|John H. Dunning, EIBA's Lifetime Achievement Award
EIBA’s Lifetime Achievement Award to John H. Dunning, Ljubljana, December 2004
When the EIBA Fellows decided to award John Dunning’s influential contributions to International Business with the first and only Lifetime Achievement Award the question was raised of organizing an academic session either in Ljubljana or the year afterwards in Oslo. However, John himself thought that there was no particular need for this and wanted to postpone this for another special occasion like his 80th birthday.
John Dunning received his award during the gala dinner. The EIBA members gave him a standing ovation that lasted for almost five minutes. John Cantwell presented some short considerations about his academic work, while Rajneesh Narula provided the audience with some insightful observations about the non-academic aspects of working under and with John Dunning.
The description of the following stages of John Dunning’s carreer are based on his own contribution in the Journal of International Business Studies, 2004, No 4 with the title:Perspectives on International BusinessResearch: A Professional Autobiography Fifty Years Researching and Teaching International Business. It describes his career until the 1970s, meaning that the other decades will be taken up in the next issue of EIBA-zine.
Danny Van Den Bulcke
THE EARLY YEARS: The 1950s
John Dunning left school at the end of 1942, worked first in an insurance broker’s office, and then in a Spanish bank in the City of London. Prior to joining the Navy towards the end of World War II, he had sat, and passed, the first part of the Institute of Banker’s Examination, with the full intention of returning to banking as a career, after his naval service. However, this was not to be. In his final years in the Navy he took advantage of a government-sponsored scheme intended to help finance ex servicemen with their university studies.
Professor Dunning graduated in 1951 at the University College London, and became research assistant of Professor Allen, who had been asked by the (then) Board of Trade to evaluate the U.K. government’s post-war strategy of siting newly emerging radio and TV plants, in regions of above average unemployment, rather than in locations around London and the South East where the existing industry was then concentrated. With Douglas Hague, then a young lecturer on the staff of UCL, he visited some 23 factories in Scotland, the North East of England and Wales. It was his first, but by no means his last exposure to field research. The findings were later published as an article in the Review of Economic Studies in 1954.
In the summer of 1952, he was offered a lectureshipat the University of Southampton in Southern England, and one at Adelaide University in Australia and chose the former. Following his earlier work at UCL his research program took two main thrusts. The first was in the area of locational economics, and more especially on the role of U.K. government policy in the development of new regional clusters of economic activity. The second, which directly arose from his observations—when visiting mid-Scotland—of the concentration of American owned factoriesin that area, was on the contribution of these and other U.S. affiliates in Britain to post-war U.K. industrial development.
He obtained a Marshall Fund grant to undertake a thorough study of the extent and pattern of U.S. direct investment in the U.K. manufacturing industry, and its effect on indigeneous productivity. This was an ambitious project for a young scholar as it was the first of its kind since Frank Southard had undertaken two similar studies on U.S. direct investment in Europe and Canada in the 1930s (Southard 1931, 1936). With h the help of two research assistants he visited over 150 U.S. subsidiaries and 75 of their suppliers, competitors and customers in the U.K. These subsidiaries, together with 56 others providing data in response to questionnaires, embraced more than 90% of the universe of U.S. manufacturing affiliates in Britain at the time. Though the study did not pretend to offer a theory of FDI, it did attempt toshed light on a different, but no less interesting, issue. Other research around this time had shown that, on average, manufacturing firms in the U.S. recorded a 21⁄2-4 times higher productivity than their U.K. counterparts (Rostas, 1948).
The question that intrigued J.H.Dunning was how far this was due to the superior management, entrepreneurship and technological skills of U.S. firms (what he termed the (nationality of) ownership(O) specific contribution to productivity); and how far did it reflect the superior immobile resource endowments of the U.S. economy (what he called the location (L) specific contribution to productivity). He reasoned that the closer the productivity of U.S. subsidiaries in the U.K. was to that of their parent companies in the U.S., the more Anglo-U.S. productivity differences might be ascribed to the superior O specific characteristics of U.S. firms. If, however, the productivity of the U.S. affiliates was broadly in line with that of their indigenous competitors, then the Anglo-U.S. productivity differences were more likely to be due to the more congenial, but location bound, characteristics of the U.S. economy. In
the event, he found that, on average, U.S. subsidiaries recorded a productivity of around three quarters that of their parent companies. This then, suggested that a greater part of the industrial productivity gap between the U.S. and U.K. was due to the superior 0 advantages of U.S. firms. So was born the O and L component of the eclectic paradigm, but the last leg of the tripod had to wait another 18 years. But, the main thrust of the volume was more to do with the effects of inbound foreign direct investment (FDI). Many of the costs and benefits of FDI, as identified by the U.S. and U.K. executives I interviewed, are now commonplace in
the literature. Certainly, later in the1960s and early 1970s they were confirmed by several other country case studies.
The 1960s: NEW DIRECTIONS OF TEACHING AND CONSULTANCY
John Dunning’s initial foray into assessing the significance and impact of transatlantic FDI, both widened and deepened in the 1960s, although he also continued to pursue his my interests in industrial and locational economics. In the mid-1960s, he was asked by Brian Reddaway of the University of Cambridge to participate in a major study he was undertaking for the U.K. government on the impact of British outward FDI on the U.K. economy. At the same time, together with his a colleague David Rowan at Southampton University, he did further work on the comparative efficiency of U.S. subsidiaries in the U.K. and their U.K. competitors, for the National Economic Development Office (NEDO)—a U.K. government department.
