Douglas T. Breeden - Duke University's Fuqua School of Business

Exchange
THE MAGAZINE OF THE FUQUA SCHOOL OF BUSINESS
Douglas T. Breeden
positive world impact
SUMMER 2007

letter} from the editor
Dear Fuqua Community:
There have been some exciting technological launches as of late. There is the new technology in Japan that allows
you to move objects by reading your brain activity. In Australia, an experimental jet flew at ten times the speed of
sound. The buzz of Apple’s iPhone is getting louder by the day. And with all of that competition in toe, we humbly
announce the launch of Exchange online: www.fuqua.duke.edu/exchange.
We are very excited about forging this new initiative and entering the Internet world of journalism. Our goal is to
offer complementary features online to the print publication that you receive in your mailbox. For example, in this current
issue we have a faculty research story regarding Duke MBA Professor Gavan Fitzsimons’ research on branding and
behavior. Accompanying this story, Laura Brinn, research communications manager, and Matthew Duckworth, multimedia
production manager, produced a video which you can find on the online version of Exchange magazine. Other special
features for this issue include an unedited Q&A between Tim Profeta, director of the Nicholas Institute for
Environmental Policy Solutions, and Kip Kelly, Executive Education operations director; and the full version of
“Complexity Economics and Oil Price” by Pakpoom Vallisuta ’98, co-founder and senior partner of the Quant Group.
Class notes will remain in the same current online format and will not be accessible via Exchange online. As always,
we welcome your input and feedback. Please contact me directly or the editorial staff at exchange@fuqua.duke.edu with
any questions or comments.
All the best,
Lynsi Derouin-Steffen, Editor
E-mail: lynsi@duke.edu
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
A message from each of the 1,200 students, faculty, and staff whose lives were touched by your gift.
Every gift to the Fuqua Annual Fund makes a difference to everyone at Duke. Thank you to the 2,464 alumni and friends
who contributed $2,565,718 during the fiscal year and helped enhance the education of tomorrow’s business leaders.
fuqua.edu/annual fund

features
16{
douglas t. breeden
positive world impact
Doug Breeden’s tenure as Dean of The Fuqua
School of Business has inspired a positive world
impact. We honor Breeden’s legacy and thank him
for taking the school higher and higher.
25{ the research advantage
30{
Features the research programs of four Fuqua
faculty members: Mary Frances Luce, Leslie Marx,
David Robinson, and Ashleigh Shelby Rosette.
complexity economics
and oil price
Pakpoom Vallisuta ’98 explains his own
chaos theory.
departments
3{
7{
faculty news & research
Faculty teaching awards, Administrative
appointments
page 5: When Cookies Catch the Cooties
page 6: Socially Responsible Hip Hop
school briefs
The Duke Goethe program graduates its first class,
Spring Board of Visitors meeting recap, Class
reunions, HSM program may influence Chinese
health care system
page 12: Essential Principles of Trust and Integrity
page 14: Going Green is Good Business
Exchange} Summer 2007
Volume 20, number 2
15{
32{
student profile
Jens-Thorsten Rauer, Duke Goethe, Class of 2008
class notes
page 37: Jose Buenaga ’93 profile
page 57: Jessica Carter ’02 profile
Exchange Magazine: Published quarterly by Duke University, The Fuqua School of Business, Box 90118, Durham, North Carolina 27708–0118
©2007, The Fuqua School of Business, Duke University
Editor
Lynsi Derouin-Steffen
lynsi@duke.edu
Associate Editor
Nancy Harper
nh1@duke.edu
Class Notes Editor
Bonnie Gregory
bgregory@duke.edu
Contributing Writers
Laura Brinn
Lynsi Derouin-Steffen
Kip Kelly
Mita Mallick
John Manuel
Beth McNichol
Christian Privett
Pakpoom Vallisuta
Design
Gamil Design
Photography
University Photography
Printing
Harperprints
Fuqua Administration
Blair Sheppard, Dean
William Boulding,
Senior Associate Dean
for Programs
Nevin W. Fouts,
Associate Dean for
Information Technology
Jennifer Francis,
Senior Associate Dean for
Faculty and Research
John Gallagher,
Associate Dean for
Executive MBA Programs
Michael Hemmerich,
Associate Dean for
Daytime MBA Program
Dan Nagy, Associate Dean
for Global Business
Development
Ray Smith, Associate Dean
for Executive Education
Gordon D. Soenksen,
Associate Dean
for Development and
Alumni Relations
Jill Worthington,
Associate Dean for Finance
and Administration

letter} from the Dean
At the core of any business school
is its faculty. Since I left the school
seven years ago to head up Duke
Corporate Education, Doug has
performed the remarkable feat of
simultaneously growing the size
and the quality of the faculty.
2 exchange
One of the first tasks required of an incoming leader is to assess the hand she
or he was dealt in light of the opportunities and challenges confronting the
organization. Thus, with a mix of anticipatory glee and nervous anxiety I have
been meeting with faculty areas, studying the strategic plan and data about the
school, and speaking with competitors, recruiting institutions, students, staff,
and board members. From this research, I can say with extreme confidence that
I personally, and we the larger community at Fuqua, owe Doug a great deal of
thanks. Doug has carefully built a set of capabilities essential to sustaining
the quality of the school, while also positioning us to make the next step to
becoming one of the very top business schools in the world.
At the core of any business school is its faculty. Since I left the school
seven years ago to head up Duke Corporate Education, Doug has performed
the remarkable feat of simultaneously growing the size and the quality of the
faculty. Under his leadership the faculty grew from seventy-nine to ninety-six
and the number of chaired faculty from thirteen to twenty-three with ten more
chairs in the process of being funded. To support this growth, the PhD program
grew from forty-seven to over eighty students. But, even more importantly, the
quality of the faculty has grown along with its scale. In my own interactions I
have been overwhelmed by how interesting, capable, and committed the Fuqua
faculty is. But, it is not just my impressions that matter. Last year, Fuqua had the
most productive faculty in the world on a per capita basis, publishing almost
three-fourths of an article per year, per faculty member. The next highest per
capita rates were from Stanford, Berkeley, Columbia, and Dartmouth, all with
around half an article per year, per faculty member. This productivity has
steadily risen over Doug’s tenure.
But faculty is not the only asset Doug has served to improve over his
tenure. Whether it be (1) capital: the endowment grew from $121 million to
over $200 million; (2) physical plant: the Fox Center was completed on his
watch and the new teaching wing, Breeden Hall, begun; (3) annual giving: the
annual fund grew from $1.4 million per year to over $2.5 million; (4) research
centers: we have added three new centers; or (5) alliances: we have now forged
deep relationships with Seoul National University and the University of
Frankfurt, Doug has served to build the strength of all of the assets needed to
run a world-class business school.
A risk of such growth is that quality might suffer. But here too, Doug has left
a wonderful legacy. The Executive MBA programs are consistently considered
among the best in the world, Executive Education is the best in the world, PhD
student placement is very strong, and people report that the new Duke Goethe
Executive MBA has students as strong as those in any program. And, student
quality in the Daytime program has improved steadily since we took the necessary
step of adding a section at the beginning of Doug’s tenure as Dean.
So, as the person who gets to play the hand Doug has dealt, I wish to thank
him for all he has accomplished in his time as Dean and for the wonderful position
in which he has left the school. As he returns to the faculty, I hope he will
be proud to see what we make of the place he helped build as we continue our
progress toward leadership among the great business schools of the world.

ciber releases 2006
research report
The Center for International Business
Education and Research (CIBER) has
released the 2006 comprehensive
research report Next Generation
Offshoring: The Globalization of
Innovation. This comprehensive report
provides detailed analysis and results
from the most recent offshoring
research network survey. The published
report, authored by Professor
Arie Lewin, contains a wealth of information
pertaining to trends in offshoring,
as well as analysis of the business principles
behind those trends.
campbell harvey
receives award
Campbell R. Harvey, the J. Paul Sticht
Professor of International Business
at Fuqua, and co-author Claude B. Erb
of Trust Company of the West, were
honored with the Graham and Dodd
Award given by the CFA Institute.
The prestigious award recognizes
their paper, “The Strategic and Tactical
Value of Commodities Futures,”
(www.cfapubs.org/toc/faj/2006/62/2) as
the best article published in the
Financial Analysts Journal in 2006.
Erb and Harvey respond to the recent
over-selling of commodity futures
(many have argued that commodities
have the same expected returns as
equities). Erb and Harvey show that
the long-term inflation adjusted
return on commodities is negative.
They show that any excess return to
commodity futures is likely due to
tactical rebalancing.
More information is available at
www.cfainstitute.org/aboutus/press/rele
ase/07releases/20070327_01.html
jim smith elected
president of decision
analysis society
Jim Smith, a Duke MBA professor of decision
sciences, has been elected president
of the Decision Analysis Society
(http://decision-analysis.society.informs.org/),
the largest division of The Institute
for Operations Research and The
Management Sciences (INFORMS).
Smith will serve a two-year term as
president-elect before beginning his
two-year presidency.
The Decision Analysis Society
serves over one thousand members
representing academia, business, and
government. Smith served a previous
term as secretary/treasurer of the
Decision Analysis Society from
1998–2000. Fuqua professors Bob
Winkler and Ralph Keeney are both past
presidents of the society, serving
their terms in 1990–1992 and
1986–1988, respectively.
will mitchell
appointed co-editor
of journal
Will Mitchell, the J. Rex Fuqua Professor
of International Management, has
been appointed co-editor of the
Strategic Management Journal. SMJ is
the official journal of the Strategic
Management Society. It is devoted to
the improvement and further development
of the theory and practice of
strategic management and designed
to appeal to both practicing managers
and academics.
News & Research {faculty
finance professors
recognized
Duke MBA Finance Professors
Campbell R. Harvey and John R. Graham,
along with co-author Shiva Rajgopal of
the University of Washington, received
a Graham and Dodd Scroll award from
the Financial Analysts Journal Advisory
Council and Editorial Board.
The professors’ paper “Value Destruction
and Financial Reporting Decisions,”
(www.cfapubs.org/toc/faj/2006/62/6) was
published in the November/December
2006 Financial Analysts Journal.
The article makes the remarkable
finding, based on a survey of 400
senior executives, that seventy-eight
percent of U.S. CFOs would sacrifice
long-term shareholder value to
smooth earnings. The study finds
widespread use of “real” earnings
management, which is managing the
quarterly earnings by altering the
firms’ investments (such as research
and development, and advertising).
Graham, Harvey, and Rajgopal find
that this real earnings management
seems to be more prevalent than
accounting-based management in the
post Sarbanes-Oxley world.
They argue the amount of value
routinely destroyed by companies
striving to hit earnings targets
exceeds the value lost in recent
high-profile fraud cases.
Harvey and Graham have both been
honored with Graham and Dodd
Scroll awards in the past. This is
Harvey’s fifth paper, and Graham’s
second, to receive the honor.
summer 2007 3

left to right
RONNIE CHATTERJI
ASHLEIGH
SHELBY ROSETTE
DAVID ROBINSON
SHANE DIKOLLI
administrative changes
Beginning July 1, there have been a few changes in the Fuqua administration. Bill
Boulding completed his term as associate dean for the Daytime MBA program and
has been appointed as senior associate dean for programs. Mike Hemmerich, who
served as associate dean for marketing and communications, assumed the position
of associate dean for the Daytime MBA program. At the time of this printing, the
position heading up the marketing and communications department remains vacant.
In response to questions regarding Fuqua’s relationship with Duke Corporate
Education, Duke CE will remain an independent entity reporting to its own board and
eventually the Duke Board of Trustees. Fuqua and Duke CE will continue to manage
shared opportunities. Bill Boulding will have responsibility for Duke CE activity on
the program side, and John Payne will remain as the Fuqua representative on the
Duke CE board. Blair Sheppard will become chairman of the board, a position that is
traditionally held by the Dean of The Fuqua School of Business.
faculty teaching awards presented
Faculty members were recognized
for teaching excellence and innovation
by the classes of 2007 graduates
at their respective commencement
ceremonies. Management Professor
Aaron “Ronnie” Chatterji won The
Duke MBA—Cross Continent core
teaching award.
Former Management Professor
Yuval Rottenstreich (now of New York
University) received The Duke Goethe
MBA core teaching award for his
Managerial Effectiveness course.
4 exchange
Management Professor Ashleigh
Shelby Rosette won the elective teaching
awards for both The Duke MBA—Cross
Continent and The Duke Goethe MBA
programs, in recognition for her course
on negotiations.
Finance Professor David Robinson
was presented The Duke MBA—
Daytime Daimler Chrysler Elective
Teaching Award. Simon Gervais, associate
professor of finance, and Debu
Purohit, professor of marketing, were
recognized as finalists.
The Daimler Chrysler Core
Teaching Award went to Shane Dikolli
for his first-year teaching performance
in the Managerial Accounting
core course. Three finalists for this
award were: Michael Lenox (Foundations
of Strategy); DJ Nanda (Managerial
Accounting); and Mohan VenKatachalam
(Financial Accounting).

