Study considers how a seemingly risky investment can reduce risk.

Robert Daigler

From the most naïve investors to the most sophisticated, people want the value of their investments to increase. Unfortunately, everyone—from that naïve investor on up to those who manage money professionally—knows that there’s no magic formula for maximizing return with the lowest possible risk. Along with financial advisors, finance scholars look at investment strategies, trying to detect associations that might guide investors toward a better risk-return portfolio.

Surprisingly, one potential investment that can actually help to reduce risk is a risky one—one that measures uncertainty in the market and the subject of a study by Robert Daigler, Knight Ridder Research Professor of Finance in the College of Business Administration.

“People watch the market go up and down—what we call ‘volatility’—but, until recently, they could not do much of anything other than watch,” he said. “Three years ago, a futures instrument was introduced on the VIX (volatility index). This instrument enables investors to buy and sell stock-market volatility.”

Questions immediately arise about such investment opportunities. Since most people do not like uncertainty in the market, why would they want to invest in it? How does one invest in something as intangible as a concept? And where would such an investment fit into a portfolio striving to reduce risk?

“One reason people will invest in something like volatility is that it gives them a chance to offset negative returns in the stock market rather than simply observe the market's,” Daigler said. “Futures and options contracts on the VIX allow individuals to trade a concept such as volatility, even though the volatility is not a true asset as are stocks, bonds, and real estate. Meanwhile, institutions have been able to trade volatility in over-the-counter instruments called variance swaps for years.”

To tackle the issue of why a risky investment, which even bears a name that points to its uncertainty, should be included in a portfolio to reduce risk, Daigler and Laura Jaramillo Rossi (MSF ’04), then a student in the college’s Master of Science in Finance (MSF) program and taking Financial Risk Management, analyzed historical data on the VIX to see what patterns would emerge.

Research zeroes in on the relationship between the S&P 500 and the VIX.

“We know that, on average, when the S&P 500 goes up, the VIX goes down, and when the market goes down, the VIX goes up,” Daigler said. “So, since the two go in opposite directions, they at least partially offset each other. If the market goes down, the fact that the VIX goes up makes it a good instrument to compensate for stock losses—mitigating, for example, the consequences for investors when the NASDAQ lost more than 75 percent of its value between March, 2000, and the end of 2002.”

The article assumed that people put most of their money into the S&P 500 portfolio of stocks. The researchers then looked at what percentage of their funds should be allocated between the stocks and the VIX in order to minimize risk by applying the Markowitz Portfolio Theory to the data.

“Harry Markowitz won the Nobel Prize for economics in 1990 for the theory he published in 1952,” Daigler said. “The underlying idea of portfolio theory is that if you have a negative correlation between two assets, you can design the best combination to minimize risk. Our idea was to apply the portfolio theory concept and see what happened. What we found by analyzing the data is that the best combination for using VIX to minimize risk is 90 percent in stocks and 10 percent in the VIX.”

Titled “A Portfolio of Stocks and Volatility,” the study was published in The Journal of Investing, a leading practitioner journal in the finance field. Daigler is working with current and past graduate students on related research, including various aspects of the VIX futures contract, diversification with commodities, and the impact that the general public has on the volatility of futures markets.

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College partners with banking industry to offer anti-money laundering compliance training.

Members of financial institutions facing increased pressure from the federal government to comply with anti-money laundering (AML) regulations got good news on February 13, 2007: a new—and possibly unique—partnership between industry and an accredited academic institution will make the task easier. A joint announcement from the College of Business Administration and Florida International Bankers Association (FIBA) to more than 1,000 financial institution representatives revealed a partnership between the two to provide AML compliance training.

The announcement represented the culmination of several years of effort on the part of a number of individuals, with the college’s Emmanuel Roussakis, director, Master of Science in Finance (MSF) program and graduate certificate programs in banking, initiating and facilitating the discussions.

Joyce J. Elam

“Marcos Kerbel, chair of FIBA’s education committee and an adjunct professor in the college’s Department of Finance, wanted the college to get involved in AML compliance training, which FIBA has offered for more than twenty years,” said Roussakis, who was the first FIBA-endowed professor, has actively engaged in banking research, and has taught seminars for bank executives and courses in the college for more than 25 years. “I took the initiative to get the college to play a larger role in the training of members of the financial industry in South Florida and to reach out to professionals and executives in Latin América. I had conversations with Simon Amich, president of FIBA; Executive Director Pat Roth, and Kerbel.”