In 1964, he was appointed to the Foundation Chair of Economics at the University of Reading.
It was the challenge of building a new department—almost from scratch—that tempted John Dunning to move to Reading. He decided to concentrate the research interests of the department in the area of applied economics. The strategy proved to be a successful one. During the following decade, the size of the student intake and faculty quadrupled and as a result of new programmes; Reading was raised in the pecking order of U.K. Economics Departments.
In the Spring of 1968, he was invited by Grant Reuber, then Head of the Department of Economics at the University of Western Ontario (UWO) to spend a sabbatical year in Canada. This was at the warm recommendation of Harry Johnson, whom John Dunning regarded very much as his mentor at the time. Two other doyens of international economics—Charles Kindleberger and Raymond Vernon—and by Austin Robinson, then, President of the International Economics Association asked him me to prepare papers for conferences they were organising, the first two in the U.S. in the spring of 1969 and the third in the Algarve, Portugal, in the fall of that year. In the event, these conferences played a critical role in the formation of Dunning’s ideas. The one organized by Kindleberger at MIT in Cambridge, and subsequently published as a book (Kindleberger, 1970), was probably the first on the economics of the multinational enterprise—or international corporation as it was then called. The Vernon conference, held in New York at the National Bureau of Economic Research focused on the role of technology in international trade. By asking him to look at the extent and ways in which direct investment in the U.K. had fashioned the (post-war) technological development in the U.K., Vernon steered John Dunning’s thoughts to examining, in more depth, the knowledge-based advantages of the U.S. and U.K. economies, and the way in which these were internalized by U.S. and U.K. firms, and then transferred—by way of FDI and licensing arrangements—across the Atlantic. His contribution for the IEA Conference, which centered on the impact of transatlantic FDI on the economic development of the U.S. and Western European economies in the 19th and 20th centuries. His stay in North America and his contacts with the leading researchers during this period greatly enriched, according to John Dunning his understanding on the determinants of FDI and of how the foreign affiliates of MNEs impinge on the productivity and growth of their indigenous competitors. He put together some papers he had written in the 1960s, into a book entitled Studies in International Investment (Dunning, 1970). This was the first of seven volumes of his essays that Allen and Unwin later Unwin Hyman, and later still Routledge have published, and which trace the evolution of his thoughts and writings on international business related topics.
The 1970s: NEW CHALLENGES IN INTERNATIONAL BUSINESS RESEARCH
The 1970s were particularly important in steering John Dunning’s career path into two new directions. The first was the request to serve as the U.K. member on the so-called Group of Eminent Persons, which was set up by the UN Economic and Social Council (UNESOC), to study the impact of MNEs (later to be called transnational corporations [TNCs]) on economic development and international relations. The initiative for this study group was sparked off by ITTs interventionist role into the political affairs of Chile in the late 1960s.
The report of the study group of which John Dunning was one the principal authors, was published in 1974 (UN, 1974) and a Commission on TNCs was set up and supported by a research and secretarial staff of the Center on Transnational Corporations (UNCTC). The task of the Center, which in 1989 became part of UNCTAD, was (and is) two-fold. First, it is to collect and interpret data, and to undertake research on various economic and social aspects of the activities of TNCs, particularly, as these affect developing countries. Second, it is to advise governments of developing countries on how they might best negotiate with TNCs and/or their affiliates, and pursue the appropriate macroeconomic and macro-organizational policies in order to get the maximum (net) benefit from their presence.
Throughout the Center’s existence, J.H. Dunning has been closely associated with many of its activities. In particular, over the past 15 years, he was Senior Economic Adviser to the Director of the Investment and Technology Division of UNCTAD in Geneva, which, under the direction of Karl Sauvant, has been responsible for the publication of the annual World Investment Reports. These are highly valued both by governments and by the international business community for their comprehensive description and analysis of the interaction between TNCs and the economic and social interests of developing countries.
Another major new thrust in his research agenda in the 1970s was to look more closely at the theory of FDI and MNE activity. Up to the early 1970s, my interests had primarily focused on the economic consequences or effects of FDI. He decided to turn to examining its motives and determinants. In the first half of 1976, during a semester’s leave at Boston University in the U.S. He was introduced me to a path breaking paper by J.C. McManus that argued that firms chose to engage in FDI rather than form a non-equity alliance with a foreign firm whenever the (net) transaction costs of engaging in the former form of cross border rent seeking activity were perceived to be lower than those of the latter (McManus, 1972). At the same time, two of his younger colleagues at Reading—Peter Buckley and Mark Casson—were researching along similar lines, as indeed were Birgitta Swedenborg and Nils Lundgren in Sweden, and Jean Francois Hennart in the U.S.. Out of their research was born the internalization theory of the MNE, which essentially was (and is) an extension of the Coasian approach to understanding the origin of the firms, but applied to their foreign value adding activities. This was the missing piece of the jigsaw Iprofessor Dunning was looking for. Later in 1976, some he presented the eclectic paradigm (then called theory) of international production (i.e. production financed by FDI) at a Nobel symposium on the International Allocation of Economic Activity, in Stockholm, which was attended by a group of senior economists and economic geographers. To the O and the L dimensions of the competitive advantages of firms and countries, he added the I., also known and quoted as the OLI-paradigm.