when cookies catch the cooties
Of all the things companies worry
about when selling food products,
catching “cooties” is probably not
high on the list. But new research
suggests it should be.
Products such as lard and feminine
napkins evoke feelings of disgust that
can reduce the appeal of other products
they may inadvertently come in
contact with in shoppers’ grocery
carts or on store shelves, according to
researchers at Fuqua and Arizona
State University. The researchers suggest
that companies may want to
reconsider their packaging and shelf
positioning strategies in order to
safeguard their brands from offending
products.
The researchers say food items sold
in clear packaging are especially vulnerable
to the effects of “product contagion,”
the phenomenon by which
one product's negative properties can
be transferred to another.
The research was conducted by
Gavan Fitzsimons, a professor of marketing
and psychology at Fuqua, and
Andrea Morales, an assistant professor
of marketing at Arizona State’s W.P.
Carey School of Business. The findings
appeared in the May 2007 Journal
of Marketing Research.
Other ordinary products that can
evoke feelings of disgust in consumers
include trash bags, cat litter,
diapers, cigarettes, mayonnaise, and
shortening. “Because these products
are so common, consumers are
likely to experience feelings of disgust
on routine shopping trips,”
Fitzsimons said.
Fitzsimons and Morales sought to
understand how “disgusting” products
can affect consumers’ opinions
of other products in their grocery
carts. They performed a series of
experiments in which participants
observed food products placed close
to or touching a distasteful product.
In all cases, products that touched or
rested against disgusting products
became less appealing than products
that were at least an inch away from
the offending products. The effect was
also enduring. Participants asked more
than an hour after observing the products
how much they wanted to try a
cookie were less likely to want it if the
package of cookies had been in contact
with a package of feminine napkins.
The researchers say this behavior is
not necessarily irrational, as it likely
derives from basic instincts that caution
humans against eating foods that
have come in contact with insects or
other sources of germs.
“Our experiments demonstrated
quite clearly that caution about eating
contaminated food is simply misapplied
to contexts where real contamination
is not possible,” Morales said.
Fitzsimons and Morales identified
product packaging as one factor that
can prevent product contagion.
Opaque packaging was seen as a sufficient
barrier to prevent the spread
of unpleasant qualities, while products
in transparent packaging
remained susceptible to the negative
qualities of their neighbors in the
shopping cart.
In one experiment, participants
viewed packages of rice cakes—some
wrapped in transparent packaging
and some in opaque paper carrying a
“rice cakes” label—that were touching
a container of lard. The rice cakes in
the clear packaging were later estimated
to have a higher fat content
than those in the opaque packaging.
“The product packaging and positioning
led the participants to view
the rice cakes as taking on fat content
from the lard,” Morales said.
“Prior marketing research on packaging
has held that clear packaging
helps sell products because it allows
customers to visualize what they are
buying,” Fitzsimons said. “Based on
this research, I would caution marketers
that they need to be attuned to
not only what is inside their packaging,
but also to what is around a product
that could negatively affect its sales.”
Fitzsimons and Morales point to
multiple opportunities for products to
mingle in grocery carts or on store
shelves, where products such as lard
and baking goods, diapers and baby
food, and mayonnaise and soup are
often found together.
—Laura Brinn
faculty {
See Exchange online for a video
explaining this research.
(www.fuqua.duke.edu/exchange)
summer 2007 5

THIS ARTICLE
APPEARED IN THE
RALEIGH NEWS AND
OBSERVER
socially responsible hip hop
How do you create a socially conscious
rapper? You pay him, of course.
While Bill O’Reilly, Anderson Cooper,
Oprah Winfrey, and others have
recently decried the coarseness of
hip-hop culture, they have been short
on feasible solutions. Thus, we will no
doubt continue to hear these songs,
see these videos, and worry about
their social impact.
The latest incarnation of this
debate involves the Stop Snitching
movement, which entered the public
consciousness when NBA player
Carmelo Anthony was shown in a widely
circulated DVD which warns potential
witnesses and informants looking for
an immunity deal about the dangers of
cooperating with the police.
According to a recent 60 Minutes
report by Cooper, the Stop Snitching
movement is having an appreciable
impact on inner city crime investigations.
In some urban areas the percentage
of homicide investigations
that result in an arrest has dropped
into the single digits, presumably
because would-be witnesses and
informants are reluctant to talk with
the police. Meanwhile, Stop Snitching
T-shirts have become popular fashion
items, even as some public officials
seek to ban them entirely.
The media outcry over the Stop
Snitching movement and the seemingly
endless outrage over naughty
lyrics will no doubt result in calls for
censorship (even Russell Simmons
wants to ban certain words) or labeling
of records, which will, of course, only
increase demand for and the street
credibility of the offending artists.
So what might we do to actually
make a difference? How about taking
a lesson from socially responsible
investors and use market forces to
6 exchange
create positive social benefits?
Although you would never hear it on
O’Reilly’s program, rappers who
rhyme about violence, sex, drugs,
and their hatred of snitching are a
lot like corporations that make huge
profits but have negative social
impact. Enron, meet Cam’ron. For
many years, socially minded investors
have pooled their resources into
social funds that support companies
rated as socially responsible.
My analysis of corporate social
responsibility initiatives indicates
that companies do respond to socially
minded investors, consumers, and
other stakeholders by cooperating
with social rating agencies, releasing
corporate social responsibility
reports, and meeting with activists.
With over $2 trillion invested in social
funds, corporate social responsibility
is now discussed in boardrooms and
classrooms around the world.
While the jury is still out on
whether socially responsible investors
are rewarding the right companies, it
is clear that individual companies can
use their market power to create social
impact across the economy. Now that
Home Depot has introduced a large
environmental labeling program, their
suppliers will begin to adjust their
own operations to meet the demands
of America’s second largest retailer.
Niche companies like Whole Foods
can grow quickly if they deliver a good
product and have the loyal support of
socially conscious consumers.
Similarly, there are already many
talented hip hop artists like Common,
Mos Def, and Talib Kweli who rap with
a social conscience. And numerous
others are waiting to be discovered on
iTunes, MySpace, or even in your
quaint local record store. But without
consumer demand, these rappers will
always be drowned out by audacious
lyrics. So, why don’t Bill, Anderson,
Oprah, you, and I contribute (in accordance
with our respective incomes) to a
sort of venture capital fund to identify
socially conscious rappers and support
them with studio time, marketing and
distribution, and radio air play? This
money could provide incentives for
aspiring rappers to take their music in
a more positive direction.
Conservatives who favor marketbased
solutions and fret about our cultural
decline would be supportive, as
would be progressives, who are probably
fans of Common and the rest already.
Moreover, concerned citizens could
counter the negative influence of lyrics
that demean women, celebrate drugs,
and advocate a socially destructive set
of ethics by supporting talented, but
underappreciated artists who can
make powerful social contributions.
Over time, these artists could sell
records based on their lyrical prowess
and their social mission the same way
Ben and Jerry’s sells great ice cream
and good feelings today.
Of course, association with such a
fund would itself be a potential threat to
an artist’s street credibility. So, a catchy
name and expansive product line of
accessories would be a must. After all, a
“Stop Stop Snitching” T-shirt could be
mass-produced at low cost. And if it
could be done in a factory that paid a living
wage, allowed unions, and had safe
working conditions, there would be a
long line of socially minded investors
eager to buy one.
—Aaron K. Chatterji
Aaron K. Chatterji is an assistant professor
of management at Duke University’s
Fuqua School of Business and a fellow
at the Center for American Progress.

duke mba games
exceeds goal for
special olympics
This year’s Duke MBA Games Auction
took place on Friday, February 23,
2007, with the silent auction in the
Fox Center and the live auction in
Geneen Auditorium. Attended by 600
Duke MBA students in the Daytime
program, Weekend Executive MBA
students, faculty, staff, and other
Duke community members, the event
generated $50,460, not including corporate
sponsorships, which were a
new addition this year. In total, this
represents a 20 percent increase in
revenue over last year’s auction.
On April 14 over 100 MBA students
from thirteen visiting schools (plus
Fuqua) and seventeen Special Olympic
athletes participated in the annual
MBA Games. As a result of these two
events, MBA Games donated $102,100
to Special Olympics North Carolina,
exceeding the annual goal of
$100,000. Major corporate sponsors
included The Ford Foundation and The
John Deere Foundation.
If you are interested in being
involved or supporting the twentith
anniversary of The Duke MBA
Games in 2007–2008, please contact
steve.abrahams@fuqua.duke.edu or
emily.bickel@fuqua.duke.edu.
fuqua and iima create
global leaders program
Fuqua has established a new program
in partnership with the Indian
Institute of Management Ahmedabad
(IIMA), one of India’s leading business
schools. This new executive
education open enrollment program
launches in August.
Distinguished faculty from IIMA
and Fuqua will collaborate on the
hsm program may influence
chinese health care system
program from opposite sides of the
world, reflecting the global scope of
the program’s title, “Growing and
Innovating in a Flat World.”
The Global Leaders Program (GLP)
includes eight days of study in India
followed by eight days at Fuqua. The
study course aims to help senior
executives meet the expectations of
investors and gain an understanding
of the multiple cultures contributing
to the world economy. The
course is designed for senior-level
management professionals from
multinational or large national corporations
and for mid-size firms
looking to expand globally.
The first eight-day session begins
August 20 on IIMA’s campus, with the
second eight-day stint starting on
September 17 at Fuqua.
school news {briefs
Fuqua’s Health Sector Management program (HSM)
may play a role in helping transform the Chinese
health care system. In late April, HSM hosted a visiting
delegation of senior leaders from China’s most
prestigious health care system, Peking University (PKU) Health Science Center. Over a
ten-day period, HSM worked closely with the leadership of Duke University Medical
Center to facilitate discussions regarding the improvement of health care delivery in
China. Delegation members attended presentations at both Fuqua and the Medical
Center and toured Duke Health System facilities to gain firsthand knowledge of care
delivery in the U.S.
Fuqua faculty led sessions and case discussions regarding comparative health
care delivery models, health insurance economics, health care market segmentation,
and health care financing. Sessions were led by Kevin Schulman, director of the HSM
program, and Professors Will Mitchell, Peter Wilson, and Mary Frances Luce. Learning
took place on both sides, as the presidents of PKU’s various hospitals spent a morning
outlining the strategic challenges facing their own institutions as China becomes
a more market-driven economy.
Peking University has committed to a strategic partnership with Duke, which
includes collaborations in clinical research, cardiology, and oncology; they have also
expressed interest in partnering with Fuqua to develop a Health Sector Management
program to train current and future Chinese health care leaders. Such a partnership
would be an extension of the increasingly global orientation of the HSM student
population and curriculum.
dean’s distinguished
speaker series
The Dean’s office had another successful
year with their Distinguished
Speaker Series. Highlights included
Governor of The Federal Reserve
Board, Susan Schmidt Bies, being interviewed
by CNBC immediately following
her talk; Bob Johnson, founder of
Black Entertainment Television and
owner of the Charlotte Bobcats;
Michael Dell, president, chairman, and
CEO of Dell, Inc.; and Jamie Dimon,
CEO of JPMorgan Chase Company.
summer 2007 7

