Foster Business Magazine Fall 2010

foster

Michael G. Foster school of business

University of washington

Here and AbroaD Foster’s Global Business Center Celebrates 20 Years, Page 17

Also :

PACCAR Hall: Open for Business, Page 9 Student Consultants, Page 13

Think differently.

Make a difference.

It’s the Washington Way.

Fall 2010

contents

On the cover

9 Open for Business After a decade of planning and two years of construction, PACCAR Hall debuts this fall as the gleaming hub of the Foster School campus

13 Factoring Reality into the Education Equation Whether sitting at the kitchen table in the home of a small business owner or at a conference table in the boardroom of a global enterprise, Foster School students put their classroom learning and leadership skills to the test long before graduation

17 Here and Abroad Foster’s Global Business Center celebrates 20 years

contents

Dean

James Jiambalvo Executive Director Marketing & Communications

7

Pamela McCoy Managing Editor

Renate Kroll Contributing Writers

Jake Ellison, Ed Kromer, Andrew Krueger, Eric Nobis

27

22

Photography

Matt Hagen (principal), Paul Gibson Design a.k.a. design

Departments

4 In the News

Promising Start(up)s, Can You Relate, Khoo Time, SK is OK, Celebrating Leadership, Tough Sell, Meet the Regent, Heeere’s Foster, Redefining Leadership

21 Faculty

Who Cooks the Books, Faculty Awards, Research Briefs, Marketing Health, Tough Love, Whistle-Blown

27 Alumni

Dan Mattsen, Events Calendar, Tom Crowley, Annie Young-Schrivner, Jennifer and Mason Sizemore, Angelica Macatangay

Foster School of Business Marketing & Communications University of Washington

Box 353200 Seattle, WA 98195-3200 206.543.5102 206.221.7247 (fax) On the Web foster.washington.edu

Foster Business is published twice a year by the University of Washington Foster School of Business. The publication is made possible by donations from alumni and friends. No state funds are used in its production.

Change of Address? fans@uw.edu Comments? bizmag@uw.edu

Think differently. Make a difference.

2 fo s t e r BUSINESS

Five Extraordinary Years

Bill Ayer

When alumni think back to their UW days, what’s the first image that comes to mind? Seeing Mt. Rainier against blue skies over Drumheller Fountain? Maybe it’s grabbing the usual seat in the front (or back) row of a lecture hall in Kane or that special carrel in Odegaard Library.

What about getting out of the cold, grey drizzle and getting to work with fellow business students in front of a roaring fire?

That last one may not sound familiar today, but for future generations, the new fireplace in PACCAR Hall will be a favorite destination. It will also serve as a tribute to the leader who not only envisioned it, but insisted upon it through endless budget meetings and “value engineering” sessions.

Jim Jiambalvo has been a research and teaching staple in our accounting program for more than three decades. His visibility has grown considerably in the last five years since assuming the dean’s role. And because of his efforts and leadership, the same can be said for our school.

Members of the Foster Advisory Board came together recently and recognized the successful conclusion of Jim’s first term as dean. The Regents, Provost (now Interim President) Wise and her review committee renewed the dean’s appointment through 2015, and the facts show it wasn’t a difficult decision. Over the last five years: • more than 25 faculty additions have enhanced our academic departments.

• media rankings regularly include Foster among the top programs in the US. • a new center for leadership and strategic thinking has emerged to help differentiate the school.

• marketing and communications have been revamped to support and define the Foster School brand.

• the UW Business School secured a new name along with a combination of endowment and immediate funding in Campaign UW that will help sustain us through the current economy and beyond.

James Jiambalvo

Of course, the most obvious and tangible transformation driven by Dean Jiambalvo is the construction of PACCAR Hall and the building that will replace Balmer in 2012. I’ve seen this spectacular new space and encourage you to get back to campus to check things out. The state-of-the-art buildings are Northwest in every way—inviting, professional without being pretentious…the kind of places where students, faculty and business people will congregate and share ideas around the clock…or around the fireplace.

Representing grateful alumni and the business community, the Advisory Board set its sights on recognizing Jim’s numerous contributions and leadership example. His passion, ambition, and sense of humor demonstrate that hard work and fun aren’t mutually exclusive. As vital as the latest technology would be to the facilities, it was no more important than the community space that Balmer always lacked. At the heart of PACCAR Hall, you’ll find the Jiambalvo Fireplace with an inscription honoring “a dean who understood student life and learning go beyond the great things happening in our classrooms.”

Leaders like Jim Jiambalvo are few and far between and we’re lucky to have him lighting the way for our school’s future. May the next term be as meaningful and productive as the first!

With gratitude and admiration,

Bill Ayer (MBA 1978) Foster School Board Chair Chairman, Alaska Air Group

FALL 2010

3

in the news

Promising Start(up)s Upstarts shine at 13th annual Business Plan Competition The annual Business Plan Competition is the marquee event for the Foster School’s Center for Innovation and Entrepreneurship.

Its 13th year lived up to the billing.

By the April 7th submission deadline, the center received a record 92 business plan summaries from student teams representing 15 universities across Washington state.

Their start-up ideas ranged from building materials made from recycled glass to a personal device for measuring fat loss.

Six weeks and four fast-paced competition stages later, YongoPal, a team from the UW, won the $25,000 Herbert B. Jones Foundation Grand Prize. A service for South Korean university students, YongoPal allows

4 fo s t e r BUSINESS

them to practice conversational English with their American peers via webcam, while allowing university students in America to profit from those interactions.

The $10,000 Bristlecone-Selamat Challenge Second Prize went to the UW team of Empowering Engineering Technologies for their medical device, ExoWalk. The device utilizes patented technology to reduce the muscular force required to walk, improving mobility for the elderly and people with disabilities.

Two $5,000 finalist prizes were also awarded. Febris, a team from Washington State University, won for a point-of-care viral diagnostic that can detect a viral

infection days before the subject manifests physical symptoms and becomes contagious. Emergent Detection, comprised of students from the UW and UW Tacoma, were awarded for their handheld device that allows home users to measure fat loss. The finalist prizes were sponsored by Fenwick & West and WRF Capital.

In total, $60,000 in prize money was given to teams, including six “best idea� prizes of $2,500 in the following categories: technology, consumer product, innovation, service/retail, sustainable advantage, and clean-tech. For more details about the Business Plan Competition, visit foster.washington.edu/cie. n

Can You Relate?

SK is OK

Customer relationship study is looking for participants

SK Group and Foster Executive Education celebrate 10 years

We live in an age where customer relationships may hold more value than at any other point in the history of commerce.

Factors ranging from the global reach of businesses, to unprecedented levels of marketing noise, to the increase in service content of firms’ offerings, to the rapid pace of competitors entering the marketplace, have put a premium on customer relationships.

Rob Palmatier, associate professor of marketing at the Foster School, is conducting a study to identify relationship strategies that are most effective at enhancing customer relationships, and is looking for business-to-business companies to participate. This is an excellent opportunity to become part of a research study that will help firms better understand, measure, and effectively manage customer relationships.

Each participant will receive a 25-page custom Relationship Audit and Scorecard benchmark report comparing companies to others in the study. The Scorecard provides an external, multi-dimensional view of customers’ relationship with the company—identifying both strengths and weaknesses—while the Audit provides an internal perspective across the prime drivers of customer relational loyalty (e.g., relationship marketing programs, culture, structure, leadership, control, and information systems). All individual results will remain strictly confidential.

Palmatier hopes to gather 100 different companies across multiple industries to participate. The research is being funded by a grant from the Marketing Science Institute, so there is no cost for firms to participate. For more information, or to participate in the study, please contact: Rob Palmatier, at palmatrw@uw.edu or 206-543-4348. n

2010 marks the 10-year anniversary of a partnership between the Foster School’s Executive Education Program and the SK Group, one of the largest conglomerates in Korea. The centerpiece of the partnership is a custom program designed for SK. The program runs once a year, targeting 20 to 25 directors from various SK companies in industries ranging from telecommunications to IT to engineering, and more. Program participants, selected after a rigorous nomination process, spend four months at Foster, delving deeply into core business disciplines including marketing, finance, and business communication. At the end of the program, high-level executives from SK come to Seattle and provide feedback during team case competitions. SK has seen many graduates of this program move into key leadership and executive positions, citing Foster’s high quality teaching and commitment to excellence as key reasons the program remains relevant for SK year after year.

KHOO time Magazine recognizes Foster grad as the business engine behind an influential comic empire TIME magazine has named the founders of Seattle-based Internet comic strip Penny Arcade among its “TIME 100,” a roster of the world’s most influential people in 2010. While recognizing the artist/writer duo of Mike Krahulik and Jerry Holkins as the “tastemakers, and conscience,” of the massive computer gaming industry, the magazine also credits Foster School grad Robert Khoo (BA 2000), Penny Arcade’s business director who turned an obscure comic into a mighty—and fiercely independent—media empire.

With Khoo at the helm of business affairs, Penny Arcade catalyzes a tight-knit web community of 3.5 million hardcore gamers, throws an annual expo called PAX that draws 60,000 fans to Seattle each summer, and runs Child’s Play, a thriving charity that delivers video games to 60 children’s hospitals around the world. n

“We believe the most important asset in SK is its people, especially in this fastchanging business environment,” says Jongtae Chang, president of SK Academy.

“That is why we continue to work closely with the Foster School as our educational partner to develop our global managers and leaders. With 188 graduates to date, many are now executives and significantly contributing back to our company.

The quality of education is top-rate and we really appreciate their willingness to remain flexible in meeting our changing needs each year.” n FALL 2010

5

IN the news Celebrating Leadership Enjoy an evening of connection, reflection and inspiration in celebration of a Foster hallmark Given the Foster School’s emphasis on leadership skills—from the Leadership Fellows Program to the Center for Strategic Thinking and Leadership—it is only fitting that we convene for a special dinner event in which we recognize standout leaders from among our alumni and business partners.

Please join us on October 14.

2010 Distinguished Leadership Award Recipients:

Charles K. Barbo (BA 1963) Partner, Catalyst Storage Founder/Past Chairman, Shurgard Mark Emmert (BA 1975) President, UW; President-elect, NCAA Jon Hemingway (BA 1979) Chief Executive Officer, Carrix, Inc.

Keynote Speaker:

Mark Parker President & Chief Executive Officer, NIKE, Inc. Mark Parker brings 30 years of Nike experience to the job across a broad range of leadership roles, from product design and development, to marketing and brand management.