Two other events in J.H Dunning’s my academic journey occurred in the 1970s. First, in September 1972, he organized a workshop at the Rockefeller Foundation center at Bellagio, on Lake Como, at which authors contributing to a volume he was editing on
Economic Analysis and the Multinational Enterprise presented papers about the impact of the growth of MNE-related activity on the received wisdom of various branches of economic thought. The second, and perhaps the more significant, event occurred in 1979, when I was invited to present a paper at a conference on Third World MNEs (probably the first of its kind) at the East West Center in Honolulu. More specifically, he was asked to discuss the relevance of the eclectic paradigm to understanding the emergence of outward FDI from developing countries. Based on some thoughts that Peter Buckley and John Dunning had shared a couple of years earlier about the relationship between the level and significance of inward and outward FDI of countries and their stages of development, he formalised this idea and offered some casual evidence of the ways in which the international direct investment position of countries was related to a number of country specific variables, including GNP per head, economic structure, government policy, degree of openness and environmental risk. Hence the concept of the investment development path (IDP), or cycle as it was then called, was born. This concept was later subjected to more rigorous statistical testing (Dunning, 1981) and further modified and extended it in the 1980s and early 1990s Dunning and Narula, 1996). Over the years, it has proved a popular tool for IB scholars in their understanding of the role inbound and outbound MNEs activity can make to the structural transformation of both developed and developing countries.
(to be continued)
|Jorma Ollila, European Manager of the Year 2006
The participants of the 31st Annual EIBA Conference in December 2005 in Oslo will certainly remember that John Dunning, as Dean of the Fellows oof EIBA, handed to Jorma Ollila, Chairman of NOKIA, the first EIBA Award of Distinguished Honorary Fellow. The speech delivered on this occasion by this famous recipient of the EIBA award sent some important messages about the importance of innovation and education in international business which were extremely relevant both for academics and practioners.
That the EIBA Fellows made an excellent choice was confirmed six months after the Oslo Conference when Jorma Ollila received the title of 'European Manager of the Year' for having changed his company from a local conglomerate into a global firm. Under his guidance and inspiration NOKIA developed into a world leading corporation both in terms of technological achievements and expansion in market share. Mr. Ollila is recognized as a courageous and visionary manager who carried out impressively successful strategic decisions.
Per day NOKIA produces in all of its factories (located in 8 countries: Finland, Germany, Hungary, Mexico, USA, China, South Korea and India) 725,000 mobile phones, which comes to 9 per second. In each telephone there are between 300 to 350 components. The company employs almost 60,000 people of 128 different nationalities. About one third of its employees are engaged in research activities and the worldwide market share amounts to 35 per cent. It has been estimated that about 800 million people run around with a NOKIA phone. The Finnish firm came a long way since it started out as a paper producer in 1865 and developed from a holding company producing many different products (from television sets to rubber boots) until at the beginning of the 1990s it went into the telecom sector and mobile phones under the leadership of Jorma Ollila. One of the revolutionary managent decisions that he took was that NOKIA would not keep any stocks anywhere in the world... Ollila's salary was €4.9 million, exclusive of the stock options.
The European Manager of the Year Award is granted by the European Business Press (EBP), an association which groups 51 European business papers and magazines from 21 countries. The EBP Award was given for the first time in 1991. Previous winners include Ingvar Kamprad (IKEA) and Bernd Pischetsrieder (ex BMW, now VW).
Shortly after having received the EIBA Award, Mr Ollila moved to the Netherlands as Chairman of the Board of Royal Dutch Shell. It is worthwhile to recall that Mr. Miko Kosonen, Vice President Corporate Development of NOKIA was on the EIBA Fellows' Panel about 'Nationality' of Global Firms. Does it Matter? in Ljubljana in December 2004.
Danny Van Den Bulcke
|Alan Rugman, Contributions to International Business 25 Years Later
Another special session organized at the 30th Annual EIBA Conference in Ljubljana was about 'International Expansion, Geographic Diversification and the Multinational Enterprise: Alan Rugman's Contributions to international Business 25 years Later'. The session was chaired by Danny Van den Bulcke. The panel members were John Cantwell, John Dunning, Rob Grosse and Jean François Hennart. Alan Rugman reacted to the comments of the members of the panel and explained how this book was the starting point for his carreer. A number of papers presented at the session, together with some other contributions were publidshed in 2005 by JAI Press in a volume edited by Alain Verbeke. The following introduction to this book was written by Danny Van Den Bulcke and Alain Verbeke.
The research volume ‘Internationalization, International Diversification and the Multinationhal Enterprise’ edited by Alain Verbeke and published by Elsevier, 2006, honours Alan M. Rugman, who is the L. Leslie Waters Chair in International Business (IB), Professor of Management and Professor of Business Economics and Public Policy at the Kelley School of Business, Indiana University. The work contains a set of essays developed to celebrate the Academy of Management’s (AoM) recognition of Professor Rugman as the ‘Booz Allen Hamilton Strategy and Business Eminent Scholar in International Management’ at the AoM 2004 Annual Meeting in New Orleans, Louisiana. Booz Allen Hamilton established this award to recognize eminent scholars whose research and writing have contributed significantly to international management scholarship and whose work has had an effect on the practice of international management.