spring board of
visitors meeting
The spring Board of Visitors meeting
was held on April 20. Duke
President Richard Brodhead and Peter
building support is strong
8 exchange
Lange were in attendance as Fuqua
Dean Douglas Breeden was honored for
his six years of service as dean of the
school. Brodhead announced Duke
Trustees’ approval for the new building
at Fuqua to be named “Breeden Hall.”
Alumnus Bill Luby ’85 was recognized
as a centurion member of the
Isle Maligne Society and received a
bronze eagle for his generous commitment
of $100,000 to the Center for
Entrepreneurship and Innovation (CEI).
Two Board of Visitors’ members and
their wives were recognized as principal
members of the Isle Maligne Society
and presented Steuben eagles. Gerald
and Agnes Hassell were honored for
their generous commitment of
$1 million to establish the Spencer R.
As construction continues on Breeden Hall, the new classroom and library addition,
support toward the effort has grown. Fuqua continues to push toward a $16 million
fund-raising goal. This campaign has seen great support from alumni as sixty-seven of
the seventy-eight pledges have been committed by graduates of the business school.
Three significant gifts have been secured in recent months to spark the totals closer
to the final goal.
Frank Riddick III ’80, president and CEO of Formica Corporation, committed Formica
product for the Fuqua facilities at a value of $500,000. Riddick is a member of the
Board of Visitors and lives in Dallas, Texas.
Bruce and Wendy Mosler pledged $250,000. Bruce, a Fuqua Board of Visitor, is the
president and CEO of Cushman and
Wakefield. Wendy graduated from Duke in
1980. They live in New York.
Scott and Emily Rand pledged
$250,000. Scott is a 1993 Fuqua graduate
and a member of the Board of Visitors. He
founded Durango Investments in 2001.
The Rands live in Arlington, Texas.
Hassell Professorship in honor of
Gerald’s father. Gerald has served as the
Board chair since 2005. Dick and Ginger
Mead were recognized for the fulfillment
of their commitment for the D.
Richard Mead Jr. Family Professorship.
Fuqua Finance Professor John Graham
holds that chair.
Also at the meeting, students of The
Duke MBA—Daytime Class of 2007
were honored. Ben Kennedy and Raja
Gupta were presented with The
Keohane Award for Leadership for
their work on the MBA Association;
the Distinguished Service Award was
presented to Lisa Previte; and the Asa
T. Spaulding Award was presented to
Stephanie Nelson.
Recent commitments at the $25,000
and above level have been made
by the following:
Meghan W. & Robert F. Cioffi B ’98
Formica
Jane H. N ’78, B ’80 &
Scott H. Gamber B ’79
Jill M. T ’89 &
Seth E. Gardner T ’89, B ’94, L’94
Merryl & Barry S. Gersten B ’87
Dina & Paul M. Givens B ’94
Elizabeth & Jay A. Mednikow B ’90
Margaret E. Miller B ’94
Carol & Terrence J. Miller B ’99
Wendy F. T ’80 & Bruce E. Mosler
Kelley MacDougall &
Michael A. Pausic B ’89
Steven C. Pierson B ’95 &
Stacy B. Krieger
Matthew L. Porio T ’86, B ’89
Emily & L. Scott Rand B ’93
Glenn R. Richter B ’87
Gloria J. Roberts B ’00
Pamela S. B ’85 &
Carlos J. Rodriguez B ’85
Mr. & Mrs. Alan G. Schwartz
Caroline M. Simko B ’90
Kathleen A. T ’91, B ’00 &
Andrew S. Thomas B ’00

three classes graduate
The Duke Goethe Executive MBA
program graduated its first class.
Thirty-one students in the inaugural
class completed their capstone simulation
experience in Frankfurt in
March. “The completion of this first
class is a remarkable achievement”
said John Gallagher, associate dean for
executive MBA programs.
A total of twenty-nine members of
the Duke Goethe MBA Class of 2007
flew to Durham to attend graduation
at Duke, where they joined the Cross
Continent program for a combined
graduation ceremony on May 12.
Following their graduation at Duke,
they participated in the first graduation
ceremony of the new Goethe
Business School at Frankfurt
University on June 16.
Joerg Schirrmacher presented the
class gift of $20,000, unanimously
decided upon by all class members
who contributed equally. The gift will
be used to support a team room in the
new House of Finance that is under
construction at the University of
Frankfurt.
The Duke MBA—Cross Continent
Class of 2007 had 117 members representing
twenty-three countries who
graduated on May 12 in the combined
program with the Duke Goethe class.
Sir Eldon Griffiths, national patron,
World Affairs Councils of America,
delivered the commencement address
to both classes. The Cross Continent
class gift of $150,000 was presented
by Rob McLaughlin and Vince Hsieh. The
gift included $117,100 in pledges and
$32,900 in matching gifts for the
annual fund.
The Duke MBA—Daytime program
graduated 417 students representing
forty-five countries in the May 12
commencement ceremony. Mike
Krzyzewski, head coach of the Duke
Men’s Basketball team, was the featured
speaker. Sterling Ingui, Laura
Bayzle, and David Hirsch, members of
the class gift committee, presented a
check totaling $247,484, including
$188,484 in pledges and $59,000 in
matching gifts, to support Fuqua’s
annual fund.
briefs {
summer 2007 9
left: GRADUATES OF
THE DUKE GOETHE
PROGRAM
right: DAYTIME
GRADUATES

TO VIEW PICTURES
OF THE WEEKEND,
VISIT THE REUNION
WEB SITE AT
WWW.FUQUA.DUKE.
EDU/REUNION
learning through leading
“The Duke MBA Games has been a
vital part of my learning and growing
experience here,” says Julie Fullerton,
class of 2007 and one of the co-chairs
for The Duke MBA Games. “Cesar
Urbina, my co-chair, and I had responsibility
for such a large organization,
and to also work to make it better
than the year before.”
The Duke MBA Games has grown
immensely popular over the years,
hosting this year’s nineteenth MBA
Games. The mission is two fold: first, to
be a supporter of Special Olympics
North Carolina; and second, to promote
interactions between MBA students
and Special Olympics athletes. Duke
MBA Games, along with a host of
other student-led conferences and
events, are testing the leadership
styles of students responsible for
motivating large organizations.
“In the past, my leadership style was
to be more of a visionary leader, less of
a structured, detail-oriented individual,”
remarks Kyle Stanzel, class of
2007. Stanzel led the second annual
Footprints Conference, which hosted
over 300 attendees this year. The conference
celebrates the foot prints
organizations are making on the
world. “I like to create ideas, and then
10 exchange
reunions 2007
This past April, more than 600 alumni and their families returned to Durham to
celebrate Fuqua Reunions 2007. Alumni from the classes of 2006, 2002, 1997,
1992, 1987, 1982, and 1977 kicked off the weekend festivities in style on Friday
evening, reuniting over cocktails and dinner at the Washington Duke Inn. The weekend
continued Saturday afternoon as everyone gathered back on campus to enjoy some
of North Carolina’s finest barbeque and bluegrass music. Then, the entire Fuqua
community gathered on Saturday evening for Celebrate Fuqua, the school’s largest
party of the year, where everyone showed off their best dance moves and placed
friendly wagers at the gambling tables. On Sunday morning over a wonderful brunch
at the Washington Duke Inn, people said their adieus and promised to keep in touch.
To the classes of 2007, 2003, 1998, 1993, 1988, 1983, 1978, and 1973—we
look forward to your return to Durham to help us Celebrate Fuqua on May 2–4, 2008.
move on to the next project. Managing
the conference taught me due diligence,”
says Stanzel. “I had to balance
both being a visionary leader and
working through the details.”
Sarah Fulford, executive director for
the Leadership Experience Conference,
had the opposite challenge while organizing
a conference. “My strength is in
the details, and this year I wanted to
play with strategy. It was hard to step
back and not be consumed with the
details.” Fulford talks about her personal
goal of wanting to be hands off,
and working to motivate her team to
achieve their unified vision.
“I had to let my team fail at some
points in order for them to learn,”
says Fulford, as she continued discussing
the challenges she faced.
“And when I stepped back, things
went extremely well.”
Student-led events and conferences
are intrinsic to The Duke MBA experience.
Not only do these events showcase
the idea of practicing collaborative leadership
to achieve results, but they provide
student leaders with skills which they
will carry with them post graduation.
“The Duke MBA Games taught me a
lot about managing in stressful situations,”
said Urbina. “Working with peers
and influencing them is an incredibly
important skill to have—particularly
when you are all working hard, and the
only difference is you have a higher title
than the rest of the team.”
Stanzel talked at length about learning
and putting into practice effective
management (a constant checkup on
goals) versus performance evaluation
(a snapshot of an individual’s performance)
when managing his team. Fulford
discovered the hard task of motivating
her team to achieve results without
being a micromanager. Urbina pushed
himself out of his comfort zone in order
to stop being diplomatic and to be more
direct in terms of the results he needed
from his peers.
Fullerton learned to worry less about
what team members’ reactions would
be to the vision she put forth. “At the
end of the day, The Duke MBA Games
gave me an opportunity to learn valuable
leadership skills I would not have
learned in a classroom, including the
ability to accomplish your year-long
goals and use your skills of influence,”
she said. “It is the most important thing
I have done at Duke.”
—Mita Mallick, The Duke MBA—Daytime
Class of 2007

planned giving
society
The Fuqua School of Business has
announced the formation of a
planned giving society. Working in
collaboration with Duke’s Office of
Planned Giving, the Fuqua Heritage
Society is being established to honor
alumni and friends who have made
provisions for Fuqua in their wills or
through another type of planned gift.
Dan Richards, a 1980 Fuqua graduate
in Memphis, Tennessee, has been asked
to chair this effort. While this is a new
society at the business school, planned
giving to Duke is not. It is the foundation
upon which the university is built.
It is no exaggeration to say that Duke
is Duke because James Buchanan Duke
had foresight and great expectations
for the college he cared for, as well as a
keen sense of how to manage his assets
to ensure his family’s financial well
being. He defined his bequest during
his lifetime, and it produced what he
had planned.
While few Duke supporters can
approach the magnitude of that
bequest, the idea that a future gift can
benefit the University and the donor
is every bit as correct as it was in
1924. In fact, under current tax laws,
Mr. Duke’s method of giving may be
even more beneficial to a donor today.
There is no question that such giving
is as vital to the University’s future as
it was in its past.
“As a graduate of what was then
known as Duke’s Graduate School of
Business Administration, I have
watched Fuqua grow to amazing
heights at a tremendous pace,”
explains Richards. “I recently completed
a second term on the Alumni
Council and remain a proud supporter
of the school. As my wife and I review
our estate plans, it is only natural to
financial aid initiative
The Fuqua School of Business continues its participation in Duke’s current Financial
Aid Initiative (FAI). Duke is working to raise $300 million in endowed scholarship
support, focusing most of the attention on need-base aid for undergraduates. At the
beginning of this effort, Duke received $100 million in commitments from a group of
donors to use as matching funds for others interested in supporting the drive.
Duke allocated $2.5 million of matching funds to Fuqua as it strives to increase
its pool of scholarship aid, a program that focuses on merit-base awards. Fuqua
originally began with a $4 million goal and now sits at $6.5 million raised. Under
the leadership of Jack Bovender, Fuqua’s representative on the FAI Committee and a
member of the Board of Visitors, all of Fuqua’s matching money has been used and
support continues to come. Bovender graduated from Duke in 1967 and received a
master of health administration (MHA) in 1969.
Fuqua received the second of two $1 million commitments, joining the one made
by Jack and Barbara Bovender at the beginning of the campaign, from The Bill &
Melinda Gates Foundation in Seattle, Washington. Melinda French Gates graduated
from Duke in 1986 and Fuqua in 1987. The endowment, established in 2007, will be
known as the Fuqua Scholarship Fund.
Jim Davis of Miami, Florida, a 1945 Duke graduate and long-time supporter of
the business school, pledged $250,000 to establish The Claudia B. Davis
Scholarship Fund at Fuqua. Matched by the FAI, this scholarship is in support of The
Center for the Advancement of Social Entrepreneurship.
Cathey Massey of Atlanta, Georgia, a 1971 Duke graduate and member of The
Center for Entrepreneurship and Innovation Task Force at Fuqua, committed
$350,000 in support of the program. That pledge includes $250,000 to establish
The Catherine E. Massey Scholarship Fund. Matched by the FAI, the award will be
given to a female student interested in becoming an entrepreneur.
Doug Bratton ’84 of Fort Worth, Texas, committed $100,000 to an existing scholarship
he established at Fuqua in 1995. Matched by the FAI, The Douglas K. Bratton
Scholarship Fund is provided to students who are residents of North Carolina.
Watts and Carol Hamrick of Charlotte, North Carolina, pledged $100,000, an
amount that will be matched by the FAI. Watts graduated from Duke in 1981 and
Fuqua in 1982. The endowment will be known as The Carol and Watts Hamrick
Scholarship Fund.
Thomas Fousse ’94 of London, England, committed $100,000 to the effort.
Matched by the FAI, the endowment will be listed as The Marsland Fousse Family
Global Scholarship Fund.
Georgiana and Ira Platt of Westport, Connecticut, both graduates of Fuqua in
1991, committed $100,000. The endowment will be known as The Georgiana and
Ira Platt Scholarship Fund.
us that Fuqua should be included. I
have gained a tremendous amount
from my educational experience at
Duke, and I believe it is important to
give back to the school to strengthen
Fuqua’s long-term success.”
briefs {
For more information on supporting the
Financial Aid Initiative, the new classroom
and library addition, or the Fuqua Heritage
Society, please contact Tom Kosempa,
director of major gifts, at 919-660-3799 or
tkosempa@duke.edu.
summer 2007 11