Joining the company in1979 as a designer, he has been involved in many of Nike’s most significant product breakthroughs. He is widely recognized as the product visionary for the Nike Air franchise, as well as many other industry-leading product designs and performance innovations. In addition to helping lead the continued growth of the Nike brand, as CEO he’s also responsible for the growth of Nike, Inc.’s global business portfolio,

Pictured left to right: Charles K. Barbo, Mark Emmert, and Jon Hemingway

which includes Converse, Cole Haan, Hurley International and UMBRO. Co-Hosts:

Alaska Air Group Chairman & CEO Bill Ayer (MBA 1978) and Unum Group rising star Emily Warner (BA 2009) 19th Annual Foster School Leadership Celebration October 14, 2010

6:00 – 9:30 p.m.

The Westin Seattle 1900 5th Avenue Seattle, WA 98101

Individual: $150, public reception and dinner Patron: $300, priority dinner seating and private award recipient reception Your company may wish to host a table for guests and clients. For table sponsorship information, please contact Jenny Selby at jselby@uw.edu. foster.washington.edu/leadershipcelebration. n

Tough Sell Foster team places 2nd at national sales competition When Foster’s Kaitie Fisher (BA 2010) entered the tiny room with the ceiling-level camera set up to broadcast her efforts at turning a prospect into a client, she was in for a tough sell. After all, that’s why she was in that room and being judged by top sales professionals—to test her mettle in the final round of the 2010 National Collegiate Sales Competition in March.

In this final round of the competition at Kennesaw State University, her “buyer” came out swinging: “I have to tell you, Kaitie … I really don’t appreciate you talking to my reps prior to you coming to me. … I just

6 fo s t e r BUSINESS

don’t think it is good protocol for you to talk to some of my reps,” he groused.

But the judges did appreciate Fisher’s ability to turn this confrontation into a relationship that could result in a sale. Fisher finished fourth out of 122 competitors and her efforts, along with Foster School teammate Angelica Macatangay (BA 2010), gave the Foster team second place among teams from 61 universities.

Fisher and Macatangay honed their sales abilities during six months of intense training with Foster School Sales Program lecturers Jack Rhodes and Mike Eguchi.

Rhodes, who is also director of the Sales

Program, said the competition is set up like the NCAA basketball tournament.

“Students stand outside a buyer’s door and when the red light comes on, they knock and enter an office to meet the buyer and start the sale,” Rhodes says. “For these students the competition is every bit as intense as the NCAA tournament.”

Foster School teams have participated in the competition since 2005 and have placed in the top ten among student teams since 2007. To view last year’s Final Four presentations, visit http://coles.kennesaw. edu/ncsc. n

Meet the Regent

And Now… Heeeere’s Foster!

Foster MBA student appointed to UW Board of Regents

Frances J. Youn, a second-year MBA student at the Foster School, has been selected by Governor Christine Gregoire as the student representative to the University of Washington Board of Regents. The appointment makes Youn the first Foster School student to serve as a regent since the position was established more than a decade ago.

Youn’s service as a board fellow for the YWCA of Seattle and a Fritzky Leadership Fellow, combined with her passion for public service, made the role of regent a natural one to pursue.

Prior to her arrival at Foster, Youn spent seven years in the public sector. She developed the supplier diversity program at the Port of Seattle, helping to increase the utilization of minority-, women-owned, and small businesses. She also has worked for several elected officials including US Senator Patty Murray and Washington State Representative Sharon Tomiko Santos.

Youn believes diversity, affordability, and quality of education are the top three issues to address during her one-year term. “Those three areas are crucial, especially this year as the UW is seeking a new president and faces big economic challenges,” says Youn.

Youn views her new role as a liaison. She plans to provide information from administrators and regents to students, while sharing the personal stories of students that will inform and impact her fellow regents. She also sees her role as being more than momentary. “I have to provide a balanced approach about what’s important for students today while keeping in mind what will be important to students two decades from now.”

Youn received her BA from the UW in 2002, double majoring in sociology and societies and justice. Her term as regent began on July 1. n

People expect leadership to be mostly about the leader, but how much depends upon the situation, and for that matter, on the followers? Could it be that context is a key driver behind star performers? Why are some stellar performers unable to be successful leaders in a different situation?

What role do followers play in the success or failure of a leader?

These are but a few of the questions that will be explored in Fostering Leadership, a collaborative undertaking by UWTV and the Foster School, premiering October 2010.

Fostering Leadership will be a lively halfhour television program that offers a whole new way of looking at leadership, with eight 30-minute episodes in the works.

The premise for the show is simple: traits like leadership and strategic thinking are critical to being successful in business—but how much do we know about cultivating those traits? Some say leaders are born, not made. And yet business schools are tasked with preparing the next generation of business leaders. “This show will dispense with assumptions and examine leadership not through the lens of one particular leader but by dissecting business cases using segments like ‘From the Field,’ where alumni, students, and business leaders weigh in on topics,” says Pam McCoy, executive director of Marketing & Communications at Foster.

Other segments of the show include: “History Lesson,” “The Desk,” “Pay it Forward,” Q&A, and an interactive quiz, “So You Want to Be a Leader?”

“It’s a great fit for us,” says John Haslam, general manager at UWTV. “There’s a new vision driving UWTV—we want to broaden our programming and, at the same time, create a compelling line-up with a predictable airing schedule. Foster wants to broaden access to timely business research happening at the school.”

Visit foster.washington.edu/fostertv for the program schedule and more information. n FALL 2010

7

IN the news

Redefining leadership …and the way we talk about it, explored in a new series for alumni Once the stage was set and the two business leaders seated themselves in plush armchairs with a coffee table and bouquet of flowers between them, it was clear that this wasn’t going to be a typical CEO speech.

And Carol Bartz, the CEO of Yahoo! and featured guest at the Foster School’s May 20th inaugural Redefining Leadership speaker series, didn’t disappoint the more than 500 people in attendance.

Bartz was joined on stage by author and former Microsoft COO Bob Herbold, who acted as moderator for the event. Later the

two were joined by Fritzky Leadership Chair Dorrit Bern (BA 1972) and Foster strategy professor Charles Hill.

As the featured guest, Bartz fielded a wide range of questions from her fellow business leaders on stage and from the audience. Her answers often provided surprising insight into her leadership of the search engine giant.

When asked what she had learned over her years leading corporations, Bartz said one mistake she had learned from was “letting people who didn’t fit the culture of the organization stay too long because they seemed like such a superstar...You hire for talent but fire for fit.”

About hiring, Bartz said, “I have to make it through dinner—without two bottles of

wine. And if I can’t make it through dinner, then I know I can’t work with that person.”

She added that the dinner test often brought out whether the candidate had the right energy level and personality for her organization.

On changing company culture: “Pick your battles,” she said. Changing culture can become like arguing with a teenager, and if you fight over everything—“one of you is dead by the end of it.”

In another surprising twist, Bartz said she stopped the practice of annual reviews at Yahoo! “Development happens every day,” she said. “Just like an athlete works on their skills every day, managers work on their skills every day.” n Click here to view video clips of the event.

Fosterize Casual Friday Your school is highly ranked, well regarded and setting the standard for building business leaders in the Northwest and beyond. Sport your b-school gear with Husky pride…and let folks know that Foster means business!

Foster apparel & accessories are now available. Shop online at foster.washington.edu/shop.

8 fo s t e r BUSINESS

for

Business After a decade of planning and two years of construction, PACCAR Hall debuts this fall as the gleaming hub of the Foster School campus

W

hat began as a pipe dream turned into a dream, then an opportunity, then a plan, then a project, and now a building. A building that is the very state of the art in business education.

When PACCAR Hall welcomes students and faculty this fall, they’ll be in for an unparalleled experience.

This unique composition of bricks and mortar and wood and steel and glass has been designed to express and enhance the Foster School’s culture of collaboration.

“PACCAR Hall represents a paradigm shift in the way that people will think about the Foster School of Business,” says Pete Dukes, the Durwood L. Alkire Endowed Professor of Accounting and chair of the Foster School Building Committee. “This building says quality—finally matching the caliber of our faculty and students. This new attitude, coupled with the technology and environment in PACCAR Hall, is going to change the way we educate the next generation of business leaders.”

Ahead of its grand opening in October, here’s a preview tour of the first major building on campus to be privately funded, as guided by Dukes, who knows it better than anyone.

1 Entrance-Denny Yard

From the campus side, PACCAR Hall strikes a dramatic figure. It’s big, but welcoming. Plenty of gathering spaces in front. And the impressive glass walls are a window on the bustle of activity inside.

2 Central Stairway

The spine that connects PACCAR Hall’s five stories. Bathed in natural light from above, the open-aired stairway affords a grand vertical tour of the building, from the Garvey Family Atrium to the Mark Pigott Board Room.

3 The Jiambalvo Fireplace

Named for Dean Jim Jiambalvo, the reason for its existence, the fireplace holds court at the east end of the Garvey Family Atrium. Circled by comfortable furniture and backed by the Deloitte Student Commons, it will be a magnet for casual—and more purposeful—interactions.

4 Terrace

This iconic, sprawling deck overlooks Denny Yard with peek-a-boo glimpses of Mt. Rainier on a clear day. The Terrace will be a great place to host a reception or just sip a coffee.

It’s framed by a “green roof” that is one of many environmentally friendly design features that we hope will earn PACCAR Hall LEED Gold Certification.

6 Classrooms

The latest in classroom design and technology is offered in 19 classrooms that hold between 25 and 95 people. Most (like the one pictured) seat students in a multi-tiered “U” shape with a center aisle to establish a sense of intimacy in even the largest rooms.

And all are equipped with the latest technology—a touch-screenoperated document camera, dual screens/dual projectors, Blu-ray capability, surround sound, course capture. And, of course, everything is Web-enabled. Housing a local access point, wi-fi will be ubiquitous in PACCAR Hall.

7 The Art of Business

The Foster School commissioned two local artists to produce installations that stimulate thought and discussion in PACCAR Hall.

“The Change Project” (pictured) induces elevator passengers to consider their relationship to change through the words on each floor’s landing. A second work, “Foster Exchange” will allow Foster poets and philosophers to complete the thought “Business is...” which will then travel across digital tickers above the Garvey Family Atrium.