This great honour was not the only one Professor Rugman received in 2004. The European International Business Academy (EIBA) organized a special panel honouringProfessor Rugman’s 25-year old landmark study on international diversificationand the multinational enterprise (MNE) at its 2004 Annual Meeting in Ljubljana, Slovenia.
Alan M. Rugman will undoubtedly be remembered as one of the founders and intellectual fathers of the modern field of international business studies. He has devoted most of his life to convincing other scholars and the public at large that the MNE is the most important organizational business form worthy of academic study in our globalizing society. MNEs are an efficient response to the economic opportunities provided by the growing interdependence among nations. They are also the key conduit for the transfer of ideas, values, innovative technology and best practices across national borders. Subject to a number of boundary conditions, mainly a well-functioning institutional structure at the macro-level and the presence of workable competition, MNEs permit developing and developed countries to move to a higher stage of economic, social and ecological development.
Through literally hundreds of conceptual and empirical studies, Professor Rugman has developed an impressive scientific oeuvre on the MNE. Unlike other influential scholars, Professor Rugman did not limit himself to publishing in ‘A’ journals only. His impatience to disseminate his insights, his ambition truly to span the fields of economics, public policy studies, management and law, and his uncommon eagerness to engage in intellectual debates led to numerous appearances in non-mainstream venues and publication outlets with limited citation count impacts. But Professor Alan M. Rugman is what any great scholar should aspire to be: a person consumed by the goal of describing and explaining phenomena critical to the future of human society, and ready, at any time and place, to articulate and to defend what he believes is true. Simply stated, Professor Rugman studies what the world’s largest business organizations really do, and why this matters to society at large.
In several university institutions, inter alia Dalhousie University in Halifax, the University of Toronto and Oxford University, his approach to research and teaching legitimized IB studies as a credible, mainstream area of academic inquiry. His spirited interventions at many academic meetings, especially the Academy of International Business, the AoM and EIBA, always focused on the ethical responsibility of IB scholars to describe accurately what MNEs do in the real world, and to assess their impacts from a comparative institutional perspective.
We can distinguish among four stages in Professor Rugman’s intellectual and professional career. The first stage includes his 1979 book on International Diversification and The Multinational Enterprise, and that published a year later, Multinationals in Canada: Theory, Performance and Economic Impact. The contribution of this early work is that the performance impact of diversification is measured in terms of return and risk, with the outcome that more internationally diversified firms do not earn higher returns but do achieve a risk reduction. This outcome is intuitively appealing provided two conditions are satisfied. First, the home country does not provide the same opportunities to buy inputs or sell outputs as those available in international markets.
Second, most international activities occur in an environment characterized by external market imperfections that hinder trade and simple contracting across borders. Professor Rugman’s early work culminated in what is to date his best-known book, the influential Inside the Multinationals, published in 1981 by Columbia University Press.
In this work, Professor Rugman sets forth the foundations of modern internalization theory, i.e., the transaction cost economics perspective (TCE) on the MNE. Interestingly, rather than focusing on transaction cost minimization, Professor Rugman articulated his understanding of the need for MNEs to maximize the net present value (NPV) of their foreign projects through the choice of a particular entry mode. In addition, he focused on the public goods nature of knowledge, rather than the danger of opportunistic behaviour as the key driver of internalization. By focusing on the NPV and on the public goods nature of knowledge, Professor Rugman avoided two of the key problems identified by critics of transaction cost economics more than a decade later. Indeed, those critics wrongly state that TCE scholars focus solely on transaction cost minimizing rather than value maximizing, and that they inappropriately adopt opportunism as a behavioural assumption. In fact, Professor Rugman always did focus on value maximization, and has been much more interested in the managerial challenge of knowledge appropriability than in assuming particular behavioural characteristics of the individuals involved in IB transactions.
The 1980s represent the second stage of Professor Rugman’s distinguished publishing career. Here, the focus was on Canadian MNEs as the empirical basis for MNE theory development. The contribution of this work has three components. First, it identified the importance of downstream rather than upstream firm-specific advantages (FSAs) of Canadian resource based MNEs. Second, it also focused on the important role of subsidiaries, even if they are branch plants, in MNE networks. Third, it demonstrated the need for MNE market access (double diamond thinking) as the driver of the Canada–United States Free Trade Agreement (C-US FTA) and the subsequent North-American Free Trade Agreement (NAFTA). Through this work, Professor Rugman realized even more than before the need to link economics, public policy, law and management in a pro-active fashion.
The third stage in Professor Rugman’s career as an IB scholar covers most of the 1990s, and is characterized by extensive new theory development. He conducted various studies on the effects of trade and investment liberalization on MNEs. Importantly, he observed that trade and FDI are often complements rather than substitutes after regional trade and investment liberalization. Another area of research developed by Alan M. Rugman in this stage is that of environmental regulation and corporate strategy, culminating in an influential article in the Strategic Management Journal in 1998. Perhaps Professor Rugman’s most important contribution is the resource-based analysis of the conventional national responsiveness-integration dichotomy, and the related ‘transnational solution’ concept. Here, the key distinction is that between non-location bound (or internationally transferable) FSAs and location-bound FSAs. The former FSAs lead to benefits of integration (scale, scope and exploitation of national differences), whereas the latter FSAs, which cannot be deployed across national borders, lead to benefits of national responsiveness.