the essential principles of trust and integrity
On June 1, Dean Douglas T. Breeden
announced that appeals by twentyfour
students accused of violating
Fuqua’s Honor Code were denied. The
announcement brought to a close the
penalty phase of the most serious
cheating incident in Fuqua’s history.
The Honor Code violations drew
wide media coverage, extending to
outlets around the world. Dean
Douglas T. Breeden has noted that
press accounts on certain aspects of
this case contained a number of inaccuracies.
Federal privacy laws prevent
Fuqua from rebutting specific statements
in the media. However, Dean
Breeden added that those who have
received the harshest penalties
(expulsion or suspension) come from
three continents and represent both
foreign and domestic students.
In a message to the Fuqua community,
Dean Breeden said, “This has
been a regrettable time at Fuqua, but
it also provides us with a valuable
reminder that our Honor Code is what
unites us across the diverse nationalities
and cultures that we welcome
here at Fuqua. The Honor Code is the
embodiment of the essential principles
of trust and integrity that are the
essence of our collaborative and distinctive
environment. We will always
cherish and protect those principles.”
Dean Breeden recognized the continuing
need for Fuqua to be proactive
in working with alumni, corporate
recruiters, and current and prospective
students to address any lingering
concerns over the Honor Code violations.
That process is expected to continue
through the coming months.
12 exchange
Dean Breeden added, “I would also
say that we are pleased by the support
of leaders of many other top universities
in our handling of these issues and
by the good that they are trying to do in
their schools in discussing and learning
from our experience at Duke.”
Going forward, Fuqua will review its
Honor Code to ascertain whether
changes are warranted. “The violations
of this spring were a test of sorts for
the Honor Code,” said Bill Boulding,
associate dean of the Daytime MBA
program. “While the principles that
form the foundation of the Honor Code
are constant, we’re obligated to review
all of our policies and procedures on an
ongoing basis. Because students and
faculty jointly own the Honor Code, I
expect both groups to deeply engage in
this review.”
Boulding added that the review
process would include a look at how
Fuqua makes its incoming students
aware of the Honor Code’s requirements:
“The Honor Code is an essential
part of the orientation process
for new students and the overall academic
experience. We want to always
be sure that all our students are
aware of the Honor Code and if there
are new ways to ensure that the
requirements of the Honor Code are
communicated effectively, we want to
explore those options.”
Fuqua has received statements of
support for its handling of the Honor
Code violations from business leaders,
journalists, and academics.
Donald and Thomas McCabe of
Rutgers University have analyzed
cheating among college students in
recent years. Writing in The Bergen
(New Jersey) Record in the wake of the
Honor Code violations, they noted
that the incident “will serve only to
underscore how serious Duke is about
student integrity and communicate
the message that student dishonesty
can have significant consequences.”
The two professors “applaud Duke
for its willingness to endure the current
media attention, and we are confident
it is the best choice in the long
run. It is also a good example for
other business schools, especially
those which might avoid similar publicity
by sweeping cheating incidents
under the rug. This may prevent the
media from learning about such problems,
but students will quickly conclude
there are no real consequences
for dishonesty on campus—and perhaps
not in the real world either.”
Fuqua’s alumni has made its feelings
known through e-mails and phone calls
to the school, expressing disappointment
that the cheating took place and
supporting the difficult decisions of
denying the appeals.
“We heard from many in our alumni
community who felt strongly about
the Honor Code violations,” said
Elizabeth Hogan, Fuqua’s director of
alumni relations. “Our alumni value
their Fuqua experiences and feel a
strong connection to the school. They
don’t want to see Fuqua’s image tarnished
in any way. Perhaps most
importantly, the feedback we received
after the penalties were upheld was
overwhelmingly positive, and people
were pleased to see the integrity of
the Honor Code itself preserved.”

Fuqua’s Career Management Center
has fielded questions from a number
of recruiters regarding some of the
facts surrounding the case, and many
have voiced their support. The Center
contacted all employers of Fuqua
interns to let them know how they
could verify the status of any interns
they had hired.
“We have longstanding relationships
with our valued employers, and
they’re very aware that this incident
is an anomaly,” said Sheryle Dirks,
assistant dean and director of Fuqua’s
Career Management Center. “They
certainly want to see that Fuqua is
serious about instilling honor and
integrity in its students, and I think
they feel reassured on that point.”
Likewise, some prospective students
and their parents have also contacted
Fuqua with questions about the
cheating as they make important decisions
about their academic futures.
“A school’s reputation is an important
consideration as prospective students
evaluate their options,” added
Liz Riley-Hargrove, assistant dean of
daytime MBA program. “We think
Fuqua’s actions throughout these last
few months will serve to put to rest
any lingering concerns about the
value we place on honesty and honor.”
—Christian Privett
briefs {
FUQUA’S ALUMNI COMMUNITY WAS QUICK TO EXPRESS A WIDE RANGE OF FEELINGS
ABOUT THE HONOR CODE VIOLATIONS. SEVERAL HUNDRED RESPONSES WERE SENT
TO FUQUA AFTER DEAN BREEDEN’S E-MAIL UPDATES ON THE DEVELOPING SITUATION.
“I commend you and the rest of the faculty for having the courage and fortitude to
act in the best interest of the school and its reputation despite the inevitable flood
of negative publicity surrounding your decision. As I read about continued moral
and ethical lapses in business, I think that your actions are instructive not only to
Fuqua students but to others as well. I, for one, have never been more proud to be
a Fuqua alum.” —Gregory Friedman, ’83
“I am a class of ’85 student now living in Auckland, New Zealand. Given my distance
from Fuqua, I have not read any press accounts of this matter, so I appreciate your
thorough and thoughtful communication. Organizations must ‘walk the walk,’ not just
‘talk the talk.’ I have always been proud of my Fuqua association, but never more than
now. Thank you and the other members of the Judicial Board for upholding the
integrity of the institution we all hold so dear.” —Chris Hollister, ’85
“I have been following this case closely and wanted to let you and the Fuqua community
know that I am very proud of the way the school has handled this situation….I don’t
know if there is only one ‘correct’ way to handle the issue of an ethics violation in a
school, but this sure sounds like the right way to me.” —Andrew Simmons, ’86
“Thank you for your efforts to disclose fully to alumni the regrettable circumstances
surrounding this outcome. I am deeply saddened to hear that the cheating was so
widespread amongst the first-year class. I, too, hope that the decision to uphold the
honor code will provide some reinforcement for these students that cheating is not
the way to achieve in our society. I recognize this process must have been difficult for
the faculty and student body, and I hope that some lessons were learned that might
prevent the repetition of this scenario.” —Anne Hooper, ’91
“In a blurred world, your leadership on this basic issue—that cheating is unacceptable—is
a beacon of sanity. Thank you for confronting the issue and protecting our
values. Thank you for handling it responsibly and compassionately.”
—John Courtney, ’98
“I am not pleased to read your report and to learn of the cheating episode at Fuqua. The
terms ‘responsibility and accountability’ clearly have diminished in importance over
time and somehow seem to have been lost within today’s society and culture, which is
both sad and most unfortunate. Therefore, as a member of the ‘old school’ that believes
honor, respect, and a true sense of personal responsibility for one’s actions should exist
as vital cornerstones of society and culture, I am pleased to know that your administration
has taken appropriate action in the situation…” —Kevin Karl, ’86
“As a member of a university faculty, I have faced honor code violations and know how
widespread and serious a problem they have become. Even more distressing is how
lax some administrations’ attitudes are toward enforcement of honor codes. It is gratifying
to see that Duke and Fuqua do not fall into this category.” —Mark Lauer, ’91
summer 2007 13

going green is good business
Duke Executive Education recently had the
opportunity to speak with Tim Profeta,
director of the Nicholas Institute for
Environmental Policy Solutions, regarding
climate change’s impact on business. The
dialogue in its entirety is available on
Exchange magazine’s Web site . Following
is an excerpt of that conversation.
What is the Nicholas Institute for
Environmental Policy Solutions?
We are the nation’s first bridging
organization for environmental matters
between the world of academia and
the decision makers in government,
corporate, and nonprofit board rooms.
We bring the expertise of our faculty
and researchers to the decision makers—but
what makes us different is we
have a dynamic interchange with the
policymaking process. We help broker
tough decisions, and we bring political
realities and information needs back to
our faculty so they can calibrate their
work to assist the “real world.”
One of the current hot topics is climate
change. How will climate change impact
the bottom line?
There are at least two ways to look at
this. One is on the risk side. There are
the risks of the costs to the economy of
global warming itself, from rising
food prices to the damages wrought
by storms, droughts, heat waves, and
other extreme events. There are also
risks to global corporations who are
constrained by U.S. reluctance from
going full bore into the development
of more efficient technologies and
products—but who will need to sell
those kinds of products on the
changing global market.
The other is the opportunity side.
This is where climate change can be
viewed as a global market signal.
Other economies are going low-carbon
14 exchange
for a number of reasons, either to
skip the building of old energy infrastructure,
or from fear of the impacts
of global warming, or many other
reasons. The way to get the edge in
this century is to develop and deploy
low-carbon solutions faster than your
competitor. That’s where the patents
are going to be, and that’s where the
markets are headed worldwide.
How is climate change impacting
business decisions?
Businesses that think really long
term, like the insurance industry, are
rethinking their policies, like where
they will provide coverage for storm and
flood damage. That industry was alarmed
about five or six years ago, when they
began to see “one hundred-year events”
happening every five years or less.
Other long-term interests, like utility
companies, are agitating for a U.S.
policy decision so they will know how
to invest in new power plants over the
next ten years. A lot of our capital
stock will be with us for a hundred
years, and it is hard to plan without a
clear indication from policymakers of
what the requirements will be.
Are you sensing a shift from government
regulation and policy driving environment
reform to business-led solutions?
It’s a false choice between businessled
and government-led. For example,
on climate change there is a role for
government to play in setting the signal
and shooting the starting gun by
saying “carbon pollution reduction
is now a tradable commodity. Go.”
Even major companies cannot go
totally out on their own with a business
strategy that Wall Street does
not recognize. With the quarterly
profit focus and the amount of
cross-business sharing required to
make this take off, it’s too much of a
risk for individuals.
I think what is different about this
issue is it will ultimately be handled
by our economists, financial firms,
traders, and not as much the environmental
branches of government. This
would be the first time to bring a market
solution to an environmental
problem on such a major scale. And
the scale of it is exactly what will help
businesses then drive the solutions
and profit from them—once the
expectations are clarified.
Given the dramatic business changes
underway in response to climate change,
where do you see companies ten years
from now?
We might see companies innovating
not only in their products, but in their
places of business—their offices and factories.
We might see more telecommuting.
We might see new supply chain growth in
unlikely places. We might see more interaction
with consumers from traditionally
paternalistic industries. For example,
customers could sell energy back to the
utility industry because they’re generating
electricity with their car or from
photovoltaic shingles on their house.
I think if we set the signal with a carbon
price, we will be surprised by the
pace and depth of innovation—just as
no one predicted the transformation of
computers and telecommunications
that happened over the course of a
decade. I remember using a typewriter
in college; I remember my first e-mail—
just within the last fifteen years. I never
imagined a Blackberry or a cell phone
that takes photographs. Imagine what
would happen with energy if we made a
national decision to limit carbon and
try something else.
—Kip Kelly