5 Garvey Family Atrium

The Foster School’s central station, a great hub to informally connect with friends and classmates. Grab a cup of coffee at Orin’s Place, named in honor of former Starbucks CEO Orin Smith (and the only cafe on campus to serve Starbucks coffee). This is a great place to appreciate the transparent feeling of this building. The surrounding exterior windows bring the outside in, year-round, and skylights drench the space in natural light.

3

10 fo s t e r BUSINESS

1

2

8 Dempsey Gallery

PACCAR Hall’s “Main Street.” Here you really experience the building’s sense of openness, the wood, the glass, as you pass through the central thoroughfare of PACCAR Hall.

Daylight pours down from above.

Plenty of nooks for informal, hangout meetings.

9 Team Rooms

These small, glass-encased rooms on the second and third floors (28 in all) offer quiet space for student teams to work on projects or prep for competitions. Each is equipped with an entire white-board wall and a large flat-screen monitor.

4

5

8

6

9 7

FALL 2010 11

And now the sequel 10 Offices

10

Faculty and PhD students will have offices on the top two floors of PACCAR Hall, with large windows and nice views to Denny Hall or the Bank of America Executive Education Center. These modest though tailored spaces provide a balance of privacy and access to support research and teaching.

11 Meeting Rooms

11

The building will house a huge variety, from small faculty “think tanks” (pictured) to formal meeting spaces in the Gamble Conference Room and the fifth-floor Mark Pigott Board Room, with its commanding view from the North Cascades to downtown Seattle and a board table crafted from salvaged madrona trees that had to be removed during the building’s construction.

12 Shansby Auditorium

This space serves a class of 75 as effectively as an event for 250.

Crystal-clear acoustics, unobstructed sight lines and a powerful HD projector will support special events like never before.

13 Donor Wall

12

A fixture in the Dempsey Gallery recognizes nearly 500 individuals, corporations, and foundations that support business education at leadership levels for the Foster School. Touch screens will allow students to see donor photos and read about their careers and reasons for giving back.

Entrance-Stevens Way

13

12 fo s t e r BUSINESS

The formal entrance of PACCAR Hall (shown on page 9) provides a stunning new portal to campus, directly from the guardhouse.

It opens directly to the Dempsey Gallery and straight into the main artery of life at the Foster School. n

PACCAR Hall is up and running, but it represents only phase one of a two-part project.

Phase two will replace the aging Balmer Hall.

Plans are to erect a 60,000 square-foot facility that will complement PACCAR Hall in materials, look, and feel.

“They’re clearly siblings,” says Pete Dukes, chair of the Foster School’s Building Committee.

“It’s the Foster School campus, being built in phases.”

Phase two will have a slightly different purpose than its big sib. While classrooms will dominate the lower two floors, administrative spaces will occupy the upper two.

These will include the Dean’s office, the Undergraduate and Graduate Program offices, Career Services (expanding existing MBA programs to serve undergrads as well), the Herbold Innovation Lab, the IT department, and the Anthony’s Homeport Executive Meeting Room, an expansive space for high-capacity meetings, meals, receptions, and other events.

As with PACCAR Hall, Foster is working again with LMN Architects on design and Sellen Construction as its general contractor for the $46.8 million project.

Over the summer, a massive campus data hub was removed from the basement of Balmer, and the structure was prepared for asbestos abatement. Demolition begins in November with a giant “crunching machine.”

“Then, sometime around the new year, from the rubble rises a new building,” says Dukes. Phase two will welcome incoming students in 2012. n

R

© Veer/FancyPhotography

eal-world business consulting experience, where a student’s advice and research can make the difference in a company’s stability and growth, is built into the fabric of the Foster education. It’s one of the ways Foster students are making a difference in the world and in their careers.

“We want our students to be able to roll up their sleeves and solve complex, unstructured real-world problems,” says Jim Jiambalvo, dean of the Foster School, “and we don’t want the first time they experience that to be in their first job after graduation.”

While students sometimes take it upon themselves to arrange a consulting experience, Foster has created a number of formal ways for students to get those experiences. On the MBA level, students can turn to the Field Study Program.

Major Seattle and Northwest corporations like Microsoft, Amazon.com, and Starbucks, as well as some smaller regional companies such as Polyform US and Lucks Food Decorating, offer projects through the Field Study Program.

These companies turn to current MBA students for exposure to new strategic concepts and analytical techniques, competitive insights into market position, and the opportunity to observe potential future employees, says Gordon Neumiller, the program’s director.

In addition to MBAs, hundreds of undergraduates every year engage in powerful consulting experiences

through Foster’s Business and Economic Development Center (BEDC).

The BEDC is the hub where students and small, minority-owned business meet and grow together. Since its origins 15 years ago, the BEDC has grown from 30 students helping six companies to nearly 130 students, dozens of advisors from the Seattle Rotary Club, and many Foster alumni providing insight and direction to a couple hundred companies a year.

Students and advisors through the BEDC have helped businesses create and retain more than 1,100 jobs in inner city communities and generate more than $65 million in new revenues, among other major improvements. Many of those students have also gone on to careers in major for-profit and nonprofit organizations focused on helping small, minority owned businesses start up and grow.

“When we started, we knew that we could make a difference in the lives of business owners,” says BEDC Director Michael Verchot. “We didn’t know that we would also be able to launch our graduates into careers that would touch the lives of many thousands more business owners than this center would ever be able to reach.”

Following is a closer look at the work of Foster students who have had important, real-world consulting experiences through the Field Study Program and the BEDC.

Factoring reality into the education equation

Whether sitting at the kitchen table in the home of a small business owner or at a conference table in the boardroom of a global enterprise, Foster School students put their classroom learning and leadership skills to the test long before graduation

Field Study Program

Foster MBAs stick their heads in microsoft’s cloud

B

y the time Microsoft CEO Steve Ballmer came to the University of Washington in March 2010 to tell the world that he was betting the company on cloud computing, four Foster School MBA candidates already had their heads in the company’s cloud.

Second-year MBA students James Berres, Chris Coffman, Winnie Lin, and Scott Macy consulted with Microsoft during winter quarter through Foster’s Field Study Program. The program matches companies that have a complex business problem with Foster MBAs, who form a team and attack the problem to gain experience.

In November 2009, Microsoft proposed several cloud computing projects through the Field Study Program. In a competitive bidding and intense screening process, Foster MBAs won the right to delve into the newest wave of computing with Microsoft.

Cloud computing defined

Cloud computing can be thought of as “utility computing.”

Like a utility company providing electricity, Microsoft will sell companies access to its computing and storage infrastructure comprised of massive data centers located across the globe.

Companies will only pay for the computing power they use.

14 fo s t e r BUSINESS

In October 2009, Microsoft unveiled its technology to run the cloud: Windows Azure platform. External developers and others have already started using the operating system.

“We are in that switchover mode where companies might not necessarily have to have their own data centers or pay someone to host their data center,” says Coffman (MBA 2010). “They can just grab the storage and the computing power they need as they need it.”

Why Microsoft needed Foster MBAs

In the software giant’s effort to once more revolutionize computing, Microsoft worked for years and spent hundreds of millions of dollars developing its new operating system and building data centers to support it. Consequently, Microsoft’s internal teams held expert, in-depth knowledge about its new technology.

One thing those teams couldn’t do? Shed their identity.

“Microsoft had a very good understanding of cloud computing. They knew what their technology was. They knew how their internal groups felt about the technology, the risks, the rewards, the benefits, all of that,” says Berres (MBA 2010).

“What they didn’t have a good feel for was, what do other large enterprise companies feel about it?”

Basically, Berres explains, when Microsoft asks a company’s chief information officer (CIO) and other IT leaders what they think about the cloud, the answers might reflect that group’s desire to play ball with Microsoft, the biggest “kid” on the block.

“So,” he says, “they brought us in to get that outside perspective.”

The Foster MBA team established a matrix for what questions they would ask and how they would categorize answers, built a list of target companies from their own contacts and through Foster School professors, staff, and alumni, then set out to interview leaders of those companies. To help insure objectivity, the team guaranteed anonymity.

Ballmer came to the UW Seattle campus, it really hit them just how pivotal the project was.

Says Coffman: “The fact that, just about a week before we gave our final presentation, Ballmer gave his big presentation about the cloud, that Microsoft was ‘all in,’ that told us that, hey, we are really working on important stuff here!”

Berres adds that not only did the field study open doors at Microsoft and sharpen their own understanding of business consulting, but it also put them in front of tech leaders in the biggest and best companies in the country.

“It gave us a reason to go to executives at Fortune 500 companies who normally we wouldn’t have a reason to talk to,” Berres says. “So, it not only gave us all of this information, it also gave us contacts we wouldn’t otherwise have.”

Gordon Neumiller has organized hundreds of consulting opportunities for second-year MBAs and similar projects for first-years. Nearly 10 years ago he helped the program mature

From strategy to real-world results

Microsoft’s Mike Olsson, principal solution manager, Product Group Strategic Initiatives, says the students uncovered a surprising attitude.

“In terms of wanting a repeat performance with the Foster School, I’m very much in favor of that.

The students were just outstanding.”

© iStockphoto.com/ alxesl, ©GettyImages, © iStockphoto.com/CostinT

Jeff Finan, general manager of Microsoft’s Product Group Strategic Initiatives

“Where we might have predicted that cost and security would be the issues that would be top of mind for a CIO, the things people asked about most at first revolved around agility and integration. So there was a little bit of an adjustment for us in the way we looked at customer attitudes in the enterprise IT environment.”

The Foster team also confirmed for the Microsoft team many of the attitudes they expected to see about moving to the cloud.

Another benefit, says Olsson, “is that discussing interesting technical subjects with smart people is a really good thing to do, particularly when they have a new or slightly different viewpoint than we might have internally.”

Jeff Finan, general manager of Microsoft’s Product Group Strategic Initiatives, echoes Olsson’s assessment of the Foster MBAs and adds that “in terms of wanting a repeat performance with the Foster School, I’m very much in favor of that.

The students were just outstanding.”

from a student club to a more formal and significant part of the Foster MBA experience.

While the success of Foster MBAs in cloud computing didn’t surprise him, the timeliness and quality of the work made it stand out. With Steve Ballmer saying Microsoft was ‘all in,’ Neumiller says, the project was as leading edge as it gets.