The fourth stage in the development of Professor Rugman’s scientific oeuvre starts in the year 2000 and continues today. Here, a dual research agenda is apparent. First, Professor Rugman is adopting a descriptive focus on regionalization rather than globalization. Second, his analytical focus is on extending TCE/internalization theory to permit improved dialogue with the strategy field. This important work includes the development of radically new ideas, including the concept of subsidiary-specific advantage in MNEs, the revisiting of Edith Penrose’s true significance for the development of the resource-based view, and the study of internal mechanisms to economize on bounded rationality in network MNEs. It is safe to say, given the importance of both the descriptive and analytical perspectives in Professor Rugman’s new work, that the best is yet to come!
Danny Van Den Bulcke and Alain Verbeke
|Danny Van Den Bulcke, Emeritus Professor University of Antwerp
Danny Van Den Bulcke, Emeritus Professor University of Antwerp: an Academic Internationalization Model
In Ljubljana in December 2004 a special session was organized about ‘Transnationals and Economic Development: From Internationalization to Globalization’ Essays in honour of the Inauguration of Daniel Van Den Den Bulcke as Emeritus Professor.
The session was chaired by Filip De Beule and presentations were made by Vitor Simoes, Alain Verbeke, Juan Duran and John Hagedoorn. A few days before the 30th Annual EIBA Conference in Slovenia an International Conference was organized in Antwerp, the Institute of Development Policy and Development, during which papers were given by John Dunning, Juan Duran and Belgian colleagues and collaborators of Danny Van Den Bulcke.
Those and other papers (also Peter Buckley and John Cantwell contributed) were published in a volume edited by Ludo Cuyvers and Filip De Beule under the above mentioned title (Palgrave, 2005). The following introduction comes from this volume and highlights some aspects of the carreer of Danny Van Den Bulcke.
The subtitle of this volume “From internationalization to globalization” is very appropriate as it somehow reflects the stages in the longstanding academic career in the international business field of Daniel (Danny) Van Den Bulcke. Along the lines of the Scandinavian internationalization model his activities started from a local or national interest in international economics and international business and gradually moved into activities abroad, first in some neighbouring countries and later in faraway continents. And as Danny Van Den Bulcke has always been very versatile this internationalization process is evident, not only in his research record, but also in his teaching career and his active participation in academic networking with colleagues and doctoral students from all over the world. Although other aspects of his career might be highlighted this introduction will be limited to the three aforementioned dimensions.
After a fellowship of six months in Canada as Laureate of the Prize of the Belgian Minister of Foreign Trade and MA studies at the University of Toronto, Danny Van Den Bulcke was asked by Professor Vlerick at the Ghent University to carry out a major research project about ‘Foreign Enterprises in the Belgian Manufacturing Industry’. The project was sponsored by the Belgian Agency of Productivity, an offspring of the Marshall Plan. The study was published in 1971, regretfully only in Dutch and French, and was one of the first thorough researches about the impact of foreign enterprises on a national economy (Van Den Bulcke, 1971). Later on he used the extensive database set up for this project to analyse the newly ’discovered’ phenomenon of the Multinational Enterprise (MNE) for his doctoral thesis (Van Den Bulcke, 1974).
When he moved to the University of Limburg in 1972 he continued his research activities at Ghent University and carried out a new major empirical research project that was not only limited to inward FDI in the Belgian manufacturing sector, but also included services and outward FDI (Van Den Bulcke, 1978; Haex, Halsberghe and Van Den Bulcke,1979; Haex and Van Den Bulcke,1979; Halsberghe and Van Den Bulcke,1981).
Danny Van Den Bulcke was one of the very first researchers to tackle new emerging issues in international business - often at the request of international organizations and national ionstitutions - such as disinvestiment (European Centre for the Study and Information on Multinationals), employment aspects (International Labour Organisation), restructuring (Belgian Ministry of Economics) decision making (Institute of the Enterprise), regional headquarters (Ministry of Brussels Affairs), coordination centres (Federation of the Coordination Centers), American direct investment in Belgium (American Chamber of Commerce), etc….
When he moved full time to the University of Antwerp in 1985 Danny Van Den Bulcke’s research interests spread also in their geographic scope. In a report about the Globalisation of the Belgian Economy (1997-1999) the so-called Asian connection received most attention because by that time he had found another challenge i.e. the study of the Chinese economy. Together with his collaborators he wrote extensively about European Direct Investment in China, Chinese outward FDI, state owned enterprises and corporate restructuring, clusters. During this whole period he maintained his interest in FDI in Belgium, especially American investments, and the activities of MNEs in Europe
When Danny Van Den Bulcke got started in his academic career, the subject matter of international business did not yet exist in Belgium and most other European countries. The first courses he was asked to teach at Ghent University dealt with European Economic Integration and International Aspects of Economic Development. It was only after he left Ghent University and was appointed at the University of Limburg that he was able to launch a special course about issues of FDI and MNE. During the second half of the 1970s and the first half of the 1980s he was one of the few professors in the Benelux who had been following up on IB matters. Consequently he was asked to kick-start such courses in other universities. At one particular time he taught at seven different institutions and universities in Belgium and the Netherlands in three different languages. Although he had taken on some of those courses on the condition that someone would replace him after two or three years he actually taught for more than 10 years at the College of Europe in Bruges and ICHEC in Brussels. During his long career he taught at no less than ten Belgian institutes and universities, including the Universities of Leuven, Ghent, Brussels and of course Antwerp, which at that time consisted of three separate universities. As the University of Antwerp itself he was asked to teach at the Institute of Development Policy and Management (IDPM), the Faculty of Applied Economics, the Institute of Transport and Maritime Management (ITMMA) and the Management School (UAMS).
