Four approaches to international staffing, advantages and disadvantages. The globalisation of the world’s business economy has been particularly significant, resulting in an increase in the importance of, and interest in, international human resourcing. The international company is a type of multi-unit business organisation, which has a corporate centre in its home and its business units located in various host countries. International HRM distinguishes itself from domestic HRM primarily by having to deal with greater complexity, large amount of uncertainty and a higher level of operating risk. The basic functions however are the same.
HRM in the typical MNE is a tough task that, when successfully done, it drives the company’s strategy. When poorly done, it ruins careers and decreases profitability. Heenan and Perlmutter (1979) have provided four approaches to international staffing: polycentric, ethnocentric, geocentric and regiocentric. In ethnocentric approach managerial positions are filled by staff from the parent company. Ethnocentrism is based on a belief that the home culture is superior. This means that the organisational culture will mirror that of the home country and that little account is taken of the cultures of the host country. This approach might be cost effective but also can create conflict because it ignores local norms. Other disadvantages of this approach of international staffing is that there is no promotion opportunity for HCN’s as promotions for managerial position stays with PCN expatriates. There are also many difficulties with adjustment of PCN especially related to languages barriers. There can be compensation disparities between HCN’s and PCN’s and this can influence already high cost of expatriation. This approach ensures compliance with corporate objectives what is an important advantage. It also ensures that the company has qualified people on the managerial position especially is there is a shortage of those in HCN’s. In...
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