cover 2006

Dr. David Brock
Going Global
44 BGU NOW
D
r. David Brock speaks English
with a fascinating mix of
accents, and it’s no wonder: born in
Cape Town, South Africa, he
received his doctorate in Education
in the United States and taught for
nine years at the University of
Auckland, New Zealand before
settling in Israel. It was in 1997,
during a sabbatical year, that he came
to Israel for five weeks and met his
future wife, Shlomit. He went back
to New Zealand before ultimately
deciding to return to Israel. Today,
he teaches International
Management and Strategy in the
Department of Business
Administration at the School of
Management. “When I made
aliyah,” explains Brock, “my Hebrew
was not very fluent. I taught my
classes in English during my first
year, but every semester thereafter,
I added more and more Hebrew and
now I speak mainly Hebrew, with a
few English words thrown in.”
Brock’s fields of expertise and
research are global law firms,
multinational corporations and
planning in these companies and
their subsidiaries. “For many years,
it was a given that law could not be
global because each country has its
own legal system,” explains Brock.
“However, that started to change in
the 1990s. Governments deregulated
professional services and new
technologies emerged that facilitated
internationalization. International
professional service providers also
emerged, such as the firms KPMG
and Price Waterhouse Coopers of the
‘Big Four’; these service providers
typically supply accounting,
consulting and often legal services
on an international scale.”
Brock explains the development
of global law firms as a natural
outgrowth of this process. “Large
companies such as General Motors
and Wal-Mart don’t want to have to
start looking for a local attorney in
every new country they penetrate;
they would rather have one law firm
that takes care of all their needs.
Also, since other service providers
such as accounting have gone
global, law companies face pressure
to follow suit.”
When one company exports to a
number of different countries, there
are two opposing points of view:
multi-domestic and global. The
Internationalization, like any new
phenomenon or new technology, has a
learning curve. Eventually, it has a chance
to become profitable
multi-domestic approach views
each country as a separate market,
while the global strategy is, well,
more global. “Take McDonald’s, for
example,” says Brock. “Every
McDonald’s tries to maintain the
same style of service, the same
Golden Arches ambience, the same
Egg McMuffin. You can pick out a
McDonald’s in every Main Street
all over the world. The fries are
always the same, as are the Idaho
potatoes. True, there are differences:
Israel has the only kosher
McDonald’s, New Zealand has
Kiwi-burgers and each country has
its own local regulations. You could
say that McDonald’s is 90 percent
global and only 10 percent multidomestic.”
But there is a catch: it is not at all
clear whether internationalization
pays off. “Our research,” says Brock,
“shows that internationalization, or
leaving one’s home country to
market goods elsewhere, has its
drawbacks. The firm often goes from
a more profitable market to a less
profitable one, causing a loss in
revenue; and it loses its hard-earned
home reputation in an unfamiliar
new market. This impinges on rate
of development, on reputation and
on wealth.”
So why do firms internationalize,
despite the pitfalls? Why don't they
stop when it becomes less profitable?
“The customers demand global,”
explains Brock. “A customer gets
used to Hertz or Avis rental cars and