Like his research, his teaching followed the gradual learning route of the Scandinavian internationalization model and spread from Belgium to, first the Netherlands, where during the 1980s he lectured at five Dutch universities, o.a. Tilburg University, Maastricht University. He was also active in Poland. His first intercontinental teaching assignment took place in Indonesia in 1986 (University of Padjadjaran) and would extend later to the Philippines, Thailand, Vietnam, Cambodia, Laos and India. Together with his colleague Prof. Ludo Cuyvers he was responsible for institutional support of 5 universities in South East Asia for the development of the business curriculum and research as part of the development programmes of the Flemish Interuniversity Council.
At the beginning of the 1990s Danny Van Den Bulcke also taught for several years an International Management course at the China Europe Management Institute in Beijing, the predecessor of the China Europe International Business School (CEIBS) in Shanghai, and at the Institute of European Studies in Macau. He was also responsible for institutional development of the Xian Institute of Finance and Economics and also lectured there. His contribution to the educational development of Chinese universities won him the Sanqin Prize of Shaanxi Province in China and the Friendship Prize awarded by the Chinese Ministry of Foreign Experts in 2000.
Already as a student Danny Van Den Bulcke was involved in AIESEC, an international student organization that provided traineeships for students in companies abroad. He was president of the local Committee of AIESEC (Association Internationale des Etudiants en Sciences Economiques et Commerciales) and member of the Board of the Belgian National Committee. It was in this capacity that he participated in his first international conference in Marseilles where he was a member of the committee that decided the applications of the universities to become part of AIESEC.
In 1974 together with a number of colleagues from other Belgian universities he founded the ‘International Tradeinvest Institute’ (ITI). He was president of ITI from 1981 to 1984. The objective of ITI was to establish more cooperation between academics active in international trade and practitioners both from business and the government by organizing seminars and colloquia. It was on his insistence that issues about FDI and the transfer of technology were incorporated in the mission of ITI.
From the end of the 1970s most of Danny Van Den Bulcke’s energy went out to two international academic organizations, i.e. the European International Business Academy (EIBA) and the Academy of International Business (AIB). He was national representative for Belgium for EIBA from 1979 to 2004 and President from 1985 to 1987. In AIB he was chapter chair of the Western European Region from 1987 to 2000 and vice president during 2000-2002. During his term as AIB vice president he succeeded in bringing India under the AIB umbrella and was instrumental in creating the conditions for bringing China into the organisation. Both academic associations recognized Danny Van Den Bulcke’s contributions by electing him as a Fellow (AIB in 1992, EIBA in 2003).
A major imprint of Danny Van Den Bulcke’s mark are the doctoral tutorials he organized for EIBA and EIASM from 1987 until 2004. Together with five other Faculty members he gave advice and suggestions to about 200 PhD students from all over the world. At the Belgian level he was scientific director of the ‘Intercollegiate Centre of Management Science (ICM) from 1988 to 1993 that awarded doctoral scholarships to promising Belgian students in management. He was a member of doctoral committees in Belgium, the Netherlands, the United Kingdom, Sweden and Australia and member of the Faculty of the Danish Summer Research Institute which was also organized on behalf of PhD students at the beginning of the 1990s.
The chapters in this volume were presented in two different locations, i.e. in Antwerp, Belgium and Ljubljana, Slovenia. The Institute of Development Policy and Management organized a colloquium on the occasion of Professor Van Den Bulcke’s retirement on December 3, 2004, while on December 6, during a special session of the 30th Annual Conference of the European International Business Academy, a second set of essays were presented in honour of Danny Van Den Bulcke as Professor Emeritus.
Ludo Cuyvers and Filip De Beule, University of Antwerp
|Laurence Welch, Thirty Years of Internationalisation Research
Over the years EIBA Conferences have greatly benefited from the contributions of a number of regular participants from Australia and New Zealand. Very early on Lawrence and Denice Welch came to the EIBA meetings. It was therefore quite appropriate that a special session was organized at the EIBA-Conference in Oslo to honour Lawrence’s contributions to international business studies. Lawrence has been the linchpin between Scandinavia and Australia during several decades and was at the basis of Faculty exchanges between Europe and Australia. Together with Denice he has been teaching in Helsinki, Oslo, Copenhagen and a few other places in Europe. According to some sources Lawrence trips were largely location determined, meaning that there had to be snow. If that is indeed the case, and I am sure that many of his colleagues would agree with this, it is also largely recognized that there have been important benefits to IB from these snow-inspired trips to Northern Europe by the Welch family (Lawrence, Denice and now also Catherine).
The session was chaired by Peter Buckley and had as other panel members: Gabriel Benito, Pervez Ghauri, Peter Liesch, Reijo Luostarinen, Bent Petersen and Rebecca Piekkari. The following presentation, a personal view of Lawrence Welch’s ‘leaps in the dark’ was made by Peter Liesch. While I find that this title is most appropriate, it leaves out the fact that Lawrence sometimes left some of his colleague quite literally in the dark. Having been invited to accompany Lawrence on a skiing outing in the mountains around Melbourne many years ago, I was shocked to find out that I had to stay behind to play with a toboggan while he went on a langlauf trip for more than two hours and only returned when it was getting dark. While my first ski trip ever ended in shivering disappointment and became a non-event, Lawrence claimed that he had set a new record. Judging on the time I had been waiting in the snow for his return, I doubted this however.