Joyce J. Elam, executive dean of the college and vice provost, FIU Online, made the announcement during FIBA’s Annual AML Compliance Conference. Under the partnership, FIBA will provide the instructors and course materials for the training program and the college will provide space in its Downtown Center and will issue certificates to those who successfully complete course requirements. The intent is to launch the program under the auspices of the college’s Executive and Professional Education (EPE) office, directed by Robert Garcia (EMBA ’97).

“FIBA is one of the leading organizations in the financial arena, offering recognized training programs that bring institutions closer to the high standards regulators impose on banks in the United States,” Elam said. “It is a natural fit for us to partner with such a reputable group to continue enhancing our offerings and grow partnerships with the financial community in Florida and abroad.”

FIBA representatives express their enthusiasm about the significance of the partnership.

Joyce J. Elam

“As of late, regulators have been targeting banks that don't properly mitigate money laundering risks associated with correspondent banking activity, which allows the international movement of funds and is the backbone of global trade,” Amich said. “Through our prestigious partnership with the college, this program will give banking institutions the necessary tools to protect their businesses and be in compliance with federal regulations against money laundering.”

According to Roth, “As far as we know, this is the first agreement in the country between industry and an accredited university to offer an AML compliance certificate. The certificate program reflects the importance to the government of AML and terrorist financing within the financial sector and will enable us to take compliance to another level. Through the certification—which will serve as an outward manifestation of our members’ level of knowledge—we will be able to formalize what many people already are doing.”

“This is a historic occasion for both partners,” Kerbel said. “It shows the commitment of FIBA to education and the commitment of the college to financial services and compliance. There was tremendous interest at the meeting, indicated by the fact that we received about 400 business cards from attendees, many of them from countries such as Brasil, Cayman, Colombia, and Mexico.”

The program will roll out in mid-May, 2007, with plans for an online version to be ready by June, 2007, for members of those institutions based in Latin América who wish to participate and become certified by the college and FIBA. The next step will be to develop the course in Spanish and Portuguese to accommodate the needs of international bankers.

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College captures second contract with the Inter-American Defense College.

The College of Business Administration has begun work on a ten-module, graduate-level online training program on civil-military relations for the Washington, D.C.-based Inter-American Defense College (IADC). The project brings together the expertise of FIU Online and the Knight Ridder Center for Excellence in Management to create the program, which is aimed at senior-level military officers across the Western Hemisphere.

David Wernick

“This is the second time we have worked with IADC, an international educational institution operating under the aegis and funding of the Organization of American States (OAS) and the Inter-American Defense Board,” said David Wernick, an instructor in the Department of Management and International Business. He co-authored the first course on national security and defense policy and will coordinate the new project.

Initial course draws high praise and many hits.

In January, 2007, Wernick; Moe Izadpanah, director of FIU Online; Eunbae Lee, instructional designer, who will oversee all of the technical aspects of the new course’s design and development, as she did on the first project; and Felix Martin, an associate professor of international relations with expertise in Inter-American and Iberian studies, met with key figures from IADC at Fort McNair in Washington, DC.

“We sat down with top brass, including Major General Keith M. Huber, chairman, Inter-American Defense Board and IADC director,” Wernick said. “The first course exceeded all their expectations and is having a broad impact, with hits from Latin América, which they had anticipated, plus from Europe and elsewhere.”

Although the content for the new project will be entirely new, the audience will again be senior-level military, and the university team, which also includes Fernando Tazoe, technology research specialist, who will assist with electronic content preparation and conversion, will be able to build on their experiences in creating the first set of modules.

“We have agreed to have the course completed by the end of August, including its translation into Spanish and Portuguese, and to have it online by the fall,” Wernick said. “We will be able to use our knowledge of the format that worked so well with the first course to create the new program, which will examine the challenges that hemispheric governments face in attempting to deepen democratic institutions while managing internal and external security threats."

Multiple relationships meld.

The project shows how cross-discipline relationships can work to everyone’s advantage.

“We’ll be able to leverage both the knowledge and expertise Dr. Martin and I have on global security issues with the university’s impressive online capabilities,” Wernick said. “In terms of our relationship with IADC, we established our credibility the first time around, working hard and delivering a product they’re really happy with. At this point, we know what IADC is looking for, and they know what we’re capable of, so it’s a good fit, and it’s quite gratifying to start a second project based on the success of the first.”

