There is good news; since my term as Dean will be ending with this year´s annual meeting in Valencia, the Fellows had to elect a new Dean – a task which has been successfully accomplished under the guidance of our Secretary/Treasurer. I will be pleased to hand over to my successor, Professor Daniel Van den Bulcke, at that meeting hoping that he will find “the house in order”.

Looking back to our Fribourg meeting in 2006 where I was honored to be inducted by my predecessor and Foundation Dean, Professor John H. Dunning, time has been flying so fast as if it had been yesterday. In spite of this, during the past three years I think the Fellows were able to help further develop our scholarly field in teaching, education, research and outreach into the real world of International Business and Management, and to accomplish some tasks with a view of supporting EIBA, in particular our group of upcoming young researchers. Apart from individual activities of the Fellows a number of instruments have been established towards these aims, first and foremost the “Fellows Session” at our annual conference.

In Catania 2007 the topic of this session was “International Corporate Governance”, chaired by the Dean, and Professors Shirley Daniel, University of Hawaii, Lars Oxelheim, Lund University, and Marjan Svetlicic, University of Ljubljana as panel members. In Tallinn 2008 the topic was “The Nation State and the Global Corporation”, chaired by Professor Seev Hirsch, Tel Aviv University, and Mr. Eli Hurvitz, Teva Pharmaceutical Industries, Israel, Mr. Andres Sutt, Bank of Estonia, and Professors Francesca Sanna-Randaccio, University of Rome, and Lou Wells, Harvard University as panel members. In Valencia 2009 the session will be in memory of, and dedicated as a tribute to John H. Dunning and his Legacy in International Business, co-chaired by the (outgoing and incoming) Deans, and Professors Peter Buckley, University of Leeds, John Cantwell, Rutgers University, Seev Hirsch, Tel Aviv University, and Sarianna Lundan, University of Maastricht as panel members.

A special mention should be given to the EIBA Fellows showcase on “The European Union at Fifty”, presented at the 50th anniversary meeting of the AIB in Milano 2008. This session was initiated by Professor John Cantwell, Rutgers University, and organized by Professor Daniel Van den Bulcke, University of Antwerp, with Professors John H. Dunning, University of Reading and Rutgers University, Juan Duran Herrera, Universidad Autonoma Madrid, Marjan Svetlicic, University of Ljubljana, and Vitor Corrado Simoes, Universidade Técnica de Lisboa as panel members.

A major instrument to support our young researchers is the “EIBA Fellows Award to a Promising Young Researcher”. This award has been sponsored for the second time by the German Wandel & Goltermann Foundation. In 2008 Dr. Jonas Puck had been selected from among a number of very good applications from all over Europe and one from the U.S. The purpose of the award is to help broaden the research program of young scholars, to widen their network of research contacts and to open opportunities to engage in international research collaboration at an early stage of their academic careers. The prize money amounts to € 15,000 which the awardee has used for his project on “The normative value of TC economics and institutional theory for IJV to WFOE conversions in the Peoples Republic of China”.

As an innovation Dr. Puck had successfully applied for an Award Recipient Panel at last year´s EIBA conference in Tallinn on the topic of “Theoretical perspectives and empirical evidence on post-entry ownership changes”, including himself and Professors Macharzina, Hennart, Ambos and Holtbrügge as panelists. It should be noted that Dr. Puck had been offered a professorship shortly after receiving the award, as was the case with our first awardee in 2005, Dr. Jahan Peerally, who took up an Assistant Professorship at Montreal. Professor Puck now teaches as a full professor at the Economics and Business University, Vienna. He has recently completed the final report about his project of which you will find a short summary in this newsletter. Should anyone be interested to obtain the long version Professor Puck (Jonas.Puck@wu.ac.at) no doubt will be happy to submit a copy.