“At the end of the final presentation,” he adds, “it was like this big group hug. Everyone was so happy. I said, ‘I don’t know what they are doing at other business schools, but it cannot be any better than this.’ ”

Being part of the next big technology trend

Students on the MBA team said they knew going in that the field study would give them the opportunity to discuss the next big thing in computing with world leaders. But when

FALL 2010 15

Business and Economic Development Center

MBAs don’t have a lock on high-impact consulting

B

usiness consulting—it’s not just for MBA candidates.

At Foster, undergraduates also have a myriad of coveted hands-on consulting opportunities ranging from the formal to the informal, such as the student-led Global Business Brigades trip to Panama over spring break to help small farmers improve operations and revenue.

When it comes to formal, high-level consulting projects and internships, undergrads turn to Foster’s Business and Economic Development Center (BEDC). The BEDC’s main program for undergraduates is its Business Assistance Program, which takes more than a dozen small, minority-owned businesses through three quarters of consulting help.

With no lack of small companies needing expert assistance, the BEDC also runs several summer internships for young business students looking to take on significant consulting challenges.

This summer, Jenny Sang and Joyita Banerjee, both just entering their junior years at Foster, provided more than 80 hours a week of consulting to six small local construction firms. These firms needed help establishing better accounting practices, building better business plans and expanding their customer base through brand strategies and marketing plans.

“We get to do what we are passionate about, increase our knowledge, and also help someone in a really impactful way,” says Banerjee.

Changing the world

Sang and Banerjee got their first taste of consulting through the BEDC’s winter-quarter Marketing 445 class, which is one stage in its Business Assistance Program. Through that class, students work in teams with mentors from the ranks of topprofessional consultants. Sang and Banerjee said they learned a lot about building client contracts, establishing timelines for deliverables, and holding themselves and others accountable.

16 fo s t e r BUSINESS

Now that experience is paying off for the two as they begin their summer consulting projects with just each other and the BEDC staff as backup.

“It is a bit terrifying, I’m not going to lie,” says Sang a week into the summer internship. “It has also been exhilarating just being in charge of my own project, managing things, learning and, really, taking full responsibility.”

Banerjee agreed: “I like to challenge myself in new ways and getting to work with a company at an undergraduate level is empowering.”

Both students say they want to pursue consulting as a career when they graduate, but that’s a couple of years down the road. So, the two are looking to expand their formal business knowledge in order to be of even greater help to the businesses they hope to help out in the field.

“I think the job market is really competitive now and you need to take advantage of all the opportunities to learn and gain experience in order to get a job when you graduate,” Sang says about her desire to get consulting experience while in college.

“And that’s just the bottom line,” she emphasizes. “I’ve always wanted to get out there and change the world, and these projects are allowing me to do that one small step at a time.” n

In the BEDC’s Business Assistance Program last year 120 undergraduates were paired with 115 professionals to provide more than 11,000 hours of consulting to 16 regional minority-owned businesses. This hands-on work is much more than an exercise in education for these students as well. Companies receiving consulting from undergraduates in the 2008-09 school year reported $1.3 million in revenue growth and 23 new full-time and three new part-time jobs added to payrolls.

Hereand AbroaD Foster’s Global Business Center celebrates 20 years

O

© iStockphoto.com/narvikk

n May 6, 2010, Kirsten Aoyama, director of the Foster School’s Global Business Center (GBC), got some welcome news: the announcement that they would receive a $1.58 million grant from the US Department of Education.

Receiving the grant renewed the Global Business Center’s elite status as one of 33 federally-designated Centers for International Business Education & Research (CIBER) at leading business schools around the US. It’s a role that began in 1990 when the GBC received its first CIBER grant.

Created by Congress to increase and promote the nation’s capacity for international understanding and competitiveness, the CIBER grant has been the Center’s primary source of funding for 20 years, and its renewal serves as confirmation of their ongoing achievements.

“It’s validation of the incredible work being done by our Global Business Center,” says Jim Jiambalvo, dean of the Foster School. “Creating learning opportunities which build global business expertise for our students, faculty, and business community is a top priority of the Foster School.”

Currently under the leadership of Aoyama and faculty director Dr. Debra Glassman, a senior lecturer in business economics, the GBC directly benefits over 6,000 individuals annually with programs that serve students, faculty, and the community. And while the programs for faculty and the community are integral to the GBC’s mission to develop global business expertise, for the staff, faculty, and advisory board members associated with the center, the greatest dose of inspiration comes from the positive impact made on students from here and abroad.

FALL 2010 17

The staff and faculty of Foster’s Global Business Center (pictured from left to right: Krista Peterson, Kirsten Aoyama, Debra Glassman, Wren McNally, Andrea Gomes, Kathleen Hatch, Nicolle Merrill).

Taking Off

When the CIBER program was first established in 1988, Dick Moxon, former professor of international business, took note.

He also took charge, traveling to Washington, DC, to study the proposals submitted by the six schools originally funded by the grant. And with support from former associate dean Gary Mueller, fellow faculty, and members of the Seattle business community, he compiled a proposal for the next round of grants. In 1990, the school received its first CIBER grant, establishing the Global Business Center and adding “faculty director” to Moxon’s list of titles.

One of the program ideas submitted by Moxon in that initial proposal was the undergraduate Certificate of International Studies in Business (CISB). The nationally ranked program has been a phenomenal success, and according to Moxon, is illustrative of the approach he wanted to emphasize for the GBC. “It wasn’t simply an international business program,” says Moxon. “It was taking marketing and accounting and finance majors and adding global requirements. Students would have to take international business courses, but they would also have to be proficient in a foreign language and get

18 fo s t e r BUSINESS

international experience through studying or working abroad.

That was key.”

Looking back, Moxon describes himself and former colleague Kathy Dewenter as “internationalists.” Dewenter, an associate professor of finance at Foster, was a supportive colleague of Moxon’s early efforts and succeeded him as the GBC’s faculty director in 1998.

Their international experiences cemented their view that the business world was bigger than the United States.

Moxon had served in the Peace Corps and taught abroad.

Dewenter had worked on an international level in banking and consulting. Both valued real-world experience. “International courses are important,” says Moxon. “But we used to make fun of international business faculty and majors who didn’t have passports. It doesn’t make any sense. It’s very important to travel, to experience—even study tours for two weeks are eye opening for participants.”

Departures

Jennifer Wallis is relationship director for Wells Fargo Global Financial Institutions and Trade Services for the United Kingdom, Ireland, and the Netherlands. A Foster alum (MBA 1998)

now living in London, she travelled with Moxon on the first MBA study tour to Indonesia in 1997, and recalls the significant impact of her time abroad.

“In two weeks time I learned more about the importance of international business than I did in any one class that I took at the university,” says Wallis. “You can hear things in the classroom and read things in books, especially about cultural interactions as they relate to business, but until you actually experience them you really can’t understand their importance.

Hearing perspectives from local business and then hearing the perspective of US companies doing business in foreign locations was fascinating.”

Wallis followed the trip to Indonesia with a quarter abroad on exchange at the Indian Institute of Management in Bangalore, India. She wanted to be on the ground in the midst of the emerging economy.

It wasn’t an easy course of study. Wallis was immersed with India’s brightest minds; applicant acceptance for postgraduate programs at the Institute is less than 1 percent.

Add the fact that she was in her late 30s and most of her classmates were more than a decade younger. Her Indian classmates were stunned. “In the States, it was common for women go back to school. At the time I was studying abroad, it was unheard of for Indian women.”

Wallis credits both experiences with helping in her career path, and thinks it should be a requirement for all Foster students to study or work abroad.

It turns out, many are following her lead. As a result of the GBC’s current efforts, 46 percent of Foster School MBA students study abroad each year through Global Business Center study tours and exchange programs. For undergraduates, 30 percent currently study abroad each year. By 2014, the center plans to increase that number to 50 percent.

Nationally, only 10.1 percent of college undergraduates study abroad.

“There’s been a sea of change in international business education,” says current faculty director Debra Glassman.

“Twenty years ago international business as a field was about teaching students to think global. Now that’s passé; everybody knows that thinking global is important. The center is about giving students international experience. They know their future careers will be global by definition, so we focus on preparation, providing students with the opportunities to enhance their global experience and cross-cultural understanding.”

Those opportunities include travel abroad through exchange programs, global business study tours, and international internships. They also include programs close to home such as the Global Business Case Competition and Global Social Entrepreneurship Competition which take placeannually at the Foster School.

Timeline: 1990: GBC founded with federal CIBER grant award 1992: Nationally ranked, undergraduate Certificate of International Studies in Business (CISB) established 1997: First MBA Global Business Study Tour (Indonesia); IKEA International Case Competition established 1998: Global Business Case Competition established 2004: Global Social Entrepreneurship Competition launched 2008: A record high $25,000 in study abroad scholarships awarded to Foster students 2010: 7th CIBER grant received and 20 year anniversary celebrated

FALL 2010 19

Arrivals

Nishika de Rosairo traveled to the US to compete in the Global Business Case Competition in 2002.

Originally called the Global Business Challenge, the weeklong program brings together undergraduate students from 12 to 14 countries who participate in a real-world case study to analyze and develop a business recommendation within 48 hours. And, it provides students a chance to build cross-cultural relationships and meet Seattle area business leaders. The impact can be life-changing. Such was the case for de Rosairo.

A participant from the University of Auckland in New Zealand, de Rosairo had traveled to multiple countries, but had not visited the US. She relished the opportunity to compete, talk with peers from around the world, and gain insight into American business practices, including visits to the headquarters of Microsoft and Costco.

“A lot of international students study global firms that are headquartered in the US. We read about them in textbooks and business cases, but don’t get a chance to experience them or meet the people behind them,” says de Rosairo. “Coming to this competition, especially for those that hadn’t been to the

US before, was an opportunity to solidify what we had learned in the classroom.”

The experience led de Rosairo to return to Seattle seven months after the competition—on exchange as a Foster MBA student—and again in 2005 to work at Deloitte’s Seattle office. That’s when she decided it was time to give back.

“I had amazing experiences, met so many people, and received such great support from the Foster School. So when I returned to Seattle I wanted to find a way to add value to the student experience in some way.”

She landed on the idea of a mentoring program and approached Anne Sackville-West (BA 2003), a friend she first met at the Global Business Case Competition. No surprise given their backgrounds, the two founded the Business Mentoring Connections Program to support Foster undergraduates pursuing a Certificate of International Studies in Business.