Knight Ridder Center Director, Ed Glab and Izadpanah recently submitted ideas for two additional graduate-level distance-learning courses to the IADC, focusing on the issues of international money laundering and global energy security.

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Forum explores what it takes to keep a business “all in the family.”

Starting a business together can be an equally daunting and enriching experience for any family. Keeping that business successful from generation to generation often brings a whole new set of challenges and rewards.

More than thirty representatives of local family enterprises were eager to join a discussion that delved deeper into this very topic at the recent Family Business Forum held at Chispa Restaurant in Coral Gables on January 30, 2007.

Hosted by the college’s Eugenio Pino and Family Global Entrepreneurship Center, the event featured a live case study format that focused on MIC Food, a twenty-year-old, second-generation family enterprise owned and operated by the Lardizabal family.

Alan L. Carsrud and Alfredo Lardizabal

Founded in 1987, MIC Food specializes in the production and importation of frozen plantain products as well as yucca, mango, papaya, and pineapple fruit products designed to bring a taste of the Caribbean to any kitchen. Corporate headquarters, along with sales and marketing operations, are based in Miami, and production plant facilities are located in Costa Rica and Honduras.

Three family members were on hand for the event to share their different experiences and insights about life inside and outside the family business: Alfredo Lardizabal (BBA ’94), vice president of sales, MIC Food; Maria Lardizabal-Krogh, vice president of marketing, MIC Food; and Cirabel Lardizabal Olson, director of diversity, multicultural, and governmental relations for Burger King Corporation.

Alfredo Lardizabal

“The intent of this forum was to explore the strategies and techniques used to encourage an entrepreneurial mindset among the next generation of family members within the family enterprise,” said Alan L. Carsrud, executive director of the Pino Center, and moderator of the panel. “The ability to identify new market trends and opportunities plays a key role in enabling family enterprises to thrive through multiple generations of leadership.”

Discussions ring true for anyone who has worked in a family business.

“I’ve attended the Pino Center’s Family Business Forum events before,” Lardizabal said. “I always found the topics relevant to my family’s own experiences, so I thought it would be equally worthwhile to be on the other side of the table and talk about where our family’s business has been—and where we hope to go.”

Mr. and Mrs. Alfredo Lardizabal Sr., parents of the speakers

Lardizabal was joined on the panel by one sister who works for MIC Food and one who does not.

“While my one sister, Cirabel, does not work in the family business, she still has a vested interest in the successful future of the company,” he said. “Her strategy has been to go out into corporate America and share what she learns along the way. Her insights are very valuable. Her opinion is one we trust.”

During the panel discussion, the Lardizabal siblings talked about the importance of keeping the lines of communication open between parents and children who are working together.

“My father travels often, overseeing the production side of the business,” Lardizabal said. “But we still try to meet regularly to make sure we are all on the same page.”

At one point, the discussion turned to what Lardizabal describes as one of the more difficult challenges they have had to face together as a family in business: succession planning.

Cirabel Lardizabal Olson, center.

“We’re in the middle of that right now—and it’s not an easy process,” he said. “But it’s key to have a plan in place to guide you as you move the business forward from one generation to another.”

As the panel discussion drew to a close, audience members were invited to participate in a question and answer session.

According to Lardizabal, one of the questions really hit home.

“We were asked how we handle the hierarchy of decision making—who has the final say and why,” he said. “The best answer comes around again to communication—and staying committed to working together to achieve consensus.”

Forum fosters growing sense of community among area’s family-owned businesses.

Maria Lardizabal Krogh

The recent Family Business Forum is the first of a series of three planned for this year. The ongoing series is clearly making a positive impact within the local business community.

“We are delighted to see many familiar faces coming again and again to the Family Business Forums,” said Colleen Post (MBA ’03, BFA ’00), the Pino Center’s associate director and adjunct professor in entrepreneurship, management, and international business. “Right now, there really is no other vehicle in South Florida that offers such an open, relevant forum for sharing the experiences that are unique to family businesses.”

The Ewing Marion Kauffman Foundation sponsored the event. The Coral Gables Chamber of Commerce and the College of Business Administration’s Business Alumni Chapter were partners for the event, with many members from both organizations in attendance.