In order to make EIBA more known and visible, and to improve the interaction with the real world of International Business and Management the Fellows have been electing honorary members from academia, business, government, politics and other societal institutions since 2005. In the last three years Dr. DeAnne Julius of Chatham House, The Royal Institute of International Affairs, United Kingdom, Mr. Eli Hurvitz of Teva Pharmaceutical Industries, Israel, and most recently Drs. Neelie Kroes, European Commissioner of Competition, have been elected to this illustrious group, preceded by Mr. Jorma Olila of Nokia, Finland, and Dr. Karl Sauvant, formerly with UNCTAD, no at Columbia University, who were elected in 2005 and 2006, respectively. The announcement of our new Honorary Distinguished EIBA Fellow of 2009 has been included in this newsletter.

Finally, we also have taken care of ourselves in further developing our group by adding new forces with fresh engagement and innovative ideas. Over the last three years five new Fellows were elected, including Professors Jean-Francois Hennart and Marjan Svetlicic in 2007, Pervez Ghauri and Örjan Sölvell in 2008, and Sarianna Lundan in 2009, which makes for a total of 18 EIBA Fellows at present. The most rewarding element of my tenure as Dean was the felt colleagiality among our group, in particular as regards the close and delightful interaction with our Foundation Dean, Professor John H. Dunning, OBE, who forged the development of the body of the Fellows in a distinct manner.

Needless to say, that his passing away in the beginning of this year marked the most saddening incidence during my term of office. Professor John Cantwell has kindly agreed to prepare the obituary for this newsletter on behalf of the Fellows.

The most influential scholar in international business, John Dunning has been our great mentor. His legacy is not only linked to the leadership in establishing and developing IB from an economist´s standpoint but rather to his forward-looking programmatic approach in positioning it as an interdisciplinary field of study in his late works. He presented this program for the future IB research agenda in a paper which I had invited him to prepare as keynote address for the VIIIth World Congress of the “International Federation of Scholarly Associations of Management (IFSAM)” in Berlin in October 2006, and for which he chose the title “A New Zeitgeist for International Business Activity and Scholarship”. It is in this spirit of the new zeitgeist that we will keep up his memory, now and in the future, with respect to the sharpness of his thought, the brilliance of his word, the nobleness of his mind, and the kindness of his behavior.

In closing I would like to thank all of the Fellows for their support, cooperation and friendship, in particular I thank Professors John Cantwell and Vitor Corrado Simoes for having served as Secretary/Treasurer with enthusiasm and distinction. My best wishes for a successful tenure go to the new Dean, Professor Daniel Van den Bulcke.
 

In March 2008 I applied for the EIBA Fellows Research award. By that time, I was a Lecturer of International Management at the Department of International Management, University of Erlangen-Nuremberg and was pursuing my postdoctoral qualification. In June I received an email from Prof. Macharzina, Dean of the EIBA Fellows, stating that I was the recipient of the award. I will never forget the moment I fully understood the content of this Email. To me, receiving the award was not only a great and unexpected honor but also a great chance for my career in the field.

The title of my project is “The normative value of transaction cost economics and institutional theory for IJV to WFOE conversions in the People’s Republic of China (PRC)” and is an extension of a previous project that I conducted with Dirk Holtbrügge (Nuremberg) and Alex Mohr (Bradford). In this previous project we analyzed factors that influence post-entry ownership changes. We found that, while a large body of research has dealt with entry mode choice in general and foreign firms entering the PRC in particular, there has, until recently, been comparatively little interest in the change of an IJV into a WFOES and in factors that lead firms to change their ownership mode in foreign markets after entry. As a result, we came up with an empirically tested model of ownership changes. However, the normative value of the model had not been tested by then. Doing so is the aim of my project that I’m conducting in cooperation with the Bradford School of Management and with support of the EIBA-Fellows Research Award funding. By now, I’ve finished my visits in China and England and am about to finish my work on the questionnaire. Even though there are still a number of hurdles to take, I’m personally happy about the progress of my project.

During my work on the project, I was able to strengthen my network within the research community. I conducted a Panel at the 2008 EIBA Conference in Tallinn and am still thankful for the agreement to participate of a number of established researchers in the field (Bjoern Ambos, Jean-Francois Hennart, Dirk Holtbrügge, Klaus Macharzina, Hafiz Mirza, Alex Mohr). I perceived the panel as very stimulating for my project and believe it might be worthwhile for future awardees to do the same. During my project, I furthermore came in contact with Gerald Yong Gao (University of Missouri) and Dean Xu (Hong Kong University) who are working on a similar project using a real options perspective and we now agreed to cooperate with our projects. In addition, I had a number of interesting discussions with practitioners during my journeys and held two project-related seminars that will be very fruitful for future research.