Danny Van Den Bulcke
Lawrence Welch : Uncertainty and Internationalization
Peter Liesch, Oslo, December 2005
It is truly an honour to be invited to contribute to this Panel, amongst this company, to offer a few words in recognition of Lawrence’s contribution to firm internationalisation research. I have elected to say a few things about Lawrence, and about Lawrence, uncertainty and internationalisation.
I wonder whether Lawrence recalls, and whether his colleagues here today are aware, that Lawrence's PhD thesis, awarded by the University of Queensland (UQ)on 1 June, 1978, carries the cover title of "The Internationalism Process of the Firm" !!!!!! Was Lawrence even then coining a new expression …. “the internationalism of the firm”…. no , it was actually a printing error as the title within the thesis is “the internationalisation process of the firm”, but one can never be sure ….. as we will see shortly. Lawrence is prone to “leaps in the dark”!!!!!
Thirty years ago in November 1975, in Working Paper 10 published by the Department of Economics at The University of Queensland, titled "Before the first export order: A behavioural model” by Finn Wiedersheim-Paul, University of Uppsala, L. S. Welch, DDIAE and H. C. Olson (University of Uppsala) (forerunner to the JIBS 1978 paper "Pre-export Activity: The first step in Internationalization"), it is written:
"The model which has been presented (in the 1975 Working Paper) constitutes a basis for a continuing program of empirical research into issues surrounding the export start".
Of the three specific areas of interest for their future efforts, the first of these is listed as:
"The Nature of the information environment of the firm as it bears upon the export decision".
As at today, L. S. Welch remains at work, at his bench in his workshop of ideas, beavering away on this very research question – what a master of his own destiny – define a research question that is assured to remain unresolved and create a workspace for oneself for one's lifetime.
In this 1975 working paper, Lawrence devotes much time to the human factor in the internationalisation process. At one point he defines, in relation to information interpretation in the internationalisation process, individuals as being classified as either systematic or intuitively oriented. Of the systematic person, L. S. writes:
"They tend to stay in their local, well-known environment, they define the problem, setting its constraints in the light of the method chosen: the method itself becomes the key to assessing and solving the problem……As a result, such individuals find it more difficult to operate and make decisions where there is considerable uncertainty in the environment, e.g. due to the lack of information".
Such is not our L. S. Welch.
“On the other hand, intuitive individuals are not tied to a precise method – they are far more "loose" in their attempts to solve a problem. They are prepared to shift around in the methods applied, but maintaining a strong focus on the overall problem. They are far better able to operate in a situation of uncertainty ….The seeming "leap in the dark" is not an unreasonable one"!!”
Very much so, this is our L. S. Welch.
Now …. of "leaps in the dark", our L. S. Welch is a natural master !!
We all are very aware Lawrence is a fitness fanatic. He runs and skis wherever he may be – subject to the availability of snow. But even then, too, for most of the past 30 years LS has chosen to live in snow countries or at least near to snow. I have been told of some of his "leaps in the dark" and I have experienced some others with him. These are very real "leaps", not mere academic imaginings!!
In the early 1970s, back in my very early associations with Lawrence, while living in Toowoomba, Australia, where Lawrence both taught me as an afro-headed, skinny, somewhat rebellious undergraduate student in a very small class at an otherwise unknown tertiary campus, Lawrence was even then an avid jogger – but even then, a rather ‘…. sight-challenged’ one. Thirty- four odd years ago, Lawrence had difficulties negotiating undulating surfaces on urban footpaths. Running alongside him, I often found myself instantly unaccompanied after he had sprawled spread-eagled on the red soil of Toowoomba's footpaths after leaps of foot insecurity had brought him to the ground. This habit has remained with him, just has his unresolved research problem of the nature of the information environment of the firm as it bears upon the export decision.
Some years later, while visiting with Lawrence and Denice and Runnar Framnes in Oslo, I was enticed unwillingly to accompany Lawrence on a major fun run hosted by Runnar. While this story is a long one, better kept for an evening at the hotel bar, it has been reported and ensconced into Norwegian and Australian folk-law how one mad Australian skier living in Oslo at the time and supposedly well-acquainted with Oslo's street directory, lost his way amidst a very large group of runners only to "head for the hills" and to forfeit what would have been a sure place in the race, and probably a win – not only did he not enter the Oslo stadium at the correct entrance, where thousands of other runners did, but he did so at an entrance on the opposite side of the stadium, and about a hour after he should have.
While this was all done in the full-sun of one of Oslo's better days, Lawrence may as well have been "leaping in the dark". And I have heard of him skiing over ridges in Norway, oblivious to the dangers ahead, only to find himself captured in a freezing lake scantily clad in a high-tech ski outfit near to death, frozen.
Lawrence is a master of "leaps in the dark" – on his own admission, way back in 1975, the stage was set for his excursions into an uncertain future – his own lifetime of uncertainty and internationalisation. Uncertainty and internationalisation are to Lawrence as are mashed potatoes and herrings to the Norwegians.