For more information about upcoming Family Business Forums or to learn more about Florida International University's Institute for Family Business, visit: http://www.entrepreneurship.fiu.edu/family_business.htm.

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International Business Honor Society enters new phase.

Since its founding in the College of Business Administration, the International Business Honor Society (IBHS)—the first honor society for international business in the United States—has had the vision to be the leading honor society in the world for motivated and globally-focused students with an interest in international business.

Mark Elbadramany

Recently, the college’s IBHS was designated as the national, or model chapter, empowered to charter other IBHS chapters worldwide. To date, chapters have received charters at universities in Thailand, Monaco, New Jersey, and New York. Most recently, St. Mary’s University, in San Antonio, Texas, was chartered, and a number of others are in the works.

“Once we charter the group, they draft a constitution and by-laws using a template we provide, and then we give them final approval,” said Mark Elbadramany (BBA ’06), founding member of the IBHS and past president of the college’s chapter.

IBHS chapters from around the world will work together globally.

A signature feature of the college’s IBHS is the Global Leadership and Service Project (GLSP), which takes future business leaders to other countries to engage in a community service project. The third GLSP to Thailand occurs this month, and it will bring students from the college, as well as a scholarship winner from Auburn University, to Bangkok, where they will work at Children’s Creativity Foundation (CCF), a community pre-school, and at a Bangkok center for mentally challenged children. The students will accomplish the work in collaboration with service clubs from Thai universities, primarily from Chandrakasem Rajabaht University.

“Our goal is to establish a GLSP within every collegiate chapter internationally, and then to use the GLSPs to foster collaboration and participation among chapters on a global scale,” Elbadramany said.

The evolution continues: IBHS to become not-for-profit.

The society currently is in the process of becoming established as a not-for-profit called IBHS, Inc. Elbadramany will serve as its executive director and, once it has been incorporated, IBHS’s chartering activities will shift to the new entity.

“In anticipation of the change, we’ve fine-tuned our web site (www.ibhsonline.com/) and set out roles and responsibilities,” he said. “Once we are officially a not-for-profit, we’ll launch a full-blown marketing effort as we work to create a global network of students interested in international business, to help them with business plans, and to provide them a venue for participating in global projects.”

“The IBHS promotes and facilitates global leadership, economic development, and corporate social responsibility, allowing students the opportunity to create cross-border projects and initiatives,” said Robert Hogner, IBHS faculty advisor and associate professor of management and international business. “Its members are required to perform service to the community and to sign a lifetime ethics commitment.”

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Dual Degree program signs official agreement with University of Puerto Rico.

Through the Dual Degree program offered by the Chapman Graduate School, students obtain an MBA from their home universities and a Master of International Business (MIB) from Florida International University in considerably less time than it would take if they pursued the two degrees sequentially. The Global Dual Degree Network includes 24 institutional members from all over the world—from China to Europe to Latin América—with the University of Puerto Rico (UPR) being the most recent to make its participation official. The signing ceremony took place January 17, 2007, in the office of UPR’s president, Gladys Escalona de Motta.

“The creation of the Global Dual Degree Network is one of the most impressive accomplishments of the college’s Chapman Graduate School of Business in the last five years,” said Chapman Dean José de la Torre, who has recruited schools worldwide. “Those who complete the program have experiences in two different business and economic environments, acquire two networks of friends and colleagues, have access to a second set of employers, and learn what it takes to do business around the world.”

Seated from left to right: Paul Latortue, dean of the College of Business Administration at UPR; Gladys Escalona de Motta, president, University of Puerto Rico, and José de la Torre, dean of the Chapman School; and standing left to right: Emilio Pantojas, director of UPR’s MBA program and Anna Pietraszek (EMBA ’06), associate director of admissions for the Chapman School

De la Torre and Anna Pietraszek (EMBA ’06), associate director of admissions for the Chapman School, attended the signing at UPR, along with Escalona de Motta; Paul Latortue, dean of the College of Business Administration at UPR; and Emilio Pantojas, UPR’s director of the MBA program.

College will host next partner network meeting and CLADEA.

Members of the network gather annually. Last year’s meeting took place in Montpellier, France, in September. This year’s meeting will take place on the University Park campus in October. The network’s meeting will coincide with the 42nd annual meeting of the Latin Américan Council of Management Schools (CLADEA), which the college also is hosting.

