how to turn off AirDrop

There is nothing in particular you need to do - when you do NOT have it highlighted in the Sidebar, it is not on. It's as simple as that. And, if you happen to use ethernet to connect to the internet, you can also turn off WiFi - but that is not necessary. Again, if it's not highlighted (selected), it's not on.

I haven't yet upgraded to ML. Is it possible to lock down Airdrop in a work environment via security settings?

Your computer and someone else's computer both need to be in the Airdrop window for both computers to be visible to each other. So if you're worried about security, simply don't click Airdrop in Finder when you're in a suspicous area. Keep in mind that Airdrop is for sending files, not taking files, so it's not like someone can steal files from your computer if Airdrop is open.

No, you can't "lock it down"; if you want to be double sure, make sure WiFi is off - nothing can happen without it because Airdrop uses it to create its own ad hoc network.

in the finder side bar is the air drop icon. If it is spinning it is on. If it is not spinning, it is off. You have to click on it to get it spinning [i.e. turned on...]