Factors Affecting Recruitment and Training in International Business

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Explain some of the factors which may affect recruitment and training in an international business.

Recruitment and training are two essential and unavoidable aspects of multinational firms. International businesses have designed their recruitment policies around either selecting Parent country nationals (PCN) also known as home country nationals; a citizen of the country where the multinational resides, host country nationals (HCN) or local people hired by a multinational or third country nationals. This essay will explain the various factors affecting organisations when recruiting as well as the training procedures adopted by business organisations …

According to (Hamill 1987 and Welch, 1994) factors affecting recruitment can be grouped into three categories, Firm-specific factors such as the strategy of the firm, their organisational culture, stage or mode of internationalization, type or niche of industry, size of international operation, reliance on international markets and top management perception of home HRM systems which would all contribute to the staffing policy they use. Host-contextual factors include political, legal, economic and socio – cultural factors. Other factors include trust and personal moral merits.

There are three approaches to staffing policy which a multinational firm can adopt. These are the ethnocentric approach, polycentric approach and the geocentric approach (Hill, 2011). A firm using the ethnocentric approach fills all key management positions with parent country nationals; this approach is often used when operations are carried out in less developed countries (Hills, 2011). Although this approach is more costly due to the high costs of using expatriates and might cause cultural myopia. This approach has positive advantages such as good communication, co-ordination and control links with headquarters (Shen 2006). Ethnocentric approach is used by firms using the international strategy. The polycentric staffing policy uses parent-country nationals for key positions at corporate headquarters and host-country nationals to manage foreign subsidiaries; Multinationals using this approach have adopted this localization strategy. This approach alleviates cultural myopia and is inexpensive to implement when compared to the ethnocentric approach (Hills 2011). However, this approach has its demerits. These are limitation on career mobility and isolating the headquarters from foreign subsidiaries. This can prevent integration between policies as there are cultural differences and language barriers (Hills, 2011). The geocentric staffing policy approach hunts for professional with the right qualities to fit into the advertised roles without paying emphasis on their nationalities (Hills, 2011). This approach is imperative to the survival of most organisations and it comes with quite a number of advantages. Some of the advantages are the efficient use of human resources, healthy synergy between cultures and strong informal management links (Hills, 2011). Organisations that employ this approach still have to deal with immigration policies as well as the cost of implementing this policy. Most organisations that employ this approach are using the global standardization or transnational strategy (Hills 2011).

Political Factors: Politically risk conditions can create an environment of uncertainty and political exposure that usually affect requirement in MNE’s. (Sundaram & black 1992). An example of this is the current crisis in Libya and the terror plagued Niger/Delta. This has affected foreign expatriate seeking work in those regions. Managing this uncertainty MNE’s may act to exert control by sending in more PCN (Parent country Nationals) employees and impose policies and practices prescribed by headquarters (Pucik 1992). The argument here is how effective will the PCNs be in effecting this change and how quickly given the fact that they might not be experienced or skilled enough to handle...
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