The theme of the CLADEA meeting is “'Human Capital and Latin América’s Competitiveness,'” said Jerry Haar, professor, Department of Management and International Business, and associate director, Knight Ridder Center for Excellence in Management. He is serving as the academic committee chair. Papers have been solicited globally and international experts have been invited to present panels during the event, which will run from October 28th through October 30th.

CLADEA has more than 150 affiliated institutions, both private and public, from Latin América, North America, and Europe. Those interested in conference details can learn more at https://cbasys.fiu.edu/bofa/cladea/index.cfm.

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Audience gets electrifying news at lecture.

Charles Whalen, public relations director, Florida Electric Auto Association, with students and his electric car following the lecture on plug-in hybrids

On January 24, 2007, the day after President Bush’s State of the Union Address in which he backed off from his strong statement that “America is addicted to oil,” Sherry Boschert, author of Plug-In Hybrids: The Cars that Will Recharge America, spoke to a packed classroom on the University Park campus of Florida International University.

“In his speech, the president said more research needs to take place on batteries and that biofuels have more advantages,” she said. “This position won’t make car manufacturers do much.”

To date, major car manufacturers haven’t taken the lead in producing electric cars, which are cheaper to run, produce zero emissions, and dramatically reduce dependence on oil—even though the technology exists and some companies have made some efforts.

Charles Whalen, public relations director, Florida Electric Auto Association, with his electric car

“Electric cars run on domestic power,” Boschert said. “We’ll never go to war over electricity.”

Research counters manufacturers’ assertions.

Manufacturers claim that they haven’t been producing electric cars because no one wants them, the batteries aren’t good enough, and they’re too expensive, she said.

Yet, in her research for the book, Boschert—who installed solar panels on her house in not-too-sunny San Francisco in 1997 and generates so much power that she sells it back to the grid at 35 cents per kilowatt hour and purchases what she needs at off-peak hours for four cents per kilowatt hour—discovered ample proof to dispute each point.

During her talk, she referenced the documentary Who Killed the Electric Car? It examines the multiple interests that ended up pulling off the road a zero-emission vehicle manufactured by GM and much loved by the many people who leased them.

An electric car owned by Charles Whalen, public relations director, Florida Electric Auto Association

The documentary, and her book, point to the large numbers of people who do want electric cars, including those who watched their GM electric cars towed off and taken to a remote site where they were crushed. As part of their effort to keep the cars on the road, supporters created waiting lists, with thousands of names to demonstrate to GM that the demand existed.

She also offered evidence for the reliability and availability of batteries today—enabling drivers of hybrids to use 61 percent less gas.

The question of expense may be the manufacturer’s strongest argument, but Boschert cited statistics showing that people are willing to pay more to drive cars that don’t pollute and don’t rely on fossil fuels.

“New technology is always expensive,” she said. “Look at cell phones, computers, and flat screen televisions. But people bought them, and besides, when any commodity is mass produced, the costs go down.”

Amy Mehu

According to her, the cost for a plug-in hybrid could be 10 to 15 percent more than that for a standard hybrid. But, she pointed out that people have to look at “well to wheels”—that is, the real cost to produce oil and get it to the car. By that measure, electricity is far, far cheaper.

In her remarks, she cited many grassroots organizations that are making inroads in alternate energy usage, such as wind, singling out Austin, Texas, as America’s cleanest city and noting its motto: “West Texas wind versus Mideast oil.”

Electric car makes appearance.

Following the talk, students had the chance to see, and even drive, a fully- electric Toyota RAV4 EV, brought to campus by Charles Whalen, the public relations director for the Florida Electric Auto Association (www.FloridaEAA.org).

“The car has different gauges, since there’s no gas gauge but, rather, an electricity gauge,” said Amy Mehu, a senior majoring in environmental studies, who took Whalen’s car for a spin around campus. “It doesn’t make the same noises as my Honda Accord.”

Robin Escobedo, who is majoring in environmental science and liberal arts and will graduate this year, didn’t have time to take a drive, but liked the lecture because it fit in with his current studies on sustainability and renewable energy.

“I liked hearing her reiterate what I know,” he said, “and I talked to her after the lecture to tell her about a movie I saw about cities replacing trolleys with buses.”