20 fo s t e r BUSINESS

Now in its sixth year, the program pairs each student with a mentor with whom they meet over the course of the academic year. De Rosairo describes the students as smart, wanting to lead, and driven to make a difference.

Destination Points

De Rosairo is one of nearly 1,000 students from 65 countries who have competed in one of the GBC’s competitions. Wallis is one of an estimated 4,000 Foster students who have studied abroad as part of the center’s efforts. They’re both examples of why the Global Business Center can truly celebrate 20 years of offering programs to enrich global business expertise.

The man who started it all agrees.

“While the Foster School today may have fewer faculty and courses that are specialized in international business, the curriculum, programs, students (especially students!), and faculty are MUCH MORE global,” wrote Moxon in an e-mail.

“This was the goal from the outset, and while this was not all the result of our efforts, we’ve had a lot of success.”

What’s ahead?

“Twenty years ago, there weren’t the big issues we have today. At the time, the international business issues were more for specialists, for example ‘Do you enter a market with a joint venture or a green field investment?’ The questions were important, but narrow,” says Glassman. “Now global business is addressing issues such as climate change and global health and clean energy—those are huge topics. I feel that the change has made what we’re doing really interesting and really timely. And we don’t have to convince anybody of the importance.”

Aoyama agrees and points to the change she’s seen from students in the past few years. “From a student standpoint, what’s been interesting to see is their interest in the developing world and their passion for socially responsible business. When I started here, the students were focused on travel to Europe and East Asia. Now there is student demand for opportunities to study in places like East Africa and Central America,” says Aoyama.

She points to the Global Social Entrepreneurship Competition as another great example of change. “For the first three years we thought we might cancel it for lack of interest. Now students from here and around the globe are submitting business ideas that can change the world and our business community is embracing their efforts.”

Given the success of the past twenty years, the increased interest in global business, and a student population that wants to make a difference, the GBC’s next twenty years could very well be world changing. n

faculty

Who Cooks the Books?

CFOs manipulate financials due to CEO pressure, not personal gain “The boss made me do it.”

That’s the crux of a new study on why CFOs become involved in accounting fraud

by Terry Shevlin, the Paul Pigott-PACCAR Professor of Business Administration, and Weili Ge, an assistant professor of accounting, both at the Foster School.

Examining a comprehensive sample of material accounting manipulations disclosed between 1982 and 2005, Shevlin, Ge and co-authors concluded that CFOs bear substantial legal costs for intentionally cooking the books, yet reap limited immediate financial benefits. At the same time, CEOs of manipulating firms hold far more power and incentives to do so than their counterparts in non-manipulating firms.

“Taken together, our findings are consistent with the explanation that CFOs are involved in material accounting manipulations because they succumb to pressure from CEOs, rather than because they seek immediate personal financial benefit from their equity incentives,” says Shevlin.

© iStockphoto.com/mgkaya

What’s their motivation?

The spate of corporate accounting scandals over the past decade has led to significant losses for investors, triggered a series of corporate governance reforms, and prompt-

ed efforts to identify the underlying causes of these scandals. Where most research on the topic has focused on the equity incentives of the CEO or executive team as a whole, the Foster study investigates the incentives and role of the CFO who, after all, oversees financial reporting.

Piecing together indirect evidence lodged in the cases of 676 firms alleged by the SEC to have misstated financial statements, Shevlin, Ge and their co-authors found that CFOs were most often named as culpable in SEC enforcement releases, and faced penalties such as job termination, future employment restrictions, fines, and criminal charges. At the same time, CFOs of fraudulent firms did not have equity incentives any different from CFOs of firms that did not cook the books.

In contrast, CEOs of fraudulent firms had higher equity incentives and more power than counterparts at firms that practiced compliant accounting.

The researchers also noted that, in the three years prior to their financial misstatements, manipulating firms experienced higher CFO turnover than non-manipulating firms, suggesting that some CFOs lose their jobs because they refuse to participate in accounting manipulations under CEO pressure.

The SEC enforcement releases also indicate that CEOs were more likely than CFOs to have orchestrated the accounting manipulations as well as having benefited financially from the manipulations.

Introduce checks and balances

Ge says most experts believe that altering executive compensation is the most effective way to dissuade C-level officers from manipulating financials.

“While it is important to fix executive compensation in order to prevent future accounting fraud,” she says, “fixing equity incentives is not enough. We also have to fix corporate governance.”

Shevlin adds that boards of directors, acting in the best interests of shareholders, should consider insulating the CFO from his traditional boss: the CEO. “When you allow a CEO to get too powerful,” Ge says, “there is a greater risk of manipulations and all forms of fraud.”

The paper, “Why Do CFOs Become Involved in Material Accounting Manipulations?” won the 2008-09 Glen McLaughlin Prize for Research in Accounting Ethics from the University of Oklahoma School of Accounting. n

FALL 2010 21

faculty RESEARCH BRIEFS

faculty awards Developing CSR Young wins Fama-DFA Prize for top research in asset pricing Lance Young, an assistant professor of finance at the Foster School, has won the

Fama-DFA Prize for the past year’s best asset pricing research. The prize recognizes the paper, “Why is PIN Priced?,” co-authored with Jefferson Duarte of Rice University, and published in the Journal of Financial Economics.

The paper examines the effect on stock prices of information asymmetry in the market—the presence of both uninformed traders and informed traders who possess private or inside information. Specifically, Young and Duarte debug a controversial model that suggests uninformed traders require higher expected returns in the presence of informed traders.

The study required an enormous assist from the Foster IT team to examine every trade and every quote of every stock listed on the NYSE since 1982. The effort allowed Young and Duarte to rebuild the model accounting for liquidity events such as earnings announcements that spur many investors to rebalance their portfolios.

“This study is kind of deep ‘inside baseball,’ ” Young says. “But it matters a lot to asset pricers.”

Shah named “Thought Leader” by Academy of Management—again Sonali Shah, an assistant professor of management at the Foster School, has

received the 2010 Thought Leader Award from the Entrepreneurship Division of the Academy of Management.

The award is in recognition of her paper, “Individual and Opportunity Factors Influencing Job Creation in New Firms,” published in the Academy of Management Journal.

In the study of new ventures started by unemployed individuals, Shah found that entrepreneurs with a breadth of business knowledge tend to create fewer jobs in the early stages of a new venture, while entrepreneurs with leadership experience tend to create more jobs in the early stages. In more labor-intensive businesses, both breadth of knowledge and leadership experience allow founders to operate their firms with fewer employees.

Previously, Shah won the 2008 Thought Leader Award for her paper, “The Accidental Entrepreneur: The Emergent and Collective Process of User Entrepreneurship.”

Wells wins E & Y Inclusive Excellence Award Bill Wells, a senior lecturer in accounting at the Foster School, has won the 2010

Ernst & Young Inclusive Excellence Award. This annual award recognizes extraordinary efforts in creating a more diverse learning environment that helps students succeed in today’s global workforce.

Wells, recipient of the 2006 UW Distinguished Teaching Award, served as faculty advisor of the Foster School’s Delta Chapter of Beta Alpha Psi from 2000 to 2005. Under his guidance, the Foster chapter became one of the national accounting organization’s most-acclaimed, earning five-consecutive Superior Chapter distinctions and growing from 30 to more than 200 members. From 2005 to 2008, Wells served as Northwest regional director of Beta Alpha Psi. n

22 fo s t e r BUSINESS

Systematic corporate social responsibility not limited to developed markets

Corporate social responsibility (CSR)— a set of behaviors toward the environment, employees, and communities—is most often ascribed to established firms based in wealthy nations such as the US and members of European Union. But what about the developing world, where pragmatic necessities of survival and growth are thought to trump the loftier ethics that drive CSR? Systematic CSR does exist in the developing world, according to research on the Mexican auto parts industry by Alan Muller, a senior lecturer in international business at the Foster School. But its existence owes more to the commitment of local managers than to external pressures applied by governments, non-profit watchdogs, or even the powerful companies at the purchasing end of global supply chains.

“Extrinsic pressures that push firms toward being more socially responsible are important,” says Muller. “But they fall on deaf ears if management of a supplier firm is not committed to ethical behavior. Putting people center stage and fostering a morality-based commitment to ethics is what really matters.” n View the Faculty Research Year-in-Review

Net herding

Automatic Ethics

Online reviewers follow the crowd… unless they listen to friends

Back-of-mind beliefs, activated by a firm’s culture, produce unethical behavior

© iStockphoto.com/oonal, xiver, MaryLB

How will you rate the movies of 2010?

If you pay attention to online movie reviews, you are likely to follow the crowd. If, on the other hand, you consider the online reviews generated by friends, you’ll probably come to your own conclusion.

This according to a new study of citizen movie reviewers on the site Flixter.com by Yong Tan, an associate professor of information systems at Foster, and doctoral student Young Jin Lee. The authors find that prior exposure to a crowd rating increases the likelihood that a reviewer will follow suit. However, when a reviewer first consults the reviews of individual friends in his or her social network, the herding effect is significantly moderated.

In the interactive era of Web 2.0— where consumer reviews play a critical role in the success or failure of any new product—it can be tempting for firms to manufacture reviews.

“In the short term, manipulating user reviews at the beginning of a product release to induce herding behavior can be good for business,” Lee says. “But in the long term, the entire integrity of the product can be questioned, and trust diminished.” n

Organizations have more power to direct the ethical behavior of employees than we previously knew.

That’s the bottom line of new research by Scott Reynolds, an associate professor of business ethics at the Foster School, that demonstrates, for the first time, the relationship between moral intuition—a reflexive perception of what is right and wrong—and moral behavior.

Context is critical, Reynolds finds. A firm’s cultural cues can “activate” immoral behavior in an employee who is predisposed to believe that “business” is an inherently moral activity.

To get to this conclusion, Reynolds and collaborators from the US Military Academy and the University of Toronto first developed a measure of an individual’s implicit assumption about the moral nature of business—is it an activity to endorse or decry? A score near 1.0 indicates a strong association between business and moral. A score near -1.0 indicates a strong association between business and immoral.

“What’s really interesting,” Reynolds says, “is that these associations predict behavior.”

To learn how, a second study asked the association-assessed individuals to complete a series of workplace tasks for a fictional company. Among them was a test: the opportunity to overstate an insurance claim. And a veiled cue: a welcome memo from the CEO written in either aggressive language (“we’re a competitive firm that does whatever it takes”) or ethical language (“we are a responsible firm that does things the right way”).