I want to repeat my thanks to the EIBA Fellows and the Wandel and Goltermann Foundation for the creation and funding of the award. Even though I’ve not yet finished the project, I believe the award has strongly affected my life as a researcher. I believe it is a great tool to support young researchers in many ways. The award contributed to my network, my project management skills, and last but not least to my career as I’m now a Full Professor of International Business at WU Vienna.
 

Introducing Teva – Ten key facts:

1. We are older than our Nation State - which is only 60 years old. At Teva we have already celebrated our 100th anniversary. The company was established in Israel in 1901;
    
2. Teva's Market Cap has increased from $200 million in 1987 to almost $35 billion- before Barr!
    
3. Sales have grown from $90 million in 1985 to over $12 billion in 2008!!
    
4. World’s largest generic pharmaceutical company - Teva is Number One - with its market share in the US increasing from 8% in 1997 to over 21% in 2008;
    
5. Strategy of Leadership and focused strategic geographic growth;
    
6. Generic market position achieved by starting in the US in 1985, through internal growth and a series of mergers, with Biocraft, Copley, Sicor, Ivax, and soon Barr as well as Berk, Biogal and Biochemie in Europe. Very recently a JV was started up in Japan. All these M&As are examples of a focused step by step geographic growth strategy;
    
7. In 1985 Teva employed 1700 people worldwide. Only 400 of these employees were located outside of Israel. In 2008 the company operated in over 60 countries and its global employment reached 30,000 people;
    
8. API- global production ability and capability backward (and forward) integration;
    
9. Strong R&D and strategic use of local science and academic resources as a unique relative advantage;
    
10. Innovative- branded portfolio- Israel's first innovative drug- Copaxone the world's largest selling treatment for Multiple Sclerosis.

Company Overview
Teva Pharmaceutical Industries Ltd. is a global pharmaceutical company specializing in the development, production and marketing of generic and proprietary branded pharmaceuticals and active pharmaceutical ingredients. Teva is among the top 20 pharmaceutical companies and among the largest generic pharmaceutical companies in the world.
With more than a century of experience in the healthcare industry, Teva enjoys a firmly established international presence, operating through a carefully tailored network of worldwide subsidiaries. Headquartered in Israel, 80% of Teva's sales, which totaled US$9.4 billion in 2007, are in North America and Europe. Teva has almost 30,000 employees worldwide and production facilities in Israel, North America, Europe and Latin America.

Teva is among the most traded shares on the Tel Aviv Stock Exchange and among the most widely held Israeli shares on NASDAQ. It is also traded on Seaq International in London and the Frankfurt Stock Exchange.

The Nation State and the Global Corporation

Opening statement of Eli Hurvitz, Chairman of Teva during the Fellows’ Panel in Tallinn

“As I have been asked to open the discussion on the panel’s theme entitled “The Nation State and the Global Corporation", it might be useful to start with a brief description of my background, so that you may better understand my views on this subject.

I am Chairman of the board of Teva Pharmaceutical Industries ltd, the world's largest generic pharmaceutical company. I have had the honor of serving as the CEO of this company for over 25 years, and as chairman for the last 7 years.

Teva is the largest public company in Israel, as well as the world’s leading producer of generic pharmaceuticals. We believe that we may be Israel's first truly multinational company. Teva has had a successful history of using a highly focused approach and did not try to operate as a conglomerate. With revenues growing from $91 million in 1985 to over $12 billion in 2008, Teva has bred its own class of professional managers and scientists. We are proud to have served as a bridge from Israeli science to the market and having been an important source of talent and capital for Israel's growing biotechnology sector.

