An ethnocentric approach to staffing policy is one in which key management positions in an international business are filled by parent-country nationals. The polycentric approach is a staffing policy that the host country nationals are recruited to manage subsidiaries in their own country, while parent country nationals occupy the key positions at corporate headquarters. The geocentric approach is a geocentric staffing policy that the best people are sought for key jobs throughout the organization, regardless of their nationality (Hill, 2014).
Globalization processes over the years has directed the development of large multinational companies expand across countries and continents. This process has caused a main issue for global companies to find the precise consistency with the local autonomy among subsidiaries and corporate control. A French multinational company has experienced the process of restructuring and “internationalization” due to acquisitions of Anglo-Saxon multinational companies. The acquisition changed the highly centralized approach to authority, implementing a decentralized structure led by the Corporate Center. When the French managers were placed in charge of the foreign subsidiaries doubling size and geographic responsibilities in activities, causing inefficiencies in the organizations. The ethnocentric model, when French managers were placed on the top of the foreign subsidiaries, becomes non-efficient in the organization which doubled its size and the geographical spread of its activities. It was debated that the globalization being forced constrained this multinational company change its approach to a geocentric approach from their previous ethnocentric approach due to its IHRM. The company’s approach to its IHRM demonstrates organizational and national cultures are essential in the contextual factors.
Hill, C. W. (2014). Global business today. (8th ed.). New York, NY: McGraw-Hill Irwin
References: Hill, C. W. (2014). Global business today. (8th ed.). New York, NY: McGraw-Hill Irwin
Muratbekova-Touron, M. (2008). From an ethnocentric to a geocentric approach to IHRM. Cross Cultural Management, 15(4), 335-352. doi:http://dx.doi.org/10.1108/13527600810914139
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