Few of the people who implicitly believe business is immoral overinflated their insurance claim. But the people who believe business is moral were affected by their respective cues. Those who read the “ethical” CEO memo did not cheat on their insurance claim. But those who read the “aggressive” CEO memo were much more inclined to cheat on theirs.

“Belief alone—in this case that whatever you do to enhance your business is right and good—is not sufficient to push someone over the limits of ethical behavior,” Reynolds says. “It takes personal belief plus a culture or context that supports and encourages it.”

This finding sheds light on the thousands of individual ethical breaches that led to the recent meltdown in the financial sector. “This was not just the work of a few rogue finance experts,” Reynolds says. “It was finance experts in organizations that supported this kind of risky, unethical behavior. That’s what drove the economy over the edge.” n

FALL 2010 23

faculty

Marketing Health Forehand brings the best practices of marketing to the realm of public health Public health has a marketing problem.

Or, as Mark Forehand sees it, public health has a marketing opportunity.

The associate professor of marketing at the Foster School says that public health messages have traditionally been broadcast rather than targeted. This is an approach born of necessity and ambition—the attempt to reach the largest possible audience with scant resources—but it requires a certain degree of rationality to work.

“Classic public health takes a strategy of pure, push-out-the-information, trusting that people will act accordingly once they understand what is good for their health,” Forehand says. “Unfortunately, we are not rational creatures.”

Perhaps no one is better equipped to work with this reality than marketers.

And for the past four years, Forehand has brought the best practices of his profession to the UW Health Marketing Research Center (HMRC). The center—one of three nationwide—was created in 2006 with a $3.6 million grant from the Centers for Disease Control and Prevention (CDC). It’s a multi-disciplinary research group, comprised of public health specialists, clinicians, an economist, a psychologist, a biostatistician, and Forehand.

“We thought we’d be more credible applying for the grant if we had a cardcarrying marketer on the team,” says Dr. Jeffrey Harris (MBA 2003), principle investigator of the HMRC who recruited Forehand to the center.

Marketing marketing

Even in a center with marketing in its title, Forehand initially had to convert some career health professionals who associated the term with big business seducing people to consume in the extreme, resulting in many of the intractable health problems that face an overweight, under-fit population.

“Many in public health consider marketing a pejorative: the evil we have to overcome,” says Forehand. “So I first had

24 fo s t e r BUSINESS

to convince people that marketing is a tool box. And, sure, it can be used for purposes that have a disutility for society, but it can also be used for purposes that have utility for society.”

It’s not difficult to see why this attitude might persist. Forehand estimates that the entire public health budget for combating obesity, diabetes, and heart disease combined would amount to maybe one half of one percent of the advertising budgets of Pepsi and Coke.

Hit the target

Harris, Forehand, and other researchers are trying get a bigger bang for the buck.

Through the center they have collaborated on several pilot projects in a more targeted form of public health campaign. Among them: • A partnership with the American Cancer Society to develop smart strategies to promote healthy behavior and the prevention of chronic disease in the workplace.

• An effort to combat high blood pressure among low-income and immigrant populations by using emergency medical technicians to distribute health information in the field.

• A study on senior health found that fear of falling plays an enormous role in whether or not older adults attend exercise classes, and helped create messaging to assuage anxiety.

• An ongoing field study, in partnership with the Robert Wood Johnson Foundation and the fast-food chain Taco Time, is adapting state-of-the-science knowledge in consumer psychology to fashion menus and messages that will result in healthier eating for children.

Healthy connection

The CDC has pulled the plug on funding for its trio of health marketing pilots, so the UW center will officially close later this year. But Forehand and Harris say that the

collaborations have taken root and will continue in ongoing and future studies.

Forehand and Dan Turner, associate dean for masters programs at the Foster School, also will continue to teach marketing to students in the School of Public Health’s masters program in health administration.

“The real long-term value of the center is that we made all of these interconnections across campus,” Forehand says.

That and, perhaps, the seeding of a growing détente between marketing and public health.

“There does tend to be an anti-business sentiment in public health,” admits Harris, who pursued his Executive MBA at Foster after seeing the influence of business on health care over a 20-year career with the CDC. “And we in public health often bring solutions that don’t begin with the audience and their behaviors, wants, and needs.

The biggest insight that Mark has given us is that understanding your audience is key.

That’s an incredibly valuable perspective for our research projects and our health administration students—convincing them that marketing is, indeed, a tool kit, an approach to figuring out what people need and how to get it to them.

“Marketing doesn’t make you pro-business. It just makes you pro-gettingthings-done.” n

Tough love Thomas Gilbert wins 2010 Paccar Award the hard way from his uncompromising father: tu peut mieux faire. You can do better.

And he did. Following in the footsteps of the original Dr. Gilbert, who worked for the World Health Organization, Thomas Gilbert earned his own PhD at California-Berkeley.

There he applied his initial study of physics toward the understanding a different kind of complex system—financial markets.

Personal economics dictated that he also teach, and Gilbert was named outstanding graduate student instructor at Cal three years in a row.

Introducing finance

Thomas Gilbert is neither big nor scary.

Yet somehow this amiable, erudite assistant professor of finance at the Foster School manages to strike fear in the hearts of firstyear MBA students each session of his core finance class.

It’s cold calling that does the trick. Of the many techniques and technologies he employs to keep the class engaged and enlightened, it is Gilbert’s habit of randomly selecting students to field questions, explain concepts, solve complex business cases—that is most effective.

It’s also an excellent means of persuasion to adopt his cardinal rule: be prepared.

“I don’t do cold calling to be hard on them,” he says. “Businesses are becoming more and more quantitative. And you have to be able to communicate on the spot, explain the data in simple and accurate terms.”

Fear = friend

Rather than excoriate Gilbert for his pressure-cooker tactics, his students exalt him.

MBAs selected him recipient of this year’s PACCAR Award for Excellence in Teaching, the Foster School’s highest teaching honor.

“He kept everyone challenged—both investment bankers and people new to finance,” wrote one nominating student.

“Everything we did was 100 percent useful,” offered another.

And another: “Thomas achieved a consistently high level of engagement, higher than any of our other classes. You couldn’t slack off in his class and you didn’t want to.”

Demanding youth

Slacking-off doesn’t even appear to exist in Gilbert’s vocabulary. He was born in Switzerland to high expectations, skiing competitively from a young age and attending formidable French schools. Anything less than perfect marks drew a stern response

Arriving at the Foster School in 2008, he took on the MBA core finance class last fall, with its challenging mix of students with somewhere between zero finance experience and five years in investment banking.

If he demands much, Gilbert provides even more. He charges the classroom with enormous energy, and equips students with materials in every medium possible. And he’s already renowned in the MBA Program for his ability to explain the trickiest concepts (MBAs at Cal nicknamed him “Is It Clear?” in honor of his comprehensive elucidations).

Gilbert is very much an academic. His top-flight research continues to explore the complex vagaries of the financial markets, currently analyzing the impact of macroeconomic announcements. But teaching provides a needed social dimension.

“I love doing research, but it’s quite solitary,” Gilbert says. “I also thrive on the interaction of the classroom. I work extremely hard to prepare for class and I find nothing more rewarding than giving students as much energy as possible. It’s exhausting at the end of the day, but it’s a great exhaustion.” n

FALL 2010 25

faculty

Whistle-Blown Firms suffer long-term economic damage when employees allege fraud

Truth or economic consequences

Firms accused publicly of financial fraud by whistle-blowers may deny the charges vehemently, but investors take them very seriously.

This according to new research developed at the Foster School that demonstrates that media reports of such allegations lead to multiple woes for targeted companies, including a significant depression of their stock prices not just for days but for years.

Attention to whistle-blowing has heightened dramatically in the decade since insiders helped reveal accounting scandals at Enron and WorldCom. The subsequent Sarbanes-Oxley Act of 2002 included provisions to protect employee informants.

But critics have downplayed the impact of whistle-blowers, suggesting they often misjudge a situation or lodge frivolous charges in an attempt to exact revenge.

26 fo s t e r BUSINESS

The authors analyzed 218 employee whistle-blowing events between 1989 and 2004, initially focusing on the stock performance of 81 companies whose whistle-blower allegations of financial misconduct were reported in the media.

They found that, in the five days after the allegations became public, share prices of the accused companies fell 2.8 percent on average, compared to the market as a whole. Relative prices dropped even more steeply—7.3 percent—when the allegations concerned earnings management.

In the two years following media accounts of whistle-blower accusations, the accused firms issued more earnings restatements, fought more shareholder lawsuits, and produced poorer operating and stock performance than similar firms during the same period.

“Whistle-blower allegations appear to be an early indicator of future negative economic consequences for targeted firms,” Bowen says.

Power of the press

Analysis of a second sample—137 firms that were the targets of complaints relating to financial misconduct registered privately with the Occupational Safety and Health Administration (OSHA)—suggests that whistleblower cases exposed in the media weigh more significant costs and repercussions than do cases not reported in the media.

Companies that were the object of media-reported whistle-blower scandals were significantly more likely to subsequently improve corporate governance than other comparably-sized firms in the same business or a similar business.

They also were much more likely to replace their CEOs, to reduce the size of their boards, and to lower the proportion of insider directors and directors with three or more additional board memberships.

“These governance improvements were not apparent for firms subject to whistleblowing allegations that were not widely disseminated,” Bowen says.

Characteristics of whistle-blown firms

The researchers also learned a good deal about the type of company vulnerable to fraud charges by employees.

Whistle-blowers tend to target firms that are large, growing, successful, and highly regarded. Recently downsized firms, and those with slack governance are more likely targets as well. And, perhaps not surprisingly, employees are more likely to go public with allegations of corporate malfeasance when they potentially benefit from a share in any fraud-related settlement.

The study, “Whistle-Blowing: Target Firm Characteristics and Economic Consequences,” appears in the July issue of The Accounting Review. The paper received the 2008 Glen McLaughlin Award from the University of Oklahoma for the best unpublished research paper in accounting ethics. n

© iStockphoto.com/emily2k

Whether accurate or not, whistle-blower charges should not be taken lightly, according to study co-author Robert Bowen, the PricewaterhouseCoopers Professor of Accounting at the Foster School, who carried out the study with Shiva Rajgopal of Emory University, and Andrew Call, a former Foster School doctoral student now at the University of Georgia.