I have been asked many times what it means to be a global corporation. I hope that I have been always consistent in my reply. Teva, as a corporation registered and incorporated in Israel, was and remains an Israeli multinational company. International and global ownership, with shares registered on multiple foreign stock exchanges are actually irrelevant to Teva's corporate identity - or as my colleagues in the industry are prone to say - to Teva's "DNA". Global operations, global sales, global commerce, all of these dimensions do not negate the national identity of a corporation. Cross border cooperation, transfers, sales, joint R&D, streamlined production, etc. do not contradict - and indeed may even be seen to complement - the national identity of any given global corporation.

Let me jump ahead with an example or two to try and emphasize my point. Does anyone question Coca Cola being an American company? Notwithstanding its worldwide success, does anyone really consider Sony to be anything other than Japanese? Is Nokia anything other than Finnish notwithstanding their global activities? IBM? Microsoft? The list is much longer than those examples. Many companies have succeeded on a global basis - many dominate their industry. Their success around the globe is undisputable. Yet each of these corporations has its own identity, the combination of many factors, one of which is its national identity.

In the 1980s we were a local Israeli corporation that also operated in Africa, and a producer of raw materials for the generic pharma industry. We wanted to move ahead, however. We knew that if we had been located in a large country, in a large market with the same market share that we had at home, with the pharmaceutical knowledge and experience that we had acquired –we could have been a one billion dollar company. Yet, we dreamed only of reaching a level of sales of US$ 100 million.

We developed in essence an in-house executive program- not unlike the one that is run at the Harvard business School, and we decided that in order to grow, we must reach out to foreign markets. We studied the markets of Western Europe and the United States. When we saw that Europe was - and still remains - splintered as a pharmaceutical market we decided to focus on the United States with a so-called three prong strategy of Generics, Specialty Generics and Innovative Products. We determined the Critical Success Factors ((CSF) that at the time were revolutionary and preceded later developments in the innovative pharma market place. We decided that in innovative products we would only develop products based on academic research carried out in local Israeli institutions, but already then, we saw our core business as Generics.

We built a flexible organization; we formed over one hundred ad hoc groups together with employees and managers, outside consultants and experts. We reviewed processes tackled each and every topic in production, QA, QC, etc. – from how to wear the sterile clothing thru the protocol for checking raw materials, active ingredients, etc. We changed the culture of our production dramatically (and learned interesting lessons on corporate culture through this experience) and in 1985 entered the US market. We set ourselves the goal of being among the leaders in generics, which later was developed further into our current strategy of leadership.

At a Financial Times Conference in London in the late 1980s where the "traditional" industry members met, and the topic was the growth through mergers, I was the only speaker representing the "small" generic companies in the industry at the time, and my topic was how a small company can survive in a world of giants. I started by saying that the answer was simple-and consisted only of two words - Be Big. I stressed that if you come from a small country that does not yet have its own wealth resources, and you have opted for a growth strategy, you must achieve leadership in one of your CSF and cultivate and nurture your inherent traits and culture, and motivate your employees that “we too can be BIG”. We can be better since in generics - where the price is all that matters – and being better than your competitors in generics always comes down to pricing. If you are better on each line item of your P&L statements - you will succeed!

When we consulted our experts and asked them what would happen when the Chinese would enter our markets, we had heated discussions. Yet, we remembered the advice from our management professors who told us that if you have an advantage you have to use it to the utmost and be even better. When you have a disadvantage, you need to make it irrelevant. We translated this into "generic" language – and made it clear that our price was always the lowest – and as it is a non issue, we now could concentrate on the rest, i.e. – supply system, quantities, etc. Our price adjustment system was automatic- we always met the competition’s lowest price- current and future.

We come from a small country with a small but very diverse market. Honing our skills in this small market, identifying our strengths and weaknesses has enabled us to expand on a global basis. Yet, we remain who we are, and who we want to be. Our culture was developed and flourished in places that often tried to extinguish it, perhaps helping our ability to thrive under difficult conditions, not to give up, to pursue our goals, yet not forget who we are or where we came from. We merged with many companies and in each merger learned new things from our partners. We learned to respect different cultures and even in difficult issues such as dismissing redundant employees in Hungary, where we had acquired a communist state owned pharmaceutical manufacturer whose management was practically appointed by the communist party, we succeeded to obtain the consent and agreement of the local and national authorities to reduce the workforce by over 700 employees. We dealt directly with the employees, helped them seek other employment, and supported some of them to start their own small businesses. Today we have around 5000 employees in Hungary and they are among the best and brightest employees we have.