In L. S. Welch's PhD thesis, on page 2, he draws upon the first paper by Johanson and Vahlne in JIBS to take as his point of departure their thesis of "the sequential cumulative nature of the internationalisation process". His citation in his thesis to this now famous 1977 JIBS paper reads as:
"A Model for the Decision Making Process affecting the Pattern and Pace of the Internationalisation Process of the Firm" – a very early version of this famous article.
In the abstract of this thesis, L. S. Welch writes:
“A basic contention of the model is that for any new expansion decision to be made, the relevant decision-maker must perceive the stimuli as being sufficiently strong to warrant action, provided the risk and uncertainty of so doing has been, or is capable of being, reduced to acceptable levels". (p.i)
(As an aside, I note that Lawrence achieved a response rate of 8.7% with the survey that provided the empiricism for his PhD). Maybe this early experience with surveys conditioned his reluctance to pursue survey-based research for the remainder of his career ---ummmm, an outcome inconsistent with his uncertainty preferences !!!!).
Lawrence has now, and remained so since the thesis was written, one who has teetered on the edge of undertaking research in that ever-so-difficult patch as is uncertainty. In his thesis, he writes on p.29:
"It is a major contention on the internationalisation model to be outlined that the level of risk and uncertainty will have a major bearing on the decision-making process… it seems logical to assume that the "more information one has, the less one's subjective evaluation of uncertainty". This is somewhat of an over-simplification though, especially when risk and uncertainty are approached from a cognitive or perceptual point of view. The perceptual approach to uncertainty emphasises that the environment, or any 'bit' of information pertaining to it, only has meaning in terms of the way in which it is perceived by the individual. For this reason, "variations in uncertainty are related to the characteristics of the individual". ….For one individual the availability of more information may affect no change in uncertainty whereas another person perceives a better understanding of the environment and therefore less uncertainty. This approach is an important departure from the economic view of uncertainty for it implies that more information will not necessarily remove uncertainty. The perceptual analysis of uncertainty argues against a simple presumption that more information automatically means a reduction in uncertainty."
In a rather curt scan of Lawrence's publications, I unearthed few references to uncertainty, and those papers in which uncertainty is mentioned, it's done so rather fleetingly. This was to be a “leap in the dark” not yet taken by Lawrence.
This is in no way a criticism of Lawrence's work – far from this being so – rather, it attests to just how elusive this concept is in our work – albeit being the fundamental that underpins the very nature of internationalisation decisions.
I found mention of uncertainty in the 2002 MIR piece of Petersen, Welch and Liesch… in the 1988 JIM piece by D. Welch, Welch, Young & Wilkinson.. in the 1997 MIR piece by Benito and Welch … and in the 1996 MIR piece by Korhonen, Luostarinen & Welch.
This is to say, Lawrence, it has come time for you to return to the 70s and your thesis imaginings and to bring forth that long-awaited piece on uncertainty and internationalisation.
In his concluding remarks of the thesis, in a section titled "The internationalisation model as an exercise in theory", Lawrence writes:
“An even more basic departure from the traditional model of the firm in the theoretical construction of the internationalisation model is represented by the introduction of the role of perception. In the theory of the firm the problem of how any stimulus, or bit of information pertaining to it, is perceived is removed from consideration because the firm responds to the information in the objective form it is received. …. In the internationalisation model the information pertaining to any stimulus only has influence to the extent, and in the form, that it is perceived. The perceptual process is crucial, and any given bit of information may produce a range of perceptions amongst different decision-makers. As a consequence, behavioural response cannot be simply deduced from the existence of a given environment stimulus to the firm.
The importance of the perceptual process has been noted by economists, although readily dismissed within the mainstream of microeconomic theory. Hahn has commented that "the distinction between the perceived environment and the environment and the consequential importance of the theories which are held by agents seems to me bound to become increasingly important in economic analysis".
The internationalisation model presented here takes a step in the direction of introducing the role of perception in an essential way into theorising about the firm”.
It is interesting to read in a literature just after Lawrence wrote his thesis in the mid-1970s, published in AMJ, by John Slocum et al, and incited by the emerging interest in contingency theory, discussion on uncertainty. In particular, this management literature asked the research question: Is uncertainty objective or perceived? This work concludes that: "The perception of uncertainty is not to be a direct result of an individual's environment. However, the environment does provide basic inputs into the individual's mapping processes. In addition, the environment is a moderation of sources of perceived uncertainty variability".
Lawrence was writing about this very same thesis in the internationalisation field, even earlier.
To a fine colleague and friend, a unknowing mentor of mine, Lawrence, one practised at "leaps in the dark" and one highly internationalised, this is you: uncertainty and internationalisation. If you were to begin your "leap in the dark" into academe today, you might well be messing about in the internationalised world of non-ergodic dynamics within complex industrial networks, where the future is not merely a statistical reflection of the past…… a world where not all is known, and even more instructive, a world in which not all is even knowable ….. a world in which deterministic uncertainty has a place but one in which deterministic uncertainty is not the only uncertainty, and a world where economic and managerial decisions are subject to managerial judgment. This the world of true uncertainty … Knightian true uncertainty ……..You began with that most difficult of all international business variables to understand and manage, Lawrence – uncertainty – and I look forward muchly to messing about in this patch with you, as we have often discussed ….. and joining with you in some “leaps in the dark” once again.
Peter W. Liesch