He goes by Jens-Thorsten Rauer on his
resume. But his friends call him Jetho
(pronounced “Yetto”). He was born in
Warstein and lived in Berlin, Frankfurt,
and Bremen before studying business
administration in London and San Diego,
and near Wiesbaden in lovely Rheingau.
Graduating from the European Business
School, he first consulted for IBM and
then managed the P&L for some major
outsourcing clients/contracts of IBM
before taking a two-year stint as senior
vice president of a major subsidery
Dresdner Bank. Now he is head of business
and corporate development of IBM
Germany where he balances his time
between work, his wife and daughter,
whom he calls his “two princesses” Ines
and Nele-Gioia, motorcycling, and a
little thing called The Duke Goethe
Executive MBA.
Exchange recently chatted with Jetho.
Why did you decide to pursue an MBA?
I simply felt it was the right time to
take a deep breath and dive into
advancing and growing my skills and
knowledge and to test it against my
experience. The educational background
I obtained prior to Duke and Goethe
allowed me to successfully excel in my
career up to this point, and it was an
excellent basis for this growth. Yet, I felt
it might not be sufficient to keep up with
the speed and required capabilities for
further and beneficial progression. I
believe that I have made the most of
my opportunities and am convinced that
an executive MBA is a further step in the
right direction.
Why did you choose the Duke Goethe
program?
It was after some intense market
analysis of programs that are internationally
perceived the best and based on
an expected return of investment (time,
effort, and money), that I decided on the
Duke Goethe Executive MBA.
student profile}
Jens-Thorsten Rauer
Duke Goethe Executive MBA
Class of 2008
Why?
Well, largely because of its globally
acknowledged and recognized high
quality faculty, staff, and education. Also,
because of the program’s specific format
and content, which allows me to continue
with my career while at the same time
offering the chance to perfectly prepare
myself conceptually and methodologically
for next steps. Let me add that immediately
after having started with the program, I
learned how intriguing and satisfying the
learning experience can be when the
right people are around you. The high
quality of students and the richness of
the respective backgrounds substantially
add to the value of the program—which
in turn underlines the outstanding
positioning of the Duke Goethe Executive
MBA program.
How do you think an MBA can enhance
your career?
Based on the curriculum, I acquire
further relevant knowledge of and insight
in important management functions and
disciplines, such as managerial economics
or advanced corporate finance, which in
turn increases my effectiveness and
grows my capabilities. This is facilitated
through substantiating and testing my
professional insight in an intense and
challenging environment during case
studies and group work when teaming
up with experienced fellow students
sharing the same spirit.
What are your job responsibilities?
It is now one year, or four quarters,
that I am accountable for the IBM Global
Technology Services business unit for
German clients of the financial services
industry. This is a 100+ mio Euro business
with yearly signings above 150 mio Euro,
which represents a significant share of
IBM Germany’s overall business.
How would you describe the Duke Goethe
program?
It is a perfect way to enhance your
business management and interpersonal
capabilities and to prepare for “the next
step.” It is an outstanding learning experience
with thriving and thrilling peers and
faculty, and it is not an interruption—it is a
multiplexer and intensifier. To some it may
even be a booster....
Tell me about yourself.
Oh...that I find a difficult thing to do!
I think I am a nice guy...at least sometimes.
And even though it might seem to others
who know me very well that I constantly
carry some discontent around with me,
(which basically might be a sign that I
again identified something that I want to
change or what needs to be changed), I
enjoy almost every moment (some after it
passed...), and I like to celebrate successes
(who doesn’t). I am really excited about
the future and what it will bring—I expect
so much to happen and there is so much
to be established. I know that I am
extremely blessed with the strong backing
I receive from my family and friends.
That’s why—with all the efforts to
progress—I am committed to maintaining
a balanced private life with my family, as
well as a high level of personal integrity,
social awareness, and responsibility. And
that’s why and how I prioritize my agenda
and undertakings.
—Lynsi Derouin-Steffen
summer 2007 15

16 exchange
By Beth McNichol

Doug Breeden is known for many things, but in
Leavenworth, Indiana, the town of 300 in which he grew
up, he is lauded for his singing voice. That is, at least by the
eighty-year-old choir director of Leavenworth Presbyterian
Church, a woman Breeden also calls “Mom.” That’s right,
Doug Breeden: a captain of financial markets and entrepreneurship,
renowned researcher, barometer of world
economies, and phenomenally successful outgoing Dean
of Duke’s Fuqua School of Business, still sings in the
church’s annual cantata when he returns home each
December. At age fifty-six.
Next time you have trouble getting your twelve-year-old
to finish his homework, tell him this story. Because when
a man like Breeden, who is as sought after by Duke MBA
alumni in Tokyo as Justin Timberlake is by the world’s pre-
“Twenty years from now, people will look back on
Doug’s time as Dean and remember it as the era when
Fuqua’s academic strength and power began its
global rise. And a lot of that history will be driven
by the men and women he brought here to work.”
—Gordon Soenksen
douglas t. breeden
positive world impact
pubescent population, still listens to his mother, it must be
a sure-fire strategy to becoming a global success.
Truth is, as Breeden steps down from the Dean’s post
this summer after six years of building Fuqua to new
heights, the footprints of his Leavenworth roots are
evident in many of his accomplishments, so deep that
there has been room for all of Duke’s Fuqua community to
step inside them. To learn, as Breeden already understood,
that those Midwestern, simplistic-but-powerful ideas like
a can-do attitude, creative know-how, and helping others
can be translated into business acumen and exported to
mint a Duke MBA brand powered by organic leadership,
top-flight research and entrepreneurship, and the effervescent
guidance of positive world impact.
Something to sing about, indeed.
summer 2007 17

“Doug has led as an entrepreneur,” said Gordon
Soenksen, associate dean for development and alumni relations
at Fuqua. “He is continually looking for new ideas,
always chasing kaizen, that Japanese term for continuous
innovation and improvement. Twenty years from now, people
will look back on Doug’s time as Dean and remember it
as the era when Fuqua’s academic strength and power
began its global rise. And a lot of that history will be driven
by the men and women he brought here to work.”
It’s no secret that Breeden’s most important task when
he returned to Duke in 2001, where he had taught finance
from 1985 to 1992, was to increase both the size and depth
of the business school’s faculty. And he did, pushing the
number of tenure-track faculty from seventy-nine in
2001–2002 to ninety-six this year. He not only hooked
them, but he lured them from the best and brightest of
places: Wharton, Stanford, MIT, and Carnegie Mellon, to
name a few.
“The pitch for me has been the school’s strategy, and the
same reason I decided to become Dean here and not at
other schools that approached me,” Breeden said. “Duke
has a lot of students and faculty who want to change the
world, and I like that. We do it with both research and
teaching, and we don’t want to choose between the two.”
Breeden has been so successful at increasing the quality
of Fuqua’s faculty that he has found himself on the other
end of the professor chase these last couple of years, with
his faculty now the target of attempted poachings by those
same big, bright places from which he became accustomed
to plucking people for Duke.
“I take it as a compliment,” he said with a smile. “This is
a problem you want to have.”
18 exchange
“Duke has a lot of students and faculty who want to
change the world, and I like that. We do it with both
research and teaching, and we don’t want to choose
between the two.” —Dean Breeden
Dean Breeden and J.B. Fuqua at the Duke MBA
International Retreat in Geneva, 2003
Breeden’s ability to rapidly increase Fuqua’s faculty
strength also shows his fidelity to and understanding of
academia said S. “Vish” Viswanathan, the Robert L.
Dickens Professor of Finance at Fuqua, and a man whom
Breeden helped recruit to Duke in the mid-1980s when he
was a senior finance professor.
“Doug is very unusual in that he was first a very successful
academic, he built a finance faculty group at Fuqua,
then co-founded and successfully ran the money-management
firm, Smith Breeden, and then he came back (to
Duke),” says Viswanathan. ”But he's always been true to
the basics, he's always valued academic excellence. What
Doug always emphasized was that the quality of the faculty
had to be top 10. Not just in one area or two areas,
but across the board.”
the foundation of a great business school
Breeden knew a little bit about the influence of an exceptional
teaching and research squadron among the world’s
greatest universities. Everywhere he studied as a young
economics and finance student in the late 1960s through
the 1970s, future Nobel prize-winning teachers seemed to
fall from the sky and land in his lap: Myron Scholes and
Robert Merton, Franco Modigliani, Robert Engle, William
Sharpe, and Joseph Stiglitz. These were the sorts of experi-

ences that made him confess his love for academic
research, the kind of people who made him realize the
importance of the work—and later, as Fuqua Dean, the significance
of institutions who hired the kind of men and
women who held in their intellect the potential to change
the world.
And so Fuqua now has bright minds like Wes Cohen
whose study of how patent policy and intellectual property
rights encourage research is particularly relevant among
pharmaceutical companies in the Raleigh-Durham area.
And husband-wife duo Gavan Fitzsimons and Tanya
Chartrand who delved into the unusual science of nagging,
yielding information on compliance behaviour that sheds
light on both roommates and coworkers. And Dan Ariely,
who does fundamental research in behavioural economics.
According to the Financial Times, Fuqua faculty were
ranked seventh in the world in research in 2007.
In turn, those minds have helped Breeden achieve
another goal at Fuqua that he believes is pivotal not just for
the success of a business school, but for the health of markets
and economies across the world: the growth of the doctoral
program. Not only has the number of PhD students
grown from forty-seven to more than eighty since 2001, but
Duke’s central administration reported that Fuqua students
were at the top of the list in a review of campus-wide
doctoral students’ placements at top universities.
“Great faculty attracts other great faculty, which attracts
great students and attracts those people who want to hire
from the school,” said Gerald Hassell, president of The
Bank of New York and chairman of Fuqua’s Board of
Visitors. “That’s the foundation of a great business school.”
For Breeden, the doctoral program is a chance to teach
Fuqua minds all those lessons that MBA students don’t
have time to learn in their two-year stints, an especially
exciting concept to a man for whom research serves to
inspire innovation.
“You’re really trying to expand the sphere of knowledge,
trying to break out of that ball,” Breeden said. “Faculty
always try to teach PhD students everything they know, and
then have them, through their dissertation and subsequent
research, develop new things that none of us know. Doctoral
students push us all to think our highest thoughts. That’s
what the greatest universities in the world do.”
Breeden, who is well-known for his oft-cited 1979
research on intertemporal asset pricing and consumption,
will himself return to teaching and research this fall at
Fuqua—satisfying an itch that, for great minds, can only be
relieved with the tonic of spending hours thinking deeply
through a new question. That’s a luxury that Breeden
hasn’t had as Dean. But he has plenty of ideas on tap,
including revisiting macroeconomics and asset pricing.
Colleagues say his mind is always working, so much so
that even Breeden admits that he and wife, Josie, sometimes
spend a good deal of their time talking about new
ideas. “Every day, he’s coming up with a new question that
could very easily have great impact,” said Soenksen, who
adds that he regularly receives e-mails from Breeden that
were typed at 2 a.m.
“He's always valued academic excellence. What Doug
always emphasized was that the quality of the faculty
had to be top 10. Not just in one area or two areas, but
across the board.” —S. “Vish” Viswanathan
summer 2007 19

uilt to last
In Indiana, the Breeden family were known as entrepreneurs—and
as leaders—so it comes as no surprise that their
son would take on those characteristics, as well. They built
a chicken business and restaurants, and Breeden’s father,
Russell, was mayor of Leavenworth for twenty years, as
well as a member of the Indiana House of Representatives.
“We were always people who ran the largest businesses
and employed people while doing great things for the
community,” Breeden said of his family. “I suppose that
it was in my blood to be a leader.”
Of course, there was something else, another reason why
Breeden founded a money-management firm and owns
almost ten businesses, including three banks, a golf course,
two restaurants, and an inn: “I’ve always been a little bit
uncomfortable having a boss who could fire me,” he joked.
“If I own the place, that doesn’t happen.”
20 exchange
“We’re likely to go on for centuries, and over the
centuries, we can build a network, and we can
touch almost every part of the globe.” —Dean Breeden
Dean Breeden presents a Duke basketball to Board of Visitors member
Malvinder Singh and wife, Japna, in Mumbai.
Mainly, though, Breeden liked the feeling of developing
new products or services, employing others, and contributing
to the economy in a positive way. That spirit of entrepreneurship
and leadership was one he felt Duke must elevate
to be a major business school. To that end, Breeden
captained the start of the Center for the Advancement of
Social Entrepreneurship in 2001, the Fuqua/Coach K
Center of Leadership and Ethics in 2002, and the Center
for Entrepreneurship and Innovation at Fuqua in 2005,
which collaborates with the engineering, medical, and law
schools at Duke, among others, to help facilitate the transfer
of knowledge to other entities—especially businesses in
the technology-rich Research Triangle Park.
Breeden’s own experience as an entrepreneur and businessman
made his time as Dean more successful. One of his
staple business strategies comes from James Collins’ and
Jerry Porras’ book, Built to Last: “Try a lot of stuff, and see what
Dean Breeden is miked for an MBN TV interview in Seoul.