“Our results suggest that whistle-blowing is far from a trivial nuisance for targeted firms,” Bowen says.

alumni

Riskiest Business Dan Mattsen has gambled life and livelihood during a career on the sea Hauling a heavy metal chain wrapped around his neck, Dan Mattsen (MBA 2008) scaled the stack of 800-pound crab pots that rose from the deck like a multi-tiered mesa lurching in the Bering Sea. He was a young man, circa 1980, first working as a deckhand on a commercial crab fishing boat. And “chaining down the stack”— despite any resemblance to a daredevil stunt—was just part of the job.

“Somewhere half-way up the pots you realize, we’re not in Kansas anymore,” Mattsen says. “And if you are willing to do it again, you’re hooked.”

He was. Still is, though now in his mid-50s, Mattsen has shifted his burden of commercial fishing’s inherent risk from physical to financial. Through Mattsen Management LLC, a firm he launched from the Foster School MBA Program, he now owns three fishing vessels that reap mountains of crab, cod and salmon from icy Alaskan waters.

Greenhorn days

It was more for adventure than profit that Mattsen began a career in fishing. The Tacoma native originally headed up to

Dutch Harbor, Alaska, after high school with a group of friends to work at a fish processing plant. He returned to graduate summa cum laude from Pacific Lutheran University, tried and rejected law school, then struggled to make ends meet working as a teaching assistant in the UW Economics Department.

To supplement his TA stipend, he returned to Alaska the summer of 1980 to work on a catcher-processor boat. “Sometime that summer I realized that you can be a 40-year-old economist or lawyer or business man,” Mattsen recalls, “but you can’t FALL 2010 27

alumni be a 40-year-old greenhorn deckhand.

That window was rapidly closing on me.”

He traded an academic career for an exhausting, exhilarating, and dangerous life at sea. But he worked hard and soon was fitted with the fisherman’s “golden handcuffs.” He progressed rapidly from deckhand to mate, master and owner. In 1991 he bought into a partnership on his first boat, the Shaman. “It’s not anything you ever would have expected or dreamed of,” he says. “But it suited me.”

Risk and reward

As captain of the Shaman, Mattsen led in extremis, navigating his crews through unthinkable weather and roiling seas during the manic heyday of the old “Olympic” crabbing system, where hundreds of boats would race to harvest as much as possible before the fishery’s quota was filled.

He bore the risks, but also reaped the rewards. “There are times when you work awfully hard and don’t get much in return,” Mattsen says. “But when the resource gods and the market gods and the economy gods and the foreign currency gods all conspire, it can seem like this job is a license to print money.”

His biggest windfall came when the fishery moved to an individual quota system, and Mattsen decided to sell the Shaman and its quota of fishing rights.

Not yet 50, Mattsen was ill-equipped for retirement. He didn’t know what to do with himself. So he decided to educate himself to handle his good fortune.

Captain Dan the MBA

Stratospheric test scores and a colorful back story got him in the door at Foster.

But he was a bit out of his element initially. “I remember an admissions officer asking me how well I work in teams,” Mattsen says. “I told her, ‘I work great in teams. The problem is that my teammates are always of my choosing—and I’m always in charge.’ ” While the collaborative nature of the Foster MBA was a culture shock, the intensive use of modern technology left him feeling like a relic of the 1970s.

28 fo s t e r BUSINESS

When last he was in school, papers were composed on typewriters and computing required punch cards. “Excel was a mystery to me,” he admits. “Powerpoint?

Didn’t even know what it was. That first quarter was a struggle.”

But Mattsen was a quick study. He learned to collaborate, mastered the technology, and “Captain Dan” soon became a favorite character in the program.

He gravitated toward finance courses, and capped his education with a practical independent study when an opportunity arose to return to commercial crabbing.

“I decided that I didn’t really want to be the oldest member of Goldman’s entering class, or whatever else I might have landed,” he says.

Call of the sea

Under the guidance of associate professor Lance Young, Mattsen applied some sophisticated financial methodology to analyze the purchase of the Scandies Rose, a 130-foot fishing boat with a regal share of king crab quota. The deal closed just before graduation.

Now Mattsen hires captains and crews to run each of his three boats. It’s not easy just owning, not operating. As he sits in the wheelhouse of the Scandies Rose at dock in Seattle with his ever-present dog, Nippers, perched on his shoulder, he’s visibly restless, caught between the wisdom of his years and the tidal pull of the sea.

“There’s an old saying that there are old fishermen and bold fisherman, but there are no old, bold fishermen,” says Mattsen. “I’m no longer a bold fisherman.

Looking back on at some of the chances I’ve taken—measured chances, but with real risk—it gives me pause.

“But there’s a reason that people like me are drawn to this business. I don’t think there’s any more fun you can have in life than seeing a full pot of king crab come over the rail, and knowing you’ve got another pot right off the bow…”

Mattsen’s voice trails off, and his eyes pan across the deck and beyond, to the water.

“It’s a different world out there.” n

EVENTS CALENDAR September 23 Passport to the World: 20 years of Global Business Education October 8 – 10 MBA Reunion Weekend: Honored years 1985, 1990, 1995, 2000, 2005 14 Business Leadership Celebration: Keynote – Mark Parker, President & CEO of Nike, Inc. 15 PACCAR Hall Building Dedication (registration required) 27 Premiere of Fostering Leadership TV program November 4 Annual Scholarship Breakfast December 2 UW 2010 Minority Business of the Year Awards Banquet February 2011 14 – 18 Global Social Entrepreneurship Competition (GSEC) March 2011 31 UW Environmental Innovation Challenge (UW EIC) Visit foster.washington.edu/events for details and more events.

Steady as He Goes Tom Crowley deftly navigates Crowley Maritime through a third generation Leadership, not finance

“People like to remind me that it takes three generations to make and lose a family fortune,” laughs Thomas Crowley (BA 1989), CEO, president and chairman of Crowley Maritime Corporation, the shipping, logistics and marine services company founded by his grandfather and grown to international prominence by his father.

Crowley is keenly aware of the unique challenge of sustaining a family business on a global scale. In fact, he’s expanding it.

After nearly 16 years at the helm, Crowley Maritime is a $1.5 billion company with more than 200 vessels—mostly tugs, tankers, and barges—and 4,300 employees across the world primarily engaged in container shipping and logistics; petroleum transportation and distribution; ocean towing; harbor tug services; vessel design; ship management; and marine salvage.

Expedited succession

Crowley first worked for the family business at age 16 as a ticket collector on its Red & White Fleet of passenger ferries in the San Francisco Bay—the same place that, back in 1892, a 17-year-old upstart named Tom Crowley invested his life savings in a Whitehall row boat and set out to make his fortune transporting mariners and provisions to and from ships at anchor.

Nearly a century later, Tom Crowley’s grandson has tasted every aspect of the modern Crowley Maritime while attending the UW. He worked as a barge mechanic in Seattle Harbor, a deckhand on an Alaskan tug, a dock worker in Prudhoe Bay, and also interned in accounting, sales and marketing.

After graduation from Foster, as his roommates retreated to Sun Valley for a summer of fun, Crowley boarded a plane to Florida to begin a management training program at the company’s East Coast headquarters. “I don’t know why I didn’t go with them,” he says. “But in hindsight, I’m lucky that I didn’t. Because, as it turned out, I didn’t have a lot of time.”

His father, then CEO of Crowley Maritime, died after a recurrence of prostate cancer in 1994. Thomas Crowley, Jr., was 27 years old and five years out of college when he was named the company’s chief execuitive.

Circumstances—and maybe fortune— prepared him as thoroughly as possible for his premature accession. After supervising stevedores in Jacksonville and managing ferries in San Francisco, he had joined the corporate office in Oakland. “The last two years my dad and I spent together were invaluable,” Crowley says.

Crowley quickly found his footing, leaning on a strong and veteran senior executive team.

He reorganized the company, refocused its existing maritime operations on the US West, East and Gulf Coasts, and strengthened the company’s position in Central America and the Caribbean with expanded container shipping and logistics services.

He also extinguished a major family crisis. After a sell-off by minority shareholders diluted the family’s control, Crowley Maritime was forced to go public in 2000.

Faced with exorbitant accounting costs post-Enron, Crowley executed the rare maneuver of taking a public company private again.

“Having consistent management over long periods of time gives us the patience and courage to carry out strategic plans,” he says. “We’ve certainly learned the value and advantage of being a family business, and built on that.”

He’s also come to appreciate his firm financial foundation from the Foster School, which has allowed him to focus on building corporate leadership, strategy, culture and values.

Crowley: the Next Generation

Developing leadership across the company is a means of self-preservation for Crowley, who found himself directing a billion-dollar family business so early in life.

It’s about pacing and priorities. And spending time with the fourth generation of the Crowley clan. Crowley’s father never pressured him to join the family business, and he’s determined to avoid piling ponderous expectations on his own children, ages 10 and 12.

“One of my biggest challenges,” he says, “is to be as clever as my dad was at getting them interested without scaring them off.”

Fortunately, they love the business—even bask in the gory details of life at Crowley Maritime. “It’s a family business,” Crowley says. “It’s fun. It makes coming to work a lot more than just getting a paycheck.” n FALL 2010 29

alumni

Learn Locally, Expand Globally Starbucks CMO Annie Young-Scrivner has a vision for the global brand Before she joined Starbucks as its Global Chief Marketing Officer in September 2009, Annie Young-Scrivner (BA 1991) was already well versed with the company as a customer. No, that’s not quite right, more like a fan.

Having worked in 27 countries, she’d made a habit of seeking out the local Starbucks while on the road, and collecting a souvenir mug from each destination. Then trouble struck in Turkey. She waited until her departure to buy a mug (they are heavy and breakable, after all). The airport Starbucks didn’t carry mugs. Luckily, a friend working in Turkey called to ask if there was anything she wanted—“yes, a Starbucks mug from Istanbul!”

Born in Taiwan, but raised primarily in Seattle, Young-Scrivner recalls her longtime fondness for Starbucks. “It’s a friendly, cozy vibe that isn’t forced,” she says. “The company has grown a lot, but you can still go into the store near you and they know your name and your drink.”

That ability—to provide a consistently positive experience, yet localize it to various neighborhoods, countries and even cultures—is part of what guides her vision for new markets across the globe.

Young-Scrivner’s role requires her to stay on top of where Starbucks is in its brand lifecycle, evaluate the elasticity of the brand—where can it expand, where will it break?—and clearly understand what customers want and expect.

