Presentation on Ethnocentric approach Polycentric approach Geocentric approach

Geocentric
Presented Khushpreet

Ethnocentric
By Chawla

Polycentric

There are four major approaches to international staffing:

1.Ethnocentric approach 2.Polycentric approach 3.Geocentric approach

Definition:
It is an approach of multinational staffing

where in the personnel of the parent country holds the key position in the host country operations. The approach appears to be appropriate for small co just entering international operations or co with minimal international commitments over seas.

Reasons for pursuing an ethnocentric staffing policy:

Perceived lack of qualified host country

nationals The need to maintain good communication, co-ordination & control links with corporate head quarters For firms at the early stages of internalization, an ethnocentric approach can reduce the perceived risk. When a multinational acquires a firm in another country ,the local manager is replaced by a parent country national to ensure that the subsidiary complies with overall corporate objectives.

Definition:
A polycentric approach of staffing refers to

the staffing where in the host country national is placed in the key position of the subsidiary operations. This is because of the inherent differences in the overseas market. Local managers are recognized as being psychologically close to people & market

3. Geocentric Approach:
In this approach the multinational

environment is taking a global approach to its global operations It recognizes that subsidiary & corporate makes unique contribution with its unique competency. It is accompanied by a worldwide integrated business & nationality is ignored in favor of ability.

Advantages of Geocentric Approach:

It enables a multinational to develop an

international executive team which assists in developing a global perspective An internal pool of labor is developed for deployment thought the global organization It does not isolate the corporate & subsidiary It supports co-operation & resource sharing across units.

Ethnocentric

Polycentric
Host-country nationals manage subsidiaries, parent company nationals hold key Headquarter positions

Geocentric

Key management positions filled by parent-country nationals

Seek best people, regardless of nationality

Staffing Approach

Strategic Appropriateness Advantages

Disadvantages
Produces resentment in host country Can lead to cultural myopia Higher cost Limits career mobility Isolates headquarters from foreign subsidiaries National immigration policies may limit implementation Expensive

Ethnocentric International

Overcomes lack of qualified managers in host nation Unified culture Helps transfer core competencies Alleviates cultural myopia Inexpensive to implement Uses human resources efficiently Helps build strong culture and informal management network

Polycentric

Multi-domestic

Geocentric

Global and Transnational