Boschert provided the audience with many ways to up the pressure on the car companies. For example, at www.pluginamerica.org, her organization’s resource-filled web site, visitors can find phone numbers of the auto manufacturers so they can place a call saying, “I want a car that gets 100 miles per gallon and I won’t buy a new car till I can get one . . . in other words, ‘no plug, no deal.’”

The lecture was presented by the Center for Energy and Business in the college’s Knight Ridder Center for Excellence in Management and by the Department of Environmental Studies. It was sponsored by the Jack D. Gordon Institute for Public Policy and Citizenship Studies. Both a video and audio podcast of the lecture are available at http://business.fiu.edu/media/.

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Move over Academy Awards: Here comes BizFest.

Students realize more and more that future employees will want to see not only good grades but also evidence of their participation in the life of the College of Business Administration. BizFest—the major recruitment event for business student organizations—brings all the organizations together on the south lawn of the Ryder Building so that not-yet-members can learn why and how to become members. The gathering typically includes food, competitions, and entertainment.

When students gathered this year for BizFest, they got a taste of both Chinese food and Hollywood. The theme was movies, and each organization showed its talent at decorating, drawing others to tables representing Indiana Jones, Charlie and the Chocolate Factory, Money Talks, Pirates of the Caribbean, Wall Street, and The Castaway.

Target sponsors BizFest, seeing its value as a networking event.

Not only does BizFest give business student organizations the chance to recruit, but also, it was a venue for Target, which sponsored the event for the second consecutive year, to meet potential employees.

“We wanted to have direct interactions with students so we could dispel myths about retail and talk about opportunities at Target in South Florida, all of which are executive level opportunities,” said Jordan Sembler, Target group campus recruiter. “Five of us probably talked to fifty students, a number of whom came by a career fair shortly afterwards to get more information.”

Students compete for prize money to swell their organizations’ coffers.

“BizFest included a competition that netted a $400 prize for the winner to support their events,” said Anezka Martinez-Rios, assistant to associate dean of the Landon Undergraduate School, Clifford R. Perry, who came up with the theme and gained the consensus of the Business Student Council (BSC) to which all the student organizations belong and whose activities she helps guide. “Each participating organization received up to $50 to decorate the tables, and the table presentations were part of their score.”

The other two components of the competition were a quiz show and a scavenger hunt. The quiz show tested students on areas outside business, and the scavenger hunt took teams around the campus for an hour and ten minutes to find an array of information and items. José Toscano (BA ’97), former assistant director, career services, hosted the quiz show and judged the contestants in the scavenger hunt.

The FIU Accounting Association (FIU-AA) won the $400 prize, with the American Marketing Association (AMA) ranking second and winning certificates and goodies worth more than $100.

BizFest took place on January 23, 2007, from 11:00 a.m.-3:00 p.m. Four hundred Chinese meals were served, and members of the cast of the campus Theatre and Dance Department production of Something Funny Happened on the Way to the Forum, and the Dazzlers, performed.

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Telefónica and college exchange expertise to benefit each other.

Through its offerings, the college’s Executive and Professional Education (EPE) office provides an array of programs that satisfies the needs of many different kinds of professionals and their organizations. And if a company has a particular requirement that the full complement of standard programs does not meet, faculty members can tweak a program or completely tailor one for it.

Telefónica participants in finance training on the University Park campus

The latter was the case with Telefónica, which recently concluded a multi-part program created for it and delivered partially at its site in Puerto Rico and partially on the University Park campus of Florida International University.

The process began with interviews of senior executives—including Pete Pizarro, Telefónica CEO—led by David Weinstein, professor in the college’s International MBA (IMBA) program.

“Together, the principals looked at what the organization needed and came up with a series of courses to address those needs,” said Robert Garcia (EMBA ’97), EPE director. “Our faculty members got to know the company through surveys and interviews that could be translated into course content, and each one was validated with the correct people before it was offered.”

Interactive process creates appropriate offerings to achieve Telefónica ’s goals.

The result for Telefónica was four programs: the one in Puerto Rico, focused on management and education and led by Weinstein; and the three that took place in Miami—one on finance, led by Lewis Davidson, professor, School of Accounting; one on human resources, conducted by G. Ronald Gilbert, associate professor of management and international business; and the most recent, on leadership and communication, presented by Dana Farrow, professor in the Department of Management and International Business and a fellow in the university’s Center for Leadership.