Having recently returned from a trip to China, she shares an anecdote about how “the Chinese don’t want us to bring them local food and drink, they want an American/international experience. But the global taste profile has to match the Chinese taste palate.”

So, after extensive customer research and testing, Starbucks concocted a black sesame green tea Frappuccino that became an instant hit.

30 fo s t e r BUSINESS

“Successful expansion of Starbucks on a global level demands that we stay true to our values—of which treating our partners well is paramount; our partners (as Starbucks refers to all employees) are the linchpin. Leveraging our unique model of retail store, consumer products, and the emotional connection to our store partners and social/digital media presence makes Starbucks’ communication more effective and authentic,” Young-Scrivner states.

To this end, she is also dedicated to cultivating a world class talent pool so that Starbucks continues to be driven by smart, passionate partners who understand and live the brand.

Global expansion. Brand management.

Strategic recruitment. All of this may seem like a lot to handle, but Young-Scrivner has been in business for a long time now. She started young, learning the value of money by picking strawberries. She graduated to babysitting, and then retail, where she worked at Mariposa and the Bon Marche.

At age 15, she was sure of two things: she wanted to go to the UW, and she wanted to

go into business. She delved deeply into the Foster School, and was heavily influenced by senior lecturers Judith Edwards (sales and marketing) and Judith Kalitzki (business communications).

An internship at PepsiCo found her pondering how best to display a new “lite line” from Frito Lay on retail shelves. Things were going well, and then they got even better. In her senior year, she received a scholarship from PepsiCo and undertook an analysis of population trends in the Northwest. In 1991, when it came time to graduate, she had opportunities at three great organizations: R.R. Donnelley, AT&T, and PepsiCo. She ended up going with PepsiCo, not because of the familiarity accrued during her internship, but because it offered the best opportunity to grow at a fast pace and experience global business first-hand.

During her run at PepsiCo, YoungScrivner garnered awards for the organization; started an Executive Women’s Network in Shanghai (while president of the Greater China business for PepsiCo Foods & Snacks); and took time to pursue her MBA, via the Executive MBA Program from the University of Minnesota Carlson School of Business. She also travelled the globe, mostly on business, and acquired a skill for maintaining a global customer base that serves her extremely well at Starbucks.

Young-Scrivner believes that her deep connections to Seattle and the UW played a strong role in positioning her to become CMO of the company whose brand she’s admired for so long. She’s eager to give back; and has expressed an interest in mentoring students, specifically in the field of sales management and marketing. For now, she has her hands full raising two children, Sebastian and Nicolette, with high school sweetheart-turned husband, Scott.

And then there’s this global brand to manage… n

It is Your Father‘s Program Jennifer and Mason Sizemore compare notes on their Executive MBAs Foster: How is what you’re learning in the EMBA Program helping you as an executive?

Jennifer: As a member of my company’s executive team, I am one of six votes making the final decision on everything from strategy to acquisitions, and I’d like to bring as much firepower to that as possible. I have my journalism and management experience to draw on, and now this program is giving me the grounding in business principles and strategies that I need to more fully analyze the challenges we face.

Foster: Mason, what impact did the EMBA have on your career?

When she read who referred Jennifer Sizemore (MBA 2011)—vice president and editor-in-chief of MSNBC.com and an executive producer at NBC—to the Foster School’s Executive MBA (EMBA) Program, director Louise Kapustka had to smile.

Not only was the person who told Jennifer about the program a former long-time newspaper executive at The Seattle Times Company and a member of the first EMBA class to graduate from Foster 25 years ago, but that person was also Jennifer’s father.

“When Jennifer first approached the program two years ago, she didn’t make a big deal out of who her father was or his connection to the school,” Kapustka says. “But there was a line on the application asking ‘How did you hear about the program?’ and she simply wrote: ‘Mason Sizemore.’ ” Mason (MBA 1985) joined the Seattle Times as a copy editor in 1965 and after rising through the ranks became president and chief operating officer of the nationally revered and Pulitzer Prize-winning newspaper in 1985, the year he earned his MBA. He held that executive position until his retirement in 2001.

Jennifer spent years at the Times’ former long-time competitor, the Seattle Post-Intelligencer. She left the P-I in 2004 as assistant

managing editor to become deputy managing editor for news at the Houston Chronicle and then joined MSNBC.com in 2005 as deputy editor for news and quickly rose to the top news executive position.

“Their story has special significance for us because it demonstrates how the program has built on its track record and constantly evolved,” says Kapustka. “It was relevant to the challenges Mason faced as a news media leader in the 1980s, and remains relevant to the challenges Jennifer faces today, even as the industry is going through dramatic changes.”

To help us tell their unique story, Foster Business conducted a Q&A with the Sizemores: Foster: Where do you see the news industry heading?

Jennifer: There has never been a more interesting time to be in the news business. We’re all trying to figure out where it’s heading, and the speed of the changes insist that we make more than one bet at a time and hope we’re headed in the right direction. We have to figure out not only the news gathering and delivery challenges, we have to find and create whole new business models. It’s frightening and exhilarating at the same time.

Mason: It opened new vistas for me professionally and personally and paved the way for me to move from a journalism career to becoming president and chief operating officer at the Seattle Times. And it gave me the opportunity to form lifelong friendships with some very smart and amazing people who were my classmates. The program changed my life.

Foster: What are your thoughts on challenges facing journalism today?

Mason: Journalism principles of 25 years ago haven’t changed, but the delivery of news and how it is gathered today is an entirely different proposition. No one, even the best minds in the EMBA Program, could have predicted the rapid upheaval in the business side of journalism. In my day, newspapers were a mature, stable, profitable business. Today the Web has captured much of the revenue base for newspapers and local television stations, and the future of traditional journalism businesses is uncertain. However, I have no doubt that the thinking processes imbedded in today’s EMBA Program could find new business models to ensure the continued success of journalism enterprises.

To read the whole Sizemore Q & A, visit foster.washington.edu/sizemore. n FALL 2010 31

alumni

Lemons to Lemonade Angelica Macatangay’s degree journey

Angelica Macatangay’s (BA 2010) drive to succeed was inspired like this: She was a smart, 17-year-old high school grad in Guam holding acceptance letters to three top-tier private colleges when the doors to opportunity slammed shut. With three siblings who had gone to college ahead of her, and her parents looking for work in the US, Macatangay graduated high school alone in Guam knowing the price of college was beyond her means because her parents couldn’t afford it.

Disappointed, she rejoined her family in Seattle where her next oldest sister had just graduated from Seattle University.

“When I got out here, I had some animosity,” she says. “I was the only child left and everyone else got to go to school and I was pretty upset about it.” The sting of that first blow motivated Macatangay even as she prepared to graduate with a BA from the Foster School in June, garnered a top-level finish in the 2010 National Collegiate Sales Competition, and landed a consulting job at Oracle, one of the world’s most prominent software companies. “Knowing that I couldn’t go to school at that time, knowing that I had that 32 fo s t e r BUSINESS

opportunity and I couldn’t take it killed me,” she says. “I told myself I am not going to ever let that happen again.”

When she arrived in Seattle, she quickly landed her first job. She lived with her parents for a month, then got an apartment with a coworker and landed a second job.

Although it would be two years before she could afford to go to Bellevue Community College (BCC), Macatangay kicked off her informal education. “I told myself, if I can’t learn through school, I am going to learn through work. I was looking to find companies where I was able to work hard and be promoted so that I could learn all I could about their business.”

Macatangay’s path to Foster almost ended with her early success in business.

Working in a modeling agency generating client leads, supervising the front desk at an upscale beauty salon, managing aspects of an English language service, and leading in sales at a Bellevue boutique, Macatangay had many opportunities to advance her career without a formal education. One opportunity was a $40,000-a-year job in California. Her quandary: Why not skip college and make money now?

But when she thought about it, that stinging disappointment in Guam reminded her she wanted to make sure she didn’t limit herself and that an education was the best way to ensure as many options as possible. So she finished at BCC, transferred to the University of Washington, and applied to Foster.

Then came the day she opened her mailbox and found a letter carrying the Foster logo. Her heart sank. The envelope was so small, so normal looking that it couldn’t be good news. She was too panicstricken to open the letter, so she called a friend. With her dog by her side and friend on the phone, she read the news—Foster had accepted her.

“Before I got in, people would refer to Foster as Balmer High and I had no idea what they were talking about. And then I came and I said, Oh, god! I see it. There was definitely a sense of community,” Macatangay says. “I knew when I walked into the business school that they were all business students. You could feel the tension and the competitiveness.” The highintensity of the students matched her own drive and she thrived. She also continued to work nearly full-time until well into her senior year when she jumped at the chance to compete in the National Collegiate Sales Competition. After six months of grueling preparation, she and fellow Foster senior Kaitie Fisher teamed up to take second place, beating teams from more than 59 US universities. Recruiters at Oracle spotted Macatangay at the competition and brought her in for interviews and hired her.

As an Oracle sales consultant, she says, the learning curve will be steep. But that environment suits her perfectly. “In a sense, there will be an endless hallway with a ton of doors and I think I find comfort in that.”

Her newest dilemma? “How many years do I want to work before I get my MBA?” n

“I arrived at the Leadership that Shapes the Future seminar with two goals in mind – to learn at least one new and relevant tool which would challenge me and I could immediately apply as I lead my organization into the future; and to network and build relationships with the other participants. I was thrilled to find that I accomplished both goals. As a nonprofit leader I felt this seminar focused on leadership skills that transcend across all organizational levels and any business, non-profit or for-profit.”

Melany Brown Executive Director EA alliance of nonprofits

Gain a leading edge.

The FOSTER EXECUTIVE SEMINAR SERIES offers focused professional development programs designed specifically for senior managers and executives. Grounded in cutting-edge, real-world experience, Executive Seminars deliver practical knowledge and relevant skills – giving you an edge in today’s rapidly evolving economy.

Fall 2010 Seminars: Leadership that Shapes the Future – October 5-7, 2010 Strategies for Effective Negotiations – November 18-19, 2010 Finance and Accounting for Non-Financial Executives – October 27-29, 2010

Learn more at foster.washington.edu/execed or call 206-543-8560.

Think differently.

Make a difference.

It’s the Washington Way.

足N onprofit Organization U.S. Postage

PA ID Seattle, WA Permit No. 62 ADVANCEMENT B ox 353200 S eattle , Wa 98195-3200

foster

Fa l l 2 0 1 0