.1543EconomicsChair: Steve Hamilton, Ph.D. ........................................................................................805.756.2555Administrative Assistant: Sheila Smith ......................................................................... 805.756.2783FinanceChair: Cyrus Ramezani, Ph.D. ...................................................................................... 805.756.1168Administrative Assistant: Sheila Smith ......................................................................... 805.756.1472Industrial TechnologyChair: Lou Tornatzky, Ph.D. ..........................................................................................805.756.2680Administrative Assistant: Sandy Edar ...........................................................................805.756.2676ManagementChair: Rosemary Wild, Ph.D. ........................................................................................805.756.2695Administrative Assistant: Sandy Edar ...........................................................................805.756.2012MarketingChair: Lynn Metcalf, Ph.D. ............................................................................................ 805.756.2010Administrative Assistant: Norinne Cruzat .....................................................................805.756.1543Graduate Program Support OfficesDirector: Chris Carr, J.D. ...............................................................................................805.756.2657Assistant Director: Victoria Walls .................................................................................. 805.756.2637Administrative Assistant: Paige Wells .......................................................................... 805.756.2708Administrative ServicesSupervisor: Jeannie Souza ...........................................................................................805.756.2048Computer Lab: 805.756-2635Director: Richard Asplund .............................................................................................805.756.6740Supervisor: Maria Rorabough .......................................................................................805.756.2688System Administrator: Joe Emenaker ..........................................................................805.756.5129Instructional Design & Assessment of LearningTeresa Cameron ............................................................................................................ 805.756.1605Frank Gonzales .............................................................................................................805.756.2705Media Presentation SpecialistMedia Presentation Specialist: Stephen Hughes .........................................................805.756.2983Undergraduate Advising Center: 805.756.2601Advisors: Kris McKinlay, Charity Romano & Amy SwansonGeneral Information: 805.756.2704Web site: ............................................................................................................ www.cob.calpoly.eduFax: ................................................................................................................................ 805.756.5452Editor: Leslie McKinley ❚ Photography: Bob Anderson, Ken Chen, Tony Hertz, Stephen Hughes, Leslie McKinleyThis publication is not printed at state expense.56 ❚ ANNUAL REPORT 2007-08

Orfalea College of Business degree programs❚ Bachelor of Science in Business AdministrationConcentrations:AccountingFinanceInformation SystemsInternational BusinessManagementMarketing❚ Bachelor of Science in Economics❚ Bachelor of Science in Industrial Technology❚ Master of Business Administration (MBA)Engineering Management Program❚ Master of Science in Accounting (Taxation)❚ Master of Science in Industrial & Technical Studies (MSI&TS)❚ Engineering Management Program (EMP)

BUSINESS WOWSNEW STUDENTSThe O’Neill Green in front of the Orfalea College of Business was a swarm of eager incoming freshmen on Sept. 17 as theuniversity celebrated Academic Day during Week of Welcome (WOW) activities. Information Systems faculty (seated)Rosemary Wild, management area chair, Ken Griggs, and Barry Floyd were on hand to answer students’ questions.NONPROFIT ORGU.S. POSTAGE PAIDSANTA BARBARA, CAPERMIT #1215California Polytechnic State UniversitySan Luis Obispo, CA 93407-0300