works.” As Breeden notes, the simple management idea has
worked well at Fuqua, particularly when he decided to turn
one idea that was not creating enough revenue—the Fuqua
School of Business Europe—into an alliance with the
University of Frankfurt. What rose in its place was the dualdegree
Duke Goethe Executive MBA program.
“We tried something that didn’t work, but that didn’t
mean we needed to give up on Germany,” Breeden said.
Duke Goethe is just one of a growing handful of global
alliances Fuqua has pursued under Breeden’s watch, with
another dual-degree program at Seoul National University
in Korea, and a partnership with the Indian Institute of
Management-Ahmedabad. More global alliances such as
these likely are on the way for Fuqua, Breeden said, which
will add to the more than 1,200 alumni already working
abroad. That fact brings the Leavenworth kid in him, the
one who once thought no place on earth was better than
small-town Indiana, a great sense of pride.
“When this idea of reaching out and sending our students
to so many parts of the world first dawned on me, I felt like
a megalomaniac as I was laying out our strategy,” Breeden
said, laughing. “But Duke University is not going to be
bought out in ten years or even fifty years. We’re likely to go
on for centuries, and over the centuries, we can build a network,
and we can touch almost every part of the globe.”
summer 2007 21
left photo: Face
painting at a Duke
basketball game
right photo (l to r):
Douglas Breeden,
former Duke
president Nannerl
Keohane, Coach
Mike Krzyzewski, and
Blair Sheppard at
the Fuqua/Coach K
Leadership
Conference

22 exchange
Highlights of
Douglas T. Breeden’s
Deanship (2001–2007)
faculty increased from 79 to 96 with improved
teaching/research depth
number of distinguished professorships increased
from 13 to 23, with 10 more in the process of being
funded
PhD student body grew from forty-seven to more
than eighty
sixth section was added to The Duke MBA—Daytime
program, increasing class size from 345 to 410
three new centers were established: the Center for
Advancement of Social Entrepreneurship (CASE); the
Fuqua /Coach K Center of Leadership and Ethics (COLE);
and the Center for Entrepreneurship and Innovation
Health Sector Management (HSM) expanded to The Duke
MBA—Weekend Executive and Global Executive programs
multifaceted alliance, including a dual degree master of
management studies (MMS), was established with Seoul
National University
the Duke Goethe Executive MBA program was established
in partnership with Frankfurt University, and the
inaugural class graduated in 2007
annual fund increased from $1.3 million to $2.5 million
in the past five years
Fuqua endowment increased from $121 million to over
$200 million
necessary funding, including a generous personal gift
from the Breedens, was raised to begin construction on
the new classroom and library addition
Doug “Elvis” Breeden at
Celebrate Fuqua, 2004
bigger than just business
What Breeden likes best about that concept is the good that
Duke alumni will be doing in so many places, that notion of
positive world impact that he says is “what it’s all about to me.”
That’s not just lip service to Breeden and wife, Josie, who
have been monumentally instrumental to the life of Fuqua
in their passion for education. Whether beginning a children’s
library in Breeden’s hometown to advance young
dreams or donating $5 million of their own money to make
sure Fuqua’s dreams become reality; whether housing students
at the Fox Center during an ice storm or holding dance
lessons on campus to add spirit to academia, the Breedens
have led first by their hearts and by their examples.
“If you help people out, later on they’ll remember that
and help others out,” he said. “That’s what we believe.”
Something as simple as investing $10,000 in a DVD library
for the Fuqua community has brought untold smiles in return.
As Elizabeth Hogan, director of alumni relations, points out,
“Some faculty now joke that the Journal of Psychology has
been pushed off the shelves by Sleepless in Seattle.”
Sometimes, of course, making the world a better place
has meant dressing up as Elvis for students and alumni and
adding some hip-swivel to his choir-boy days. More importantly,
it has meant pursuing an entirely new pathway for
students to show off their own talents. Soon after he began
as Dean, Breeden laid the groundwork for the Center for the
Advancement of Social Entrepreneurship (CASE) at Fuqua,
where the public good meets private enterprise, where nonprofits
get MBA treatment.
CASE, as a dedicated center
to social entrepreneurship at
Fuqua, is one of the most
established among business
schools— and was an idea for
which students were thirsting.
It is now one of the admissions
office’s biggest selling points
on the road and has helped
earn Fuqua a top-ten ranking
among U.S. News & World
Report’s best graduate schools
in nonprofit management.

“People say, ‘Business schools should just stick to business,
to making money,’” Breeden said. “I know that’s not all students
want from life. Business schools are bigger than just
business by quite a bit.”
All of the new centers created under Dean Breeden
“reflect Doug’s desire to encourage our students…to want to
make a difference in the world as well as be good team
members,” said Professor Greg Dees, whom Dean Breeden
recruited from Stanford to found CASE in 2001. “For me,
Doug’s legacy is building on Team Fuqua, and adding that
stress on individual excellence and on ambition in the most
positive sense of that term.”
“Doug and Josie’s passion for Fuqua, for Duke, for their
family, for their community, for their work—for everything —is
palpable,” said Beth Anderson, former managing director and
lecturer with CASE, and who also came from Stanford. “It’s a
passion that translates into good things happening and good
things getting done.”
One thing is for certain: After six remarkable years as
Fuqua Dean, during which time he improved the financial and
academic shape of the school, Doug Breeden really shouldn’t
have to don that choir robe to make Mama Breeden proud.
But isn’t it nice to know he does?
Doug and Josie Breeden at the Breeden Hall construction site
summer 2007 23

24 exchange

y Laura Brinn & Mita Mallick ’07
the research
Advantage
The creation of new knowledge through original research is at
the heart of Duke’s mission. During Doug Breeden’s term as
Dean, Fuqua’s faculty has grown enormously in size and in
scope of research. In fact, Fuqua’s faculty members are among
the most active and creative business researchers in the
world, with Fuqua currently ranked fifth worldwide in research Fuqua students benefit
productivity according to the University of Texas at Dallas from faculty expertise
and research every day, as
School of Management’s annual ranking of business schools.
professors bring new
findings and insights into the classroom and use classroom discussions as a
source of ideas and inspiration for new research projects.
This issue of Exchange features the research programs of four Fuqua faculty
members: Mary Frances Luce, Leslie Marx, David Robinson, and Ashleigh
Rosette. In the spirit of celebration of Breeden’s tenure as Dean, the faculty
members profiled here were chosen from the cohort of faculty hired during his
Deanship.
Future issues of Exchange will include profiles of the research agendas and
accomplishments of Fuqua’s eight academic areas.
summer 2007 25

Leslie Marx Associate Professor of Economics
Research Focus: Anti-competitive behavior; contracting problems
Courses: Managerial Economics (The Duke MBA—Cross Continent);
Game Theory (PhD)
As an associate professor of economics, Leslie Marx focuses
her research on anti-competitive behavior and vertical
contracting between manufacturers and retailers. Her
research results serve as guidance for the government
and others on how to prevent, detect, and protect
against anti-competitive practices. “I study bad behavior
with the goal of learning when these behaviors should be a
concern or not, and to help design institutions that are
resistant to bad behavior,” says
Marx. Marx and other economists
play an important role in advising
the Department of Justice and
Federal Trade Commission, among
others, on topics related to the functioning
of the marketplace.
One of Marx’s primary interests is
the study of collusion. Collusion
occurs when competitors cooperate
in secret in order to try to circumvent
the normal functioning of the marketplace.
Marx recently authored the
chapter “Lessons for Competition
Policy from the Vitamins Cartel,” in the
book The Political Economy of Antitrust.
In their chapter Marx and co-authors,
William Kovacic, Robert C. Marshall,
and Matthew E. Raiff, examined collusion in the vitamin
industry during the 1990s, a period of widespread collusion
among vitamin manufacturers with the intent to maximize
prices for vitamins.
Marx and her co-authors were most interested in the sales
practices of several vitamin manufacturers that were investigated
by the federal government for price fixing and agreed
to discontinue their anti-competitive agreements. The period
immediately after a cartel is broken up, Marx points out, is a
prime opportunity for companies to implicitly continue the
agreements and practices they had ostensibly ended, without
having any actual agreement to do so.
Through their analysis of the vitamin industry, Marx
and her collaborators demonstrated that the number of
firms operating in a particular marketplace is a strong
26 exchange
predictor of whether or not they will continue to act in
tacit collusion after their scheme has been broken apart
by regulators. Fewer competitors makes it easier for
those companies to coordinate efforts to continue collusive
behaviors. The team found that in cases where there
were three or more competitors in a marketplace, prices
dropped to pre-conspiracy pricing rather quickly after the
end of collusive agreements. However, in markets with
fewer than three competitors, the firms often continued
to charge elevated prices, even after pledging to end
their collusive behaviors.
Their findings indicate that regulators should be
concerned about the effects of proposed mergers that
would reduce the number of competitors in a marketplace
to two.
In 2005–2006, Marx served a one-year appointment
as the chief economist of the Federal Communications
Commission. As chief economist, she worked at the
intersection of research and practice on a daily basis,
and serving as a liaison between the economists and
commissioners, helping to put economic research into
context for the commissioners. “Many of the situations
facing the FCC are general economic issues that are
applied to study telecom problems,” said Marx of her
work on topics including auction design, à la carte pricing
of cable television channels, and net neutrality.
Back at Duke, Marx is currently studying the mechanisms
of collusion at sealed-bid auctions, in which all of
the bidding parties determine their bids in advance and
submit them in a confidential manner. These auctions
remain open to many types of anti-competitive behavior,
she notes. “One bidder could go to another and say they
want to work together, and plan their bids together in
advance,” she says, “but neither bidder ever knows for sure
whether the other one kept their end of the agreement, or
bid something different.” Cases of collusion at sealed-bid
auctions should be detectable through careful review of
the bids, Marx says. Once collusion is detected, economists
and others can work with agencies that host large
auctions to create methods for detecting and preventing
collusive behaviors.
Marx and other academic economists play an important
role by helping to supplement the government’s efforts to
assess behaviors in the marketplace and recommend
actions that may help to curb such practices.