Being Israeli means to me a degree of involvement and identification with the common cause, the task at hand that goes way beyond the call of duty. A commitment to strategy, to goals that are infectious is what is needed. Many of the managers and employees in the companies that we have acquired over the years on different continents have told us that our enthusiastic involvement and commitment has been inspiring to them.

Of course, our cultural background - as I have learned over the years while being at the helm of Teva – had "drawbacks" as well. Our inherent lack of discipline, of questioning authority, of “knowing better” is factors that can be acquired elsewhere, and with determination can be overcome. Indeed, at each of Teva's manufacturing plants there exists a similar culture, open, direct and transparent, not overly formal, with local management.

We have learned from our experience that small can be good, and that small can even be excellent. When one focuses on the real advantages - utilizing size when possible - corporations can achieve their goals, globally, while maintaining their true identity. I believe it's always important to maintain one's national identity.

We strongly believe that these characteristics are at the basis of our success and our current market position. We have maintained this positiion by keeping the corporate headquarters at home and by striving to lead by example and by consensus with the best values both from our partners and from Israel. This is reflected in what could be seen as complex organizational matrices, aimed at coordinating that what needs to be done but keeping the local culture and customs as they are. After all, this means working with the locals instead of against them”.

Eli Hurvitz with the Dean of the Fellows and the EIBA Chairman

By Klaus Macharzina, Dean of EIBA Fellows

On behalf of the EIBA Fellows I am pleased to announce that Neelie Kroes, European Commissioner of Competition has been elected Honorary Distinguished EIBA Fellow for the year 2009. This is only the fifth year the award has been confered. In 2005 we elected Mr. Jorma Olila of Nokia, in 2006 Dr. Karl Sauvant, formerly with UNCTAD, now at Columbia University, New York, in 2007 Dr. DeAnne Julius, formerly with Chatham House, The Royal Institute of International Affairs, London, and in 2008 Mr. Eli Hurvitz of Teva Pharmaceutical Industries, Israel. This year we will, however, not be able to follow our usual policy of inducting the new Fellow at our annual Gala Dinner because Mrs. Kroes cannot come to Valencia due to other obligations. The Fellows have agreed to award her the Honorary Fellow at our annual meeting in Porto. So she will hopefully be able to follow my invitation - which she has accepted - to attend our Porto Gala Dinner in 2010, in order to receive the award, and speak to us in person.

Mrs. Kroes was a Member of Parliament in the Netherlands for the People´s Party of Freedom and Democracy from 1971 – 1977, and again from 1981 – 1982. In 1977 she was appointed State Secretary for Transport, Public Works and Water Management, an office which she served until 1981, and again from 1982 – 1989, this time as Minister. Thereafter, she joined the Rotterdam Chamber of Commerce and served on a number of boards of companies such as Ballast Nedam, ABP-PGGM Capital Holdings N.V., NI Bank, McDonald´s Netherlands, Nedlloyd, Nederlandse Spoorwegen, and Lucent Technologies. In 1991 she was appointed Chairperson of Nyenrode University, and in 2004 to her present office
.
She studied Economics at Erasmus University in Rotterdam from which she received her MSc. in Economics and her Drs. (doctorandes) research degree. She also has an honorary doctorate from the University of Hull. In the “extra mural” dimension she has been serving in many cultural and social organizations. She is a Knight of the Order of the Netherlands Lion, and a Grand Officer of the Order of Orange-Nassau. In 1993 she was awarded the International Road Federation Man (!) of the Year, and she placed medium ranks in the Forbes Magazine´s List of The World´s 100 Most Powerful Women several times. A daughter of a Dutch heavy transportation entrepreneur she has the nickname “Steely Neelie” but her credo apparently extends to “open standards” and “open source”.
We are looking forward to having the honor of meeting Mrs. Kroes in Porto in December 2010 and to offering her our warmest congratulations on the Award.