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The first part of Volume 26 is dedicated to our annual feature from a leading scholar. The 2012 Recipient of the Booz & Co./Strategy + Business Eminent Scholar in International Management Award was Professor Jean-François Hennart of Tilburg University. Professor Hennart was honoured by this Award by the International Management Division of the Academy of Management at its annual conference in Boston, Massachusetts. His acceptance speech discusses the role of his work on transaction cost economics on international business and organizational structure. The speech is followed by the commentaries of Alain Verbeke and Jenny Hillemann of the University of Calgary and Arjen Slangen of Tilburg University.

In this chapter, we aim to shed more light on the role of formal institutional distance in firms’ foreign entry mode choices by accounting for the direction of that distance. Specifically, we distinguish between foreign entries where the host country is institutionally less developed than the investing firm’s home country (negative institutional distance) and those where the host country’s institutions are comparatively more developed (positive institutional distance), and explore whether these different types of entries are implemented through different equity-based modes. We take an information economics perspective to develop hypotheses on the effects of positive and negative formal institutional distance on firms’ choices between greenfields and acquisitions, and between full and partial ownership of greenfield and acquired subsidiaries. We test our hypotheses on a sample of 1,070 foreign entries made by 796 emerging market multinationals originating from 14 countries. Controlling for the host country’s formal institutional quality and other factors, we find that negative institutional distance increases the likelihood that a foreign entry takes the form of a greenfield investment rather than an acquisition and that positive institutional distance decreases that likelihood. We also find that negative institutional distance increases the chances that firms choose greenfield joint ventures over wholly owned greenfields and full over partial acquisitions. Finally, we find that positive institutional distance does not affect firms’ ownership stake choices, neither for greenfields nor for acquisitions. Overall, these findings argue for a nuanced, contingency view of the role of formal institutional distance in foreign entry mode choices. To the best of our knowledge, this study is the first to use information economics to construct a holistic picture of firms’ equity-based entry mode choices, taking into account both establishment and ownership modes.

In this chapter I will elaborate on Professor Jean-François Hennart’s impressive career in honour of him receiving the 2012 Booz & Co./Strategy+Business Eminent Scholar in International Management award. I will first present a sevenfold typology of his publications, classifying them into (1) conceptual studies on why multinational enterprises (MNEs) exist and use specific entry modes, (2) industry-focused case studies, (3) statistical studies of foreign entries, (4) review studies of entry mode choice, (5) country-level studies of international business activity, (6) conceptual studies scrutinizing multinationality-performance research, and (7) studies of emerging-market MNEs. I will then point out some of his qualities that in my view have contributed to his scholarly success. I will also describe the main academic and practical contributions of his work, and finish with a short conclusion.

Purpose – While previous studies have highlighted opportunities, this chapter sheds light on the negative effects of globalization that mature European multinational enterprises (MNEs) encounter.

Design/methodology/approach – We develop an extended network perspective to argue that globalization has resulted in several network-related threats for mature European MNEs.

Findings – European MNEs encounter three types of negative effects. First, globalization has caused local problems to increasingly spill over to other parts of MNE networks. Second, globalization has bred or strengthened countervailing powers, such as emerging-market MNEs, supranational governmental bodies, and international non-governmental organizations, which have eroded the power of mature European MNEs by entering their networks. Third, while globalization has caused the economic networks of MNEs to expand, it has made critical production factors scarcer since the availability of labour, land and natural resources has not increased accordingly. We conclude that globalization acts as a double-edged sword, which has not only offered opportunities for mature European MNEs but has also led them to experience important new and intensified threats.

Social implications – Earlier studies have shown that globalization can have positive effects for MNEs and negative effects for the sovereignty of nation states, domestic employment and the natural environment. The findings of the present study imply that globalization can also backfire on mature MNEs, thereby undermining their competitive position or even jeopardizing their continuity.

Originality/value – The negative effects of globalization for MNEs have remained understudied. Our contribution is to systematically analyze the neglected yet important ‘dark side of globalization’ that mature European MNEs encounter.

This paper is based on the punctuated equilibrium model of organizational change. We argue that there are multiple ways in which organizational change takes place. More in particular, by looking at the interaction between the two types of organizational change (radical and incremental), we identify two shapes of organizational change. We illustrate this by means of a case study of a large, Dutch beer‐brewing company. The study focuses on a major change in the distribution system of beer and a period of structural inertia, caused by long CEO tenure. The problems associated with the subsequent CEO succession and the different levels of management that interact in these change processes are also discussed. This leads to the identification of a number of drivers and determinants of shapes of organizational change.

Yair Aharoni is a Professor Emeritus at the Faculty of Management, Tel-Aviv University. He received his DBA from the Harvard University Graduate School of Business Administration. His doctoral dissertation – The Foreign Investment Decision Process – was published in a book version and was translated to Spanish and Japanese. He is a Fellow of the International Academy of Management and the Academy of International Business. During his long and distinguished academic career, Aharoni was the Daniel and Grace Ross Professor of International Business and later the Issachar Haimovic Professor of Business Policy – both at Tel Aviv University. He was the Thomas Henry Caroll Ford Foundation Visiting Professor of Business Administration, Harvard Graduate School of Business Administration (1978–1979). He was also the J. Paul Stitch Visiting Professor of International Business at Duke University (1987–1995) and the director of CIBER (Center of International Business Education and Research) (1992–1995). He published several dozens books and monographs in Hebrew and in English, more than 100 papers and chapters in books and more than 150 cases. For his academic achievements he was awarded both Landau Prize (2007) and Israel Prize in management science (2010).