This approach takes, for example, when executives in the parent country feel employees in the host country are not qualified to make staffing decisions. All subsidiaries need to completely abide by each of the rules and regulations directed by their head branch in parent country. Facilitates efficient transfer of technical know-how among various branches. What are the main advantages and disadvantages of the ethnocentric, polycentric, and geocentric approaches to staffing policy? Thus I think the disadvantages of the ethnocentric approach put a heavier negative role on the MNC management than the positive role put by the advantages of the ethnocentric approach. Discuss the budget with finance to make sure you’re able to apply the chosen approach and whether another one could work equally well with lower costs. Advantages And Disadvantages Of Ethnocentric Staffing. Employees of parent country would perform better and will effectively represent interest of head branch. Given the risks to a small business in globalizing, it is especially important to weigh the pros and cons of ethnocentricity against other alternatives to HR. Under the polycentric approach, local managers are hired to run the foreign subsidiaries of a multinational enterprise. 2.1. Ethnocentric is a staffing policy that generally adopted by headquarters by sending employees from the home or parent countries to the host-country. The staff of the parent country may find it difficult to adjust in the host country due to the cultural differences. No need to have a well-developed international local labor market. Expatriates are employees who work abroad on a temporary basis to achieve organizational goals (Olsen and … An ethnocentric perspective eliminates social order criticisms. (a). Opportunity of hiring best talented human resource from host country is missed. Missed out the opportunity … There are four primary approaches that multinational companies use in staffing decisions, including ethnocentric, polycentric, geocentric, and regiocentric approaches. In an ethnocentric staffing policy, management teams in the parent country of a company make all staffing decisions. in Economics from the University of Washington. The advantages of the polycentric approach are: (1) Alleviates cultural myopia, and (2) It is inexpensive to implement. Ethnocentric approach is one of the international recruitment method in which all positions for international business around the globe are filled from parent country. Commerce Mates is a free resource site that presents a collection of accounting, banking, business management, economics, finance, human resource, investment, marketing, and others. The parent company can have a close watch on the operations of the subsidiary. Required fields are marked *. When is each approach appropriate? What are the main advantages and disadvantages of the ethnocentric polycentric and geocentric approaches to staffing policy? Home » Business Studies » Ethnocentric Approach: Meaning, Advantages and Disadvantages. Use this policy to determine whether the regiocentric, ethnocentric or polycentric approach suits best. Effective communication between the host and the parent company. Advantages of Ethnocentric Staffing approach 6 2.2 Disadvantages of Ethnocentric Staffing strategy 7 3. Instead of focusing on the way that business gets done in a given country, it looks at how to conduct business anywhere in the world, based on common ways of communicating. Difficulty in guiding employees living far away from the parent country. The advantages of the ethnocentric approach are: (1) Overcomes the absence of qualified chefs in the host nation, (2) Unified culture, and (3) Helps move center capabilities. Still, many MNEs struggle to develop effective HRM policies. Introduction Over the last few decades, multinationals companies (MNCs) have become very powerful instruments for transfer managerial skills, proficiency, technical knowledge, and capital across nations. 84. MNC’s headquarter in parent country formulate and regulates all important decisions such as mission, vision and objectives for whole company. For example, Jane works in China but she is a citizen of the Malaysia, where her company is organized and headquartered. Decide which staffing approach is most suitable for this particular case. All key positions of organization are filled up by relocating present employees from headquarter of company or hiring peoples from parent country who are willing to work in host country. At first, its advantages will be pointed out, followed by a reflection of its disadvantages. It assists in infusing beliefs and practices into foreign country. Disadvantages of Ethnocentric Approach The staff of the parent country may find it difficult to adjust in the host country due to the cultural differences. In Ethnocentric Approach, the key positions in the organization are filled with the employees of the parent country. Expatriation3.1 The Advatages of Expatriation3.1.1 Expatriates Facilitate the Communication between the Foreign Operation and the Home Country3.1.2 Expatriation as a Means of Knowledge Transfer and Transmitter of Corporate Culture3.1… Enables easy transfer of parent country culture to the subsidiaries company. But all the issues are arisen from the ethnocentric approach. This approach focuses on hiring right candidates for right position within the business considering their skill set and willingness to mix with organization’s culture. Ethnocentric staffing presents advantages and disadvantages. the managers from the same region as that of the host country may not encounter any problem with respect to the culture and the language followed there. Combined with Hilton hotel’s operational environment differences, Hilton Group made a right decision of not adopting the ethnocentric approach. Disadvantages of Ethnocentric Approach It becomes difficult to train or guide employees at far distant place away from the parent country. When is each approach appropriate? These have been characterized as an ethnocentric approach, a polycentric approach and a geocentric approach. The expatriates from the parent country are much expensive as compared to the employees in the host country. A(n) _____ approach to staffing has the following disadvantages: it limits career mobility and it isolates headquarters from foreign subsidiaries. References: 9 1. All the managerial decisions viz. An ethnocentric approach is one of several human resources strategies a company can employ when expanding operations into a new foreign country. 