David Robinson Assistant Professor of Finance
Research Focus: Financial markets and corporate activities;
positive psychology and economic choices
Courses: Entrepreneurial Finance (The Duke MBA—Daytime);
Finance II and Selected Topics in Financial Economics (PhD)
David Robinson, assistant professor in finance, has been
lauded for his popular entrepreneurial finance course that
brings more than half of Duke’s Daytime MBA students into
his classroom. He has also distinguished himself through
his research program, which spans traditional and novel
areas of finance.
Robinson’s primary research focus is on understanding
how the boundaries of the firm—i.e., which activities take
place within a company versus outside the company—are
affected by conditions in financial markets. He seeks to
understand how the financial markets influence decisions
about activities best undertaken internally versus
those that should be handled by partners or suppliers.
For example, Robinson studies how capital market conditions
influence mergers and strategic alliances, and
how firms choose between mergers and alliances. He
worked with Fuqua colleague S. “Vish” Viswanathan and
Matthew Rhodes-Kropf of Columbia Graduate School of
Business, to show that in many cases merger activity is
driven by misvaluation of firms. Their research demonstrated
the relationship of misvaluation to many aspects
of mergers, including levels of merger activity, whether
firms are acquirers or targets, and the transaction medium
of a merger.
In his recent work, Robinson has found that firms with
high valuations tend to buy other firms with high valuations,
and firms with lower valuations buy other firms with
low valuations. Robinson likens the tendency of companies
to select merger targets with similar traits to the process of
“assortative matching” seen in other search processes, like
dating and marriage, where people tend to seek out and be
attracted to people with similar characteristics.
Robinson’s other primary research interest is in the
effect of positive psychology on economic choices, a field
he became interested in after teaching entrepreneurial
finance to MBA students. Positive psychology refers to the
study of happiness and what differentiates happy people
from others. Robinson and Duke colleague Manju Puri have
applied this area of psychology to finance in their recent
work to examine how optimism plays out in individuals’
decisions related to work and entrepreneurship. They
developed a new measure of optimism that compares
actuarial models of life expectancy with individuals’ own
assessments of how long they expect to live. Puri and
Robinson classify optimists as those people who report
expecting to live longer than the actuarial models predict.
They found that optimists are more likely to believe that
future economic conditions will improve and are more
likely than others to be self-employed and work longer
hours and more intensely. Optimists are also characterized
by the tendency to work longer hours, delay retirement, and
invest in individual stocks. However, optimism is not
always a good thing; Robinson and Puri found that people
who are overly optimistic sometimes tend to make bad economic
choices, perhaps because their expectations for the
future are not realistic. They caution that optimism, like
so many other things, is best in moderation.
Robinson’s research and teaching are woven together
by his leadership of Fuqua’s Global Academic Travel
Experience (GATE) course, through which he traveled to
Cuba with groups of students in
2004, 2005, and 2006. “There is not
really any meaningful discussion in
the U.S. of contemporary issues
related to the day-to-day life of ordinary
Cubans,” says Robinson.
In a change of pace from traditional
finance coursework, the
group researched the ways Cubans
support themselves, including the
black market, the gray market,
agriculture, and prostitution.
Learning how Cubans support
themselves on a day-to-day basis
provided Robinson and his students
with a fresh perspective on the economic
realities facing many people
around the world.
summer winter 2007 27
5

Ashleigh Shelby Rosette
Assistant Professor of Management
Research Focus: Negotiation; privilege and diversity in the workplace
Courses: Dynamics of Bargaining (Cross Continent and Duke
Goethe); Managerial Effectiveness (Daytime)
Ashleigh Shelby Rosette, who is an assistant professor of
management, focuses her research on two distinct areas.
She studies negotiations, specifically observing how people
use strategic behaviors (such as emotions and aggressive
offers), to negotiate the best deal for themselves, but her primary
research interests involve diversity in the workplace.
She notes that she is pleased to have struck a balance
between more traditional negotiation research and the
newer, less explored area of workplace diversity, and that
her varied interests have allowed her to remain immersed in
and continuously excited about her research.
Rosette’s diversity research centers on privilege and
leadership. “Privilege refers to the many unearned advantages
that accrue on the basis of any single group membership,”
Rosette explains. In her work, Rosette finds that
people with privilege frequently perceive their unearned
advantages as normal, and this presumption sometimes
prevents them from seeing the perspective of their
coworkers who do not have such privilege. Rosette offered
the following example, “A male executive may experience
camaraderie with his other male colleagues and not
understand a female colleague’s relative difficulty in
developing her own social network at work.”
Other hot diversity topics Rosette
is studying involve race and gender
issues within the context of leadership.
A recent project that she and
her colleagues have just completed
showed that racial bias exists in
business-leader prototypes, and this
bias can help explain more favorable
evaluations of white versus nonwhite
leaders. Rosette says that
when people think of leadership,
they usually think of the leader as
white and when this expectation is
not met, leadership evaluations can
be lower than when it is met.
Rosette and her Fuqua colleague
Sim Sitkin and PhD students Leigh
28 exchange
Tost and Morela Hernandez are examining how women in
top leadership positions develop rivalries with each other
that stem from tokenism and perceptions of threat and competition.
“Research on how top leaders view each other has
been contingent on the male paradigm,” says Rosette.
“However, more women are becoming top executives every
day, and we wanted to know how their experiences differed
from men’s experiences and how they differed from the
experiences of women at lower levels in the organization.”
A different project that Rosette and other colleagues
recently completed also looked at women in the executive
suite. However, instead of focusing on how women leaders
view each other, the project looked at how other people view
women leaders. “We found that women managers were
viewed as more effective than men managers on both developing
relationships and task competence only when they
were in top leadership positions and they had a proven,
demonstrated record of success,” says Rosette.
Rosette’s teaching in courses like Managerial
Effectiveness ties directly into her research. “Managerial
Effectiveness teaches first-year students about learning
how to manage diverse perspectives in the work place,”
says Rosette, discussing the Daytime MBA core course she
taught this past fall. “Ann Hopkins is one case in which
students get to see how differences prevail in an organization.”
Ann Hopkins, a famous Harvard Business
School case taught in many MBA programs, is about
sexual discrimination and involves a lawsuit brought by
a woman who was denied partnership at Price Waterhouse
(the court ruled in Hopkins’ favor). First-year Daytime
MBA students praised Rosette for the way in which she
managed the controversial Ann Hopkins case discussion. In
Rosette’s classroom, students were encouraged to think
about the many barriers organizations face as their
employees and managers become more diverse. This particular
case tends to generate a lively classroom discussion.
“It can be a difficult discussion to manage,” acknowledges
Rosette. “When discussing such emotionally
charged issues such as gender differences in the workplace,
the professor has to be careful so that she is perceived
as an unbiased facilitator and not as a biased advocate.”
“I’ll never get bored,” laughs Rosette when discussing her
teaching and research. “These are exciting topics to be
discussing in the classroom and to be researching.
Sometimes people will agree with me and at other times they
won’t, but they will be engaged with the topic, that’s for sure.”

Mary Frances Luce Professor of Marketing
Research focus: Health care marketing and decision making
Courses: Health Care Marketing (The Duke MBA—Daytime and
Weekend Executive); Business Management Principles and Tools
for Nephrologists in the 21st Century (Executive Education);
Seminar in Consumer Behavior (PhD)
A Fuqua graduate who returned to the marketing faculty
in 2003, Mary Frances Luce (PhD ’94), seeks to understand
the role of emotion in decision making, particularly
in situations involving high-stakes decisions and
health-related decisions.
Luce and her research collaborators are working to
bridge the gap between marketing knowledge and health
behaviors. “Many people in marketing are interested in
explaining the behavior of the consumer population,” Luce
said, “and marketing has lots of tools that get people to
adopt certain behaviors.” Luce notes that one challenge of
applying marketing thought and knowledge to health
behaviors is the intervening role that emotion can play in
health-related decisions.
“For example, it is quite common for a woman who has a
mammogram to receive false-positive test results,” says
Luce of her interest in the emotional responses women
have to the experience of false positive test results—since
for a time these women are forced to live and cope with the
possibility that they may have breast cancer. In many cases
women may be dissuaded from having regular mammograms
because of the fear of a possible cancer diagnosis
that is generated by a false positive test result, especially in
combination with the physical discomfort of the actual
mammogram process. On the other hand, says Luce, the
stress of a false positive test can be counterbalanced by
the feeling of vulnerability it elicits in many women
because “it makes them think, which can be motivating
toward testing and protective behavior.”
Luce and her colleague Barbara E. Kahn have found
that you can decrease these women’s levels of anxiety by
providing them with some simple coping behaviors and
interventions to help them manage the stress of false
positive test results.
Luce also explores the emotions that are generated by
the process of making decisions. This is joint work with
Fuqua colleagues Jim Bettman and John Payne. The team
has explored emotions that are generated by considering
the tradeoffs that are inherent in most decisions.
Of particular interest to Luce are situations that are
considered “low probability/high consequence.” Such
decisions are fundamentally different from general
consumer decisions, says Luce. In low probability/high
consequence decision situations, people will seek to
minimize and manage the emotions that result from the
decision process, which in turn will alter the person’s
decision. “In the past, researchers might argue people
would opt out of certain decisions because they were
conserving cognitive resources, a view that can make
consumers sound ‘lazy,’” she says, “but we’ve since
learned that sometimes people don’t do the right thing
because it is emotionally costly.”
For instance, in the domain of car purchases, people are
often willing to sacrifice safety for price when shopping for
a new car. “People want a safe car, but safety is not the only
factor they consider when shopping. In order to manage the
emotions that are brought about
when considering ‘what if’ scenarios
about the need for car safety, we
shoppers may use another consideration
to rule out choices,” Luce
says. For example, people may
exclude all cars over a certain price,
and then use safety as a key consideration
within their remaining purchase
options. In the process of trying
to manage their emotions, people
may initially rule out the safest
car by labeling it “too expensive,”
even if it is only slightly more
expensive than the car they ultimately
end up purchasing.
Luce’s work has led her to conclude
that people often want to simplify
their decision-making processes in
a way that minimizes the emotional costs of tradeoffs. “So
it is easier to use some sort of rule to eliminate a choice
from consideration than to go through the emotional exercise
of weighing the pros and cons of a particular option,”
she notes.
Luce cites Duke’s intellectual environment and focus on
interdisciplinary work as driving forces behind her decision
to return here. She also credits her students with providing
new perspectives and insights to her work. “There are great
synergies between the classroom and my research,” she
says. A resident from Duke University Medical Center
participates in Luce’s Duke MBA—Daytime health care
marketing course, and provides an interesting counterpoint
to discussions of health care marketing strategy and tactics.
“And in turn, I think it helps the resident to see the ways in
which health care marketers affect physicians,” says Luce.
Luce also teaches in The Duke MBA—Weekend
Executive program and finds that hearing about health
care managers’ problems first hand provides her with
new questions to explore in her research. “We have a broken
health care system, but it is not clear how to fix it,” she
says. “We have many opportunities to bring management
tools into the marketplace to help bring about positive
change. My teaching here at Duke helps me see tremendous
opportunities to bring research to bear on the practice of
health care communication and marketing.”
summer 2007 29

A butterfly flapping its wings in China can cause a tidal
wave in Hawaii. A girl hopscotch jumping in Canada can
cause an earthquake in Mexico. These are over-simplified
examples of the chaos theory. The key tenet behind the
chaos theory, however, is the complexity in the cause-andeffect
loop that is not as obvious to most people who see
these events as random while the able complexity theorists
can see the causal patterns. In other words, what seems
chaotic (random) to most people is recognizable by others
as patterns (deterministic).
I’m about to tell you three seemingly distinctive and
unrelated stories about the economics theory of Thomas
Malthus (1766–1834), chess, and bacteria politics and my
attempt is to shape the way you view important resources
such as oil going forward. This is my own chaos theory.
THE MALTHUSIAN VIEW
Cup your hand into the shape of a globe. Imagine a world
where every fifty-three years or so, the world splits in
half and one part of it disappears—therefore people on
that disappearing half must evacuate to the other half.
And another fifty-three years later, that half splits yet
again into two quarters, one of which disappears causing
30 exchange
by Pakpoom Vallisuta ’98
Pakpoom Vallisuta is chairman of investment
banking firm The Quant Group and is a member
of Fuqua’s Board of Visitors.
pakpoom@thequantgroup.com
THIS ARTICLE CAN BE FOUND IN ITS
ENTIRETY ON EXCHANGE ONLINE AT
WWW.FUQUA.DUKE.EDU/EXCHANGE
complexity economics
and oil price
further evacuation. So we end up with less space and
resources as the world becomes smaller.
Malthus was making a point about the doubling of population.
The world net population growth has averaged
about 1.3 percent a year. If you compound this percentage
for fifty-three years then it doubles. Now we have 6.5 billion
people on earth while fifty-three years ago we had 3.25
billion. Fifty-three years from now we will have 13 billion
people at this rate. The world doesn't get any bigger, so
effectively we will see more people bidding for the same
amount of resources.
CHESS
Around B.C. 3000, a king of the old Iran was called the Shah
of Persia. His advisor, The Grand Vizier, was very shrewd,
and he designed this board game with sixty-four black and
white checkered squares and painted pieces of carved wood
that resembled king, queen, rooks, knights, bishops, and
pawns. The Grand Vizier named this game “Shah Mat”
which in Persian means “death to the king.” The pronunciation
of Shah has changed somewhat to instead Tsar Mat,
Sheik Mat and so on, and chess players make their final kill
to close off the game by inciting the words “check mate.”

