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The purpose of this report is to explore the regiocentric approach to International Human Resource Management and discuss the impact the use of this approach would have in the case of expanding to a new location. The Expatriate Management Cycle is covered to identify any considerations that may have to be made during the process. The report evaluates the use of a regiocentric method for an international start-up situation. This report was written to inform the Managing Director of DBS Engineering Ltd of any issues that may occur during the expansion and to assess their current choice of using a regiocentric approach to business. This evaluation was carried out by researching secondary resources on management approached to IHRM and the Expatriate Management Cycle. Significant findings were then compared drawing out any benefits or disadvantages of regiocentric practice and identifying any issues that may have to be faced during the process. It was found that the regiocentric approach choses to group countries by similarities such a geographic area: North America, Latin America, Europe, North Africa etc. This approach combines the benefit of grouping operations to improve efficiencies and also allows for some extent of multi-cultural management; however it does not accept the idea of moving people out with their specific regions. This can limit learning and experience to some extent. It was found that overall the regiocentric approach is very viable in this situation with many benefits. There is however potential for sending a Parent-Country National to a new start-up no matter the region, to ensure the organisation maximises efficiency.
Table of Contents
The Regiocentric Approach
Expatriate Management Cycle
The author of this report is the HR Manager in DBS Engineering Ltd, a multinational organisation which has plans to expand further afield. The intention of the author is to examine the regiocentric approach to globalisation, which the company has already adopted and to analyse how this approach is likely to affect the management of expatriates in a start-up situation. Benefits and disadvantages of applying the regiocentric approach in a start-up environment will be discussed, looking in to each stage of the expat management cycle. Considerations that must be made during this process will be identified with significant recommendations provided. Conclusions will then be drawn of the overall effectiveness of the regiocentric approach in this circumstance. This analysis will be carried out by researching secondary information such as scholar articles, newspapers and textbooks. The Regiocentric Approach
The regiocentric approach can be described as “using managers from various countries within the geographic regions of business. Although the managers operate relatively independently in the region, they are not normally moved to the company’s headquarters” (Dlabay, Scott, 2008, p278). Geographical regions are areas which can be grouped by similarities whether cultural or geographical. An example of this is “A U.S. company that focuses on the countries included in the North American Free Trade Agreement (NAFTA) - the United States, Canada and Mexico” (Keegan and Green, 1997, p12). Similarly, if a US parented, Regiocentric Company has an Italian subsidiary; it is likely native Europeans would be recruited to manage it. (Dlabay, Scott, 2008, p278). This approach can be used as an alternative to the commonly accepted ethnocentric or polycentric approaches. According to Sparrow, Brewster and Larris, (2004, p164) “under an ethnocentric HRM perspective, subsidiaries will be staffed with expatriates in key management positions. Ethnocentric organisations will integrate...
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