27 Chapter Summary Looked at the various approaches to staffing international operations – ethnocentric, polycentric, geocentric and regiocentric – examining their advantages and disadvantages and factors that may determine the choice of these options. What are the main advantages and disadvantages of the ethnocentric, polycentric, and geocentric approaches to staffing policy? An ethnocentric staffing policy is one in which key administration positions are filled by parent nation nationals.. Advantages of Ethnocentric Staffing approach Mobility of personnel represents one of the main differentials between domestic and international human resource management. The government restrictions in the host country may hamper the business of the parent company. Blog Post Author Credentials Louise Gaille is the author of this post. Explain the relative advantages of each and the conditions under which you would choose one approach over the other. This approach is beneficial in a situation when a new subsidiary is set up in the host country, and the employees of the parent company visit there and initializes its operations. Ethnocentric Approach. It is believed on rationale that recruiting individuals from parent country would be best over other ones. A polycentric staffing policy requires host-country nationals to be recruited to manage subsidiaries, while parent-country nationals occupy key positions at corporate headquarters. The main advantage of ethnocentric approach is ease of execution as the strategies pursued in domestic markets are being replicated in international markets. The advantages of the ethnocentric approach are: (1) Overcomes lack of qualified managers in host country, (2) Unified culture, and (3) Helps transfer core competencies. The ethnocentric staffing approach h eavily focuses on the norms and practices of the parent company where upper management positions are typically held by corporate personnel from the home country. It promotes effective communication in between the parent and host company. Considered the reasons for using international assignments: position filling, management development and organization development. Ethnocentric approach helps in attaining better coordination in between parent country and host country. Surely there are other tough issues confronted with the MNC which adopts ethnocentric approach. Focus will be on the polycentric staffing approach. Less cost is incurred in hiring the natives of the host country. 1. Impressive, very good and in Bollywood style jhakkaas’. Mission, vision, objectives are formulated by the MNC’s at their headquarters, and the same is to be followed by the host company. It is a staffing policy in which all key management positions in an international business are filled by parent-country nationals. List of the Advantages of Ethnocentrism 1. Avoids the need of having a well-developed local labor market at international level. Discuss the advantages and disadvantages of a polycentric approach to staffing. It becomes difficult to train or guide employees at far distant place away from the parent country. It enables in achieving effective control by company’s head branch over all its subsidiaries operating in distinct countries worldwide. Government in host countries may impose strict restrictions on subsidiaries that will adversely impact business of parent company. A sense of understanding for local conditions The ability of a multinational to move from an ethnocentric or polycentric approach to a regiocentric approach. In addition to being a seasoned writer, Louise has almost a decade of experience in Banking and Finance. Red Cross fills out their managerial position by PCN’s people. 1. Geocentric Advantages & Disadvantages. The cultural clashes between the executives of parent country and the staff members of the host country. The culture of the parent company can be easily transferred to the subsidiary company, thereby infusing beliefs and practices into the foreign country. Staff from parent country may face difficulty in adjusting themselves in host country because of differences in culture. To emphasise the difference between the four staffing approaches, ethnocentrism, polycentrism, regiocentrism and geocentrism will be illustrated. Culture fit, i.e. Case Study: Staffing policies of The International Committee of the Red Cross is an example of ethnocentric approach of international staffing. An ethnocentric staffing policy is one in which key management positions are filled by parent country nationals. What are the main advantages and disadvantages of the ethnocentric, polycentric and geocentric approaches to MARKETING strategy globally? Polycentric staffing can reduce costs and help the business respond to local culture, but managers hit a glass ceiling and subsidiaries can wind up isolated from the corporate HQ. It is based on the rationale that, the staff of the parent country is best over the others, and also, they can better represent the interest of the headquarters. Introduction2. This has been really helpful especially to the study i am doing currently. When a society takes an ethnocentric approach, then it works to eliminate any criticism there might be of the social order. For instance, Sunnies and Shias among Muslims and Protestants and Catholics among Christians are ethnocentric in respect of their sects. Missed out the opportunity to hire the best personnel from the host country. What is International Staffing?2.1 The Ethnocentric Staffing Policy2.2 The Polycentric Staffing Policy2.3 The Geocentric Staffing Policy2.4 The Regiocentric Staffing Policy3. Your email address will not be published. Definition: The Ethnocentric Approach is one of the methods of international recruitment wherein, the HR recruits the right person for the right job for the international businesses, on the basis of the skills required and the willingness of the candidate to mix with the organization's culture. Better coordination between the host and the parent company. Definition: The Ethnocentric Approach is one of the methods of international recruitment wherein, the HR recruits the right person for the right job for the international businesses, on the basis of the skills required and the willingness of the candidate to mix with the organization's culture. Your email address will not be published. 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