“I had an idea when I got started, but in my conversations with Pizarro, I realized it wasn’t exactly right,” Farrow said. “For example, he wanted more material on coaching. So, together, he and I made changes to customize the material further.”

Having the dialogues with Telefónica and refining the content brought about a highly interactive two-day session on leadership and communication focused on the concept of transformational leadership—the idea that leaders who are inspirational, give individualized consideration, and offer employees intellectual stimulation have the ability to transform their organizations.

In addition to presenting the concepts, Farrow built in a number of small-group exercises, giving participants the chance to determine how to apply the concepts and report their observations back to the entire group. For example, they looked at what they could do to become more transformational, and they considered situations that promote or hinder transformational leadership.

Experience delivers strong impact.

“The program gave us a moment to reflect on what kind of leadership we have and what kind we need,” said Roberto Plazola, customer service director for global accounts. “The experience led us to have a discussion that enabled us to move forward as managers of the company. Also, I took immediate action on the behaviors I realized I needed to work on.”

Such commitment to change is part of the culture at Telefónica.

“We have a closed box into which we put two action items that we plan to work on right away,” Plazola said. “We get a reminder halfway through the year, and we look at our progress during our annual leadership conference the next year. After the leadership program, I knew the two action items to put into the box.”

Rosa Vento, purchasing director, enjoyed the interactive format and the personal revelations.

“Some of the exercises we did made us realize things we do on a daily basis that are weaknesses,” she said. “I was sort of aware of them, but I didn’t realize the impact they could have. For example, I am very self-directed and I lack patience. Based on what I learned, I am trying to be more patient, even though it’s hard to teach an old dog new tricks.”

EPE program is just one aspect of relationship between the college and Telefónica.

The EPE program at Telefónica illustrates the kind of relationship with corporate partners the college continues to build. From its side, the college is able to offer expertise by deploying professors to teach on a wide variety of subjects.

On the other side, the college benefits enormously from the input of members of the company. Pizarro sits on the college’s Dean’s Council, a group of distinguished business leaders who advise the college on business trends, opportunities, and needs, and also have become advocates within the business community. His then vice president of human resources, Martin Fischetti, sits on the Executive MBA advisory board. Advisory boards support the college’s academic programs by offering advice on the curriculum and other matters to ensure graduates are ready to meet the needs of the current work environment.

“It was Fischetti who originally approached me about the need in his organization,” said Natalia Echeverría Sol, the college’s director of corporate relations. “It is a wonderful thing that happens when our team is working on our external relationships in the community and our partners begin receiving the message on many levels. This is exactly the kind of synergy that happened with our friends at Telefónica.”

According to Echeverría Sol, “We were so permeated throughout their organization, it was a natural choice to reach out to us for this in-depth needs analysis and highly customized executive education program. I firmly believe that our advisory boards and external relations efforts play—and will continue to play—a major role in the development of strongly rooted relationships in our business community.”

To find out more about EPE’s menu of programs, visit http://business.fiu.edu/epe/epe.cfm. To learn more about customized programs, contact Robert Garcia at 305-348-1144 or garciar@fiu.edu.

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Local event brings international perspective to business prospects in Venezuela.

With the landslide election of Hugo Chávez in Venezuela in December, 2006, businesses operating there are grappling with the potential consequences. More than 115 individuals got much-needed and much-appreciated insight from experts who spoke at the “Global Intelligence Briefing,” co-sponsored by the Greater Miami Chamber of Commerce, Regions Bank, and the College of Business Administration.

The panel members addressed the question “Post Election Venezuela: What Does the Future Bring for Commerce?” Jerry Haar, professor, Department of Management and International Business, and associate director, Knight Ridder Center for Excellence in Management, moderated the panel. Haar also chairs the Chamber’s Global Business Development committee.

“A couple of people flew in from Venezuela,” he said. “We opened with five minutes for an overview to set the stage on the economic situation. We then had a round of questions and cross-examination.”

Part of the challenge was to keep the discussion focused on commerce without adding a political dimension.

“Our concern was not politics,” Haar said. “Our focus was on how people are responding on the ground. People were very satisfied with the content of the discussion.”

International panel touches on wide range of interests and concerns.

To give attendees a breadth of information, panelists included Mariano Oliva, franchise manager, Latin América/Caribbean, Wendy’s International; Gilberto Minionis, president, NetUno, a telecommunications firm in Caracas; John Price, president, InfoAmericas, Inc., a market research and business development company; Roberto Vainrub, president, ActiValores, a brokerage firm in Caracas; and César Vasquez, business unit manager, medical division, Olympus Latin América.

