How does one fit a lifetime of contributions to international business (IB) research into one book, especially when that period of time spanned the better part of 60 years? The answer is with great discernment and skill. Which is what Arie Y. Lewin, Ravi Ramamurti, and Elizabeth L. Rose have managed to achieve as editors of Standing on the Shoulders of International Business Giants – In Memory of Yair Aharoni.
Published by World Scientific, this book is tribute to the life and work of academic and economist Yair Aharoni (1931 – 2020). A pioneering figure in international business research, among Aharoni’s most influential studies were on internationalisation efforts of multinational enterprises (MNEs) and state-owned enterprises (SOEs) in developing or emerging economies.
The book is divided into four parts. The first being an introduction to the person who was Yair Aharoni. The second is an exploration of his intellectual contributions, including excerpts from books and articles he wrote. And the third and fourth parts are filled with tributes and elegies to the man himself, from peers and academics as well as members of the Academy of International Business (AIB) where Aharoni was a long-time Fellow.
Standing on the Shoulders of International Business Giants – In Memory of Yair Aharoni seeks to highlight just why Aharoni was so important to the field of international business studies. And it does a more than adequate job at that. This reviewer, for instance, will confess to not knowing much, if anything, about the subject of this book prior to reading it. I have since finished it with a better understanding and appreciation of Yair Aharoni’s legacy.
Reading this book enlightens one as to why Yair Aharoni was ahead of his time. After all, he was among the earliest to “explore the role of multinational enterprises (MNEs) from small countries, among the pioneers to study state-owned enterprises and their internationalisation, among the earliest to explore the globalisation of services, and at the forefront of exploring the complex relationships between MNEs and home/host government.”
In addition, Aharoni’s scope of research was also instrumental in raising awareness of the importance of MNEs adapting to cultural sensitivities in target markets. This includes understanding cultural nuances and being able to effectively adapt to that new culture in order to foster better communication and relationship building.
Economic development of developing markets, particularly through the impact of foreign direct investments, was also another key focus area for Yair Aharoni. And throughout his long career, he had many studies on the contributions of FDIs to industrialisation, job creation and technology transfer.
The Genesis of Yair Aharoni
Some of these studies – in the form of articles and book chapters written by Aharoni – have been recreated in this book. Taking up a significant portion of Part Two, they span more than 300 pages – starting from Chapter 5 and ending on Chapter 24.
Given that Aharoni’s collection of publications include around 72 articles and 30 books and monographs, it is quite impressive that the editors of this volume have managed to compress the most salient points into such a condensed volume.
It should be noted that Aharoni’s impact on international business research comes from the fact that he was not just scholastic or theoretical in his approach. Instead of relying on abstract theories, Aharoni sought to integrate them with real world practical cases – an activity which, quite often, led to him concluding that paper concepts are just that… paper.
He highlighted this in an essay reproduced in Chapter 6 – titled “A Few Lessons from My Long Experience in IB Research”. Here, Aharoni recounts his early days as a doctoral student at Havard Business School, where he was studying the effects of tax incentives on foreign investments.
He admitted that, as per his training in economics, the logical answer as to whether tax incentives would lead to investments was “yes”. And the more incentives, the better. However, upon conducting actual on-the-ground research – through examining documents and interviewing those in the decision-making process – Aharoni discovered that “tax incentives did not play the decisive role I had expected them to play”.
These days, it is a no-brainer to consider practical real world applications when conducting international business research. However, Aharoni did his doctoral dissertation in 1966 when such methodologies were almost unheard of.
And through that he discovered that, “Classical economics-based theory alone is insufficient to understand the complexity of real life. We must incorporate politics, culture and institutions. Only if all these approaches are woven into our theories may they be helpful for businessmen and for policy makers.”
Highlights from the Book
As this reviewer is neither an economist nor an international business expert, one is understandably reluctant to engage in a critique of Aharoni’s work. I will leave such a task to those who are more capable and knowledgeable in that regard.
Nevertheless, one has to say that reading this book was indeed an enlightening experience as it shed light on how certain international business trends have evolved. For instance, the evolution of multinationals is explored in great detail in Chapter 11, which is a reproduction of a paper penned by Aharoni and Prof Ravi Rammamurti titled, quite aptly, “The Evolution of Multinationals”.
Among the points touched upon by Aharoni and Rammamurti were the contributions of the sizeable Chinese and Indian diaspora to the respective economic rise of China and India and how technological advances enabled the growth of “micro multinationals”.
Also of interest is the study of how multinationals have changed, from being the preserve of large economies, to being increasingly from smaller countries. Not only that, but these enterprises may be called true multinationals in that they are not able to depend on a sizeable domestic market for survival. Case in point, Nokia from Finland, which derives 97% of its revenue outside of its native country.
It was also interesting to read about how the wheel has turned as far as attitudes to MNEs are concerned. Whereas they were once viewed with suspicion by those in developing nations as being threats to local enterprises, Aharoni and Rammamurti noted that this is no longer the case.
Instead, since the start of the 21st century, the richer nations – namely from North America and Western Europe – are the ones who are being increasingly protectionist. It is indeed ironic considering that the countries from which many MNEs come from today were once up in arms against MNEs from these more developed nations.
As stated, that is just one chapter, among many, which resonated with this reviewer. One has to give kudos to Aharoni’s writing style, which was scholarly enough to denote intellectual rigour and yet approachable enough to not alienate the layperson.
To get a better appreciation of what Yair Aharoni did, one only needs to read the glowing tributes that his peers painted of him in the book. Or, better still, study how his research helped influence culture in his native Israel, which has led to the country being acknowledged as the proverbial start-up nation.
Ultimately, whether you are a student of international business, an entrepreneur seeking to better understand market trends, or just an interested layperson, Standing on the Shoulders of International Business Giants – In Memory of Yair Aharoni is definitely a book worth checking out.
