International Hrm Staffing Policies
INTERNATIONAL BUSINESS
Distinguish between Ethnocentric and Polycentric Human Resource Management policies used by Multinational Corporations, clearly outlining the advantages and disadvantages of each.
ETHNOCENTRIC POLICY
The ethnocentric staffing policy refers to the strategy of a multinational company to employ managers for key positions from the parent headquarters instead of employing local staff.
In the ethnocentric approach, the cultural values and business practices of the home country are predominant. Headquarters develop a managing and staffing approach and consistently applies it throughout the world. Companies following the ethnocentric approach assume the home country approach is best and that employees from other parts of the world can and should follow it. Managers from headquarters develop practices and hold key positions in the subsidiaries to ensure consistency.
Reasons for adopting an ethnocentric approach in the staffing of operations include:
Starting up operations in host countries. This is a critical stage, and there is a need to place individuals in host countries that are fully aware of the needs of the multinational and any specifications that have been set by the headquarters. Normally it is individuals who are most familiar with the goals and demands of the multinational and who have been with the corporation for some time.
Technical expertise; Many times multinational corporations need to transfer scientific and technological knowledge, professional expertise, and managerial skills into new operations. In many cases the knowledge and skills do not exist in the local workforce, especially if the product is highly specialized and utilizes cutting edge technology. Therefore, it is necessary to deploy home country nationals in host country operations.
Maintenance of financial control and facilitation of coordination; A major need for the headquarters is effective and efficient communication as well as trust with key
Distinguish between Ethnocentric and Polycentric Human Resource Management policies used by Multinational Corporations, clearly outlining the advantages and disadvantages of each.
ETHNOCENTRIC POLICY
The ethnocentric staffing policy refers to the strategy of a multinational company to employ managers for key positions from the parent headquarters instead of employing local staff.
In the ethnocentric approach, the cultural values and business practices of the home country are predominant. Headquarters develop a managing and staffing approach and consistently applies it throughout the world. Companies following the ethnocentric approach assume the home country approach is best and that employees from other parts of the world can and should follow it. Managers from headquarters develop practices and hold key positions in the subsidiaries to ensure consistency.
Reasons for adopting an ethnocentric approach in the staffing of operations include:
Starting up operations in host countries. This is a critical stage, and there is a need to place individuals in host countries that are fully aware of the needs of the multinational and any specifications that have been set by the headquarters. Normally it is individuals who are most familiar with the goals and demands of the multinational and who have been with the corporation for some time.
Technical expertise; Many times multinational corporations need to transfer scientific and technological knowledge, professional expertise, and managerial skills into new operations. In many cases the knowledge and skills do not exist in the local workforce, especially if the product is highly specialized and utilizes cutting edge technology. Therefore, it is necessary to deploy home country nationals in host country operations.
Maintenance of financial control and facilitation of coordination; A major need for the headquarters is effective and efficient communication as well as trust with key
References: Ball D.A and McGulloth W.H (1998); International Business; Introduction and essentials, Richard D. Irwin Dessler, G. 2003, Human Resource Management , 9th ed, Prentice Hall, Upper Saddle River , New Jersey , pp. 471-473: 'Selecting international managers ' Maore K.S (2007) International Business, published DLM Manual United Nations Report (1973:23): The Multinational Corporation in the World Development.