The event took place on January 24, 2007. Future global intelligence briefings will focus on the Patriot Act and on issues related to the Asia-Latin América connection.

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BBA+ Weekend class reaches out to better the lives of children in Guatemala.

Just south of the Mexican border, small villages dot the mountainous areas of rural Guatemala. The inhabitants, mostly Mayan families, have overwhelming needs but almost no access to resources of any kind.

Education for many Guatemalan children is rudimentary at best. Health aid, sufficient food, adequate housing, clean water—life’s most basic necessities—are out of reach for most.

Some much-needed relief is on the way—thanks to members of the 22nd BBA+ Weekend class, who have selected to support the Adopt-a-Village in Guatemala organization as the community service project for its Business in Society class.


“We were looking for a unique project—one that would enable us to reach out into the world and do what we can to improve the lives of others,” said Patrice Prescott, who is the project leader and primary liaison between the group and Adopt-a-Village in Guatemala, Inc.

The mission of Adopt-a-Village is to empower the Mayan people of northwest Guatemala by providing training and resources so that they can develop improved education and health conditions in their communities.

Since its founding in 1991, the Miami-based Adopt-a-Village in Guatemala organization has completed more than sixty major village projects, including the construction of primary schools, the provision of aid to middle schools, and the building of a training and development center for higher education. Water systems and roads also have been built. Many health programs, including a treatment program for children and adults suffering from tuberculosis, have been initiated.

“We are committed to giving our time and talents to help the children and their families in these Guatemalan villages,” Prescott said.

She, like most of the students in the BBA+ Weekend program, already is balancing the demands of school with hectic work and family schedules but is willing to take on more responsibilities for this worthy cause.

“Selecting this project was the result of careful research and group consensus,” said Robert Hogner, associate professor, Department of Management and International Business, coordinator of the college’s Civic Engagement Initiative, and the instructor of the course. “I’m impressed with their choice of a global project that is very much in harmony with their coursework in management and international business. Their selection truly reflects the international personality of the college.”

Group determines the best way to offer the most help today—and tomorrow.

After some deliberation, the students decided that the best way for them to support the Adopt-a-Village organization was to launch a fund-raising campaign. They set an ambitious—but they believe realistically attainable—goal: to raise $10,000 before the end of March, 2007.

“At first we thought we could purchase some of the items that were really needed for the schools in Guatemala, such as school books and even book cases, directly,” Prescott said. “We soon realized that it would be more cost-efficient to raise money here and enable Adopt-a-Village to buy what they needed locally in Guatemala.”

The classmates are tackling fundraising in multiple creative ways. One group is pursuing corporate donations. Another is advertising and selling tasty breakfasts and lunches to other students attending Saturday classes at the college. A third is conducting a raffle—with a new iPOD as the prize.

“My group is selling ‘World’s Finest Chocolates’—and I have to say they are selling like crazy,” Prescott said. “Across the board, our fundraising activities are going very well, and we are on track to meet our goal.”

According to Hogner, the students also are considering developing longer-term projects to support Adopt-a-Village beyond when this class and their degree program are completed.

“They have a vision to help Adopt-a-Village in rebuilding their infrastructure so that the local citizens will be able to progress on their own eventually,” Hogner said.

He went on to explain that this type of project demonstrates experiential learning focused on the kind of civic engagements that many of his students will go on to organize and participate in after graduation.

“They are developing the skills and sensibilities needed to build strong, positive connections between business and community at both the local and global level,” he said. “In many ways, that’s what Florida International University is all about.”

“I want to stress how critical this project is as part of the international vision of the college in reaching out to the Américas,” said Donald Roomes, director of the BBA+ program. “Also, it is an important program goal to instill in our students service learning as part of their commitment to lifelong learning. I am not surprised to see the interest that many have shared in continuing this effort beyond their BBA+ experience.”

For more information on the BBA+ Weekend program, visit http://business.fiu.edu/landon/bba_plus_weekend.cfm. To learn more about the Adopt-a-Village in Guatemala organization, visit http://www.adoptavillage.com/. To find out how you can help the BBA+ Weekend Group 22 meet its fund-raising goal, please contact Patrice Prescott at ppres003@fiu.edu.

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