International Management Question (1) What are the major staffing approaches for international operation? Explain the relative advantages of each and the condition under which you would choose one approach over another? Answer (1) Major staffing approaches for international operation falls into one or more of the following staffing modes: ethnocentric, polycentric, regiocentric and global operation. Firms using the Ethnocentric staffing approachfill their key managerial positions with persons from headquarter that is parent country nationals.
Among the advantages of this approach, parent country nationals are familiar with the company goals, product, technologies, policies and procedures. This policy offers the advantages of maintaining close control. This approach is likely to be used when a company, determine a high need to maintain close communication and coordination with headquarter. This policy will also be chosen for new ventures requiring managerial experience in the parent company and there is a concern for loyalty to the company.
Its disadvantages include lack of opportunity for local managers which could result in poor morale, expense, poor adaption and lack of effectiveness of expatriates. With Polycentric staffing approachhost country nationals are hired to full key positions in their own country. This approach is more likely to be effective when implementing a multinational strategy. These managers are naturally familiar with the local culture, language and ways of doing business. It is usually less expensive for a company to hire a local than to transfer one from headquarter. HCNs are more likely to be accepted by people both inside and outside the subsidiary.
One disadvantage of the polycentric approach is difficulty coordinating activities and goals between the subsidiariesand the parent country, including the potentially conflicting loyalties of the locals. In the Global staffing approach, the best managers are recruited from within or outside of the company, regardless of nationality. This practice-recruiting third country national has been used for some time by many European multinationals. This policy provides a greater pool of qualified and willing applicants from which to choose, which in time results in further development of a global executive cadre.
Third country nationals bring cultural flexibility and adaptability to a situation; it can be more cost effective to transfer and pay mangers from some countries than others because there pay scale and benefit package are lower. Example IBM company…. Firms desiring a truly global posture should adapt a global staffing approach. In a Regiocentric staffing approach, recruiting is done on a regional basis says within Latin America for a position in Chile. This staffing approach can produce a specific mix of PCNs, HCNs, and TCNs according to the needs of the company or the product strategy.