The Shah was extremely pleased with this ingenious
game and granted the Grand Vizier a wish for any reasonable
gift he so pleases. The Grand Vizier named his
price, and he wished to have one single grain of rice on the
first square, two grains on the second, four grains on the
third square, eight grains on the fourth, doubling in number
of grains as he moved to the next square until he reached
all of the sixty-four squares. The Shah responded that the
Grand Vizier was too humble in his request and that he
should at least request a mansion, a castle, or something
befitting this ingenious contraption. The Grand Vizier
stuck to his request.
So let’s work out the mathematics of the number of rice
grains. If you have the patience to continue doubling the
number of rice grains per the algorithm above, then you
will come to 9.2 million trillion grains of rice. That is 9.2
followed by 18 zeros. We don’t know how the Shah and the
Grand Vizier settled this contract, but I want to point out
that this “doubling effect” can quite quickly catch up and
even overtake your imagination.
BACTERIA POLITICS
Picture a bottle of coke full of this black sugared water.
Bacteria eats the sugared water as food and breeds by
doubling every minute. It takes 60 minutes for the
bacteria to finish the coke and fill the whole bottle with
bacteria. So the question is: at which minute is the bottle
half-full? The obvious answer is “at the 59th minute.”
Now imagine at the 59th minute some bacterium environmentalist
raises the alarming issue of this bacteria
coke bottle world running out of foods and space. The
prime minister of this bacteria population standing on
top of the pile of bacteria at the half-way point in the bottle
then downplays this by pointing out that there is as much
space available as there is bacteria. And one minute later,
lights out for every bacteria. This doubling effect is lethal.
It just happens that bacteria doubles its population every
one minute while the human population doubles every
fifty-three years.
FINITY AND SCARCITY
One of the key tenets behind economics is scarcity. More
of something means less of something else. More people,
less cows. More cows, less grass. More guns, less butter,
or more health care, less roads and so on.
Living matters consist in large parts of carbon and
hydrogen molecules. Plant and vegetables are carbonbased.
Humans eat these vegetables and inhale oxygen,
expend energy, and exhale carbon dioxide. The energy
that is not expended is stored as fat. Animals do the same.
Should humans leave those animals and plants to die by
themselves, they get trapped under the ground for a
couple of million years only to become hydrocarbons—
fossil fuels such as oil, gas, coal. Starch, fat, and oil are
just stored energy and all provide colorific values. So,
these molecules dance around changing pairs back and
forth, but they really never disappear—exchanging,
releasing, and storing differing forms of energy.
About thirty years ago, I found myself in remote southern
Thailand, and that was my first time seeing a village
petrol station. Unless somebody told me, I wouldn’t have
recognized that it was a petrol station. On the “pump” side
of the business, lay an array of old whiskey bottles filled
with sunset-orange liquid, gasoline, on a wooden table
just off a dusty road.
Villagers visit on motorcycles and get refills from these
bottles. And when it was time to pay for the gasoline,
some paid with cash and many others paid with eggs and
the next person paid with vegetables and another with
fruits. Something dawned on me: the most common
denominator next to money in today's society is probably
oil (if you’re sentimental about symbols of immortality,
then go ahead and choose gold). Just about everything in our
lives that we are exposed to, either directly or indirectly,
consumes oil. It is no wonder that this base effect has
had on just about the price of every commodity. So, this
Malthusian effect has a broader application.
One way of looking at this is to trace the history of oil,
and you will find that we have only become addicted to oil a
little over a hundred years ago. The first well, the Drake
well, was drilled on August 29, 1859.
In fact, long before the Drake well, oil had been oozing
out of subterranean springs in Ohio onto the Oil Creek.
However, there was no significant volume for oil application—oil
addiction—until around 1900: the British
Navy converted their coal-fired battleships to oil in
1902, and Ford’s Model T rolled out in 1908. At the same
time, we should not belittle oil up to that point because
it has done well enough to have enriched John D.
Rockefeller amongst others.
Oil prices have been low and flat up until 1973. In nominal
price, oil is 19.56 times higher today than it was in
1973. In 2005 money, the oil price is 4.43 times higher
than it was in 1973. This is a thirty-four year period. If you
think in terms of a fifty-three year period of doubling
world population and increasingly we have become an
oil-dependent population, the Malthusian effect and The
Hubbard’s Peak are both showing an emphatic trend.
summer 2007 31

Alumni Connections
ALUMNI DIRECTORY
Use the online alumni directory to reconnect
with old friends or find new ones. The
directory offers various methods to find
alumni, including searches by geographic
region, program of study, or field of work.
UPDATE YOUR CONTACT INFO
Have you moved or changed jobs? Update
your contact information so we can keep you
up-to-date on what’s going on at Fuqua and
in your hometown. To submit updates online
in the alumni directory:
919-660-7715
alumni-info@fuqua.duke.edu
LIFETIME DUKE E-MAIL
Take advantage of a lifetime e-mail
forwarding address so you won’t ever have
to notify friends and associates of a change
of e-mail. Visit the alumni Web Site for
more information, or contact
Erin Bartels, 919-660-7709
alumni-relations@fuqua.duke.edu
REUNIONS
Every five years each class is invited back for
a weekend of reconnecting and celebrating.
If you would like to get involved with the
planning for your reunion or contribute to
your class gift, please contact:
Samantha Fiske, 919-660-2907
alumni-relations@fuqua.duke.edu
REGIONAL CLUBS
Remember and relive Team Fuqua by joining
an alumni club in your area. Clubs are a
great way to network, socialize, and learn.
Visit the alumni Web site for a list of clubs.
For more information or to find the club
nearest to you, please contact:
Jolie Fernbach, 919-660-7695
alumni-relations@fuqua.duke.edu
ALUMNI LOGIN ID/PASSWORD
Online services and Web pages available
only to alumni are password protected. If
you need to be reminded of your login ID
and password, use the retrieval tools on
the alumni Web site or contact:
alumni-info@fuqua.duke.edu
Alumni Relations | 919-660-2915 | alumni-relations@fuqua.duke.edu | www.fuqua.duke.edu/alumni
70 exchange
Listed below are just a few of the services available and a snapshot of ways to reconnect with
Fuqua. Visit us on the Web at www.fuqua.duke.edu/alumni for a complete list of information.
CLASS NOTES
Just married? Promoted to CEO? Contact
your class correspondent (found in Class
Notes). If your class has no correspondent
and you want to volunteer, please contact:
Bonnie Gregory, 919-660-2915
alumni-relations@fuqua.duke.edu
ALUMNI COUNCIL
Alumni council is a group of alumni who
advise the development and alumni
relations team on how to improve alumni
services. New members may be nominated
each spring by classmates, friends, or themselves
for a three-year term and are required
to attend two on-campus meetings a year.
For more information:
919-660-2915
alumni-relations@fuqua.duke.edu
EXCHANGE MAGAZINE
Fuqua’s magazine is published quarterly
and mailed to all alumni. An archive of
past issues is available electronically on
the alumni Web site. Direct editorial
questions to:
Lynsi Derouin-Steffen, lynsi@duke.edu
LIBRARY SERVICES
Fuqua’s Ford Library is here for you. Visit the
e-library or come in to search collections.
Paula Robinson, 919-660-7942
robinson@mail.duke.edu
FUQUANET
FuquaNet is a monthly e-newsletter for
alumni. If you are not receiving the
newsletter, please e-mail:
alumni-info@fuqua.duke.edu.
For more information, or to pass on an
alumni story, contact:
Erin Bartels, 919-660-7709
alumni-relations@fuqua.duke.edu
ALUMNI CAREER SERVICES
The career management center (CMC) is
equipped to help you manage your career
goals. If you would like to schedule an
appointment, contact the CMC:
919-660-7810
cmc-info@fuqua.duke.edu
VOLUNTEERING
Admissions: Help Fuqua find more candidates.
If you are interested in promoting The
Duke MBA or evaluating candidates for
admission, contact the office of admissions:
919-660-7705
admission-info@fuqua.duke.edu
Speak/Host: Are you willing to speak, host,
or plan a club event? Contact your local
club or alumni relations:
alumni-relations@fuqua.duke.edu
Sponsor: Help enrich the Fuqua experience
for current students by encouraging your
company to be actively involved with
student organizations. Contact Fuqua’s
office of corporate relations:
919-660-7710, swindham@duke.edu
ANNUAL FUND
Support the school by giving to the Fuqua
Annual Fund. Gifts from alumni support
key initiatives that are vital for Fuqua to
remain a leading school of management
education. For ways to give, visit the
alumni Web site, or contact:
Rick Owen, 919-660-7717
rick.owen@duke.edu
DUKE ALUMNI ASSOCIATION
As a Fuqua graduate, you are also a member
of the Duke University Alumni Association
and are entitled to take advantage of all its
member benefits. Visit www.dukealumni.com
to learn more about all the great benefits
available to you.
AFFINITY GROUPS CONNECT
ALUMNI ONLINE
Integrated into the alumni directory,
affinity groups allow you to find and
connect with alumni who share your
social or professional interest, affiliation
or experience. Groups available include:
• Entrepreneurship
• Venture Capital
• Health Care
• Social Entrepreneurship
• Latin American Student Association
• Black & Latino MBA Organization
To join one of these groups,
simply visit the alumni Web site at
www.fuqua.duke.edu/alumni and update
your profile. To suggest a new group,
contact the alumni relations team at
alumni-relations@fuqua.duke.edu.

You can’t become a
world-class leadership
team overnight.
But in three days,
you’ll be a lot closer.
The Sixth Annual Fuqua School of Business and Coach K Leadership Conference
In today’s competitive, global marketplace, only strong, ethical businesses can thrive. Hear from more
than twenty distinguished leaders in business, sports, and government who lead successfully in their careers.
Learn more at ConferenceOnLeadership.com.
October 15-17, 2007
Distinguished speakers include: Mellody L. Hobson, President, Ariel Capital Management, LLC; Joe Hogan, CEO, GE Healthcare;
Tom Schmitt, President /CEO, FedEx Global Supply Chain Services; G. Kennedy Thompson, President/CEO, Wachovia Corporation;
Donna Orender, President, WNBA. Conference Hosted by the Fuqua/Coach K Center of Leadership & Ethics (COLE).
Sponsored by:
Building World-Class Leadership Teams

Duke University
THE FUQUA SCHOOL OF BUSINESS
Box 90118
Durham, NC 27708-0118
919-660-7715
www.fuqua.duke.edu
Address Service Requested
�������� ���� ���� ������� ����� ��������
�������� ��������
����� �����
���� ��������� ��� ��������� ����������
��� ��������� ���������� ������ ����
����� ������
��������� ��������� ������ �����
����� �����
��������� ��������� ��� ������ �������
���� ��� �� ������� ���
���� ����������� �������� ����� �� ��������
������� ������
��������� ��� ���� ��� ���
���� �����
���� ����
���� ������
������ ���� ��������� ��� ���� ��
��������� ����������� ���������
������������������� ���������
������������������
��� ���������� ��������� ��������� ����� �� ���� ����������
�� �� ��������� ��� ���������� ������� ������� �� ������� ���
�������� ������ ������ ������ ������ ���� ��� ���������� ������� ��
�������� ��� ����� ������� ��������� ���������� ��� ������ ���������
�������� �� �������� ������ ���������� ������� �� �����������
�� ������� ������ � ���� �� ���������� ��������� ��������� ����
���������� ������������� �������� ��������� ��������� ����������
��� ���������� ����� ��������� ���������� ������� ����������� ���
���������� ��� ������ ���������� � ��� ��� �������� �����������
����������� �� ������������ ��� ��� ����������� �� ������ ���� �����
�� ������� ���� ��������� ����������
���� ������� ���� ������� ����������� ��������� ����������
������������� ����� ��� ��������� �������� �������� �� ���� ��
�������� ����������� ���� ��� ����� ������ �� �������� ��� ����
������ �� ���� ��� ���������� ��������� ��������� ������ ������������
� ��������� ��� ������ �������� ����� ��������� ��� ����������
����� �������� ���������
��� ������
� ��� ������ ������
���� ����� ��������� ���
���������� �������
� ��� ��� ��� ���������
��� ����������
� ������� ������ ��
��������� ������������
� ����������� ���������
������������� ����������
����� ����� ���
������� ������
� �������� ��� ���������
�������� �� ���������
� ����� ���������
�������������� ���
������������ ����
��� �����
� ���� ���������
���� ���� �����
��������� ���������
����� ��� W�� ���� ��� ��� ���� ���������� ������������ ���������������
NON-PROFIT ORG.
U.S. POSTAGE
PAID
DURHAM, N.C.
PERMIT NO. 60
������ �����
��������� ��������
����� ������
������� ��� ������
��� ��� ������ ��������
������������� ���������,
��� ��� ������
�������� ������
�� ���� ���-���-����