Staffing
I will be talking about the staffing policy
So Staffing policy is concerned with the selection of employees for particular job.
At one level, this involves selecting individuals who have the skills required to do
particular jobs. At another level, staffing policy can be a tool for developing and
promoting the desired corporate culture of the firm. A strong corporate culture
can help a firm implement its strategy.
There are 3 types of staffing policies in international businesses: the
ethnocentric approach, the polycentric approach and the geocentric approach.
Lets have a look at each one of them.
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Starting with Ethnocentric approach
In Ethnocentric Approach, the key positions in the organization are filled with
the employees of the parent country. All the managerial decisions like 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 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.
Panasonic, Sony and Hitachi are some companies that follow ethnocentric
approach
So the Advantages of Ethnocentric Approach is that
1. There is better coordination between the host and the parent company.
2. The culture of the parent company can be easily transferred to the
subsidiary company, thereby infusing beliefs and practices into the
foreign country.
3. The parent company has effective control and they can have a close watch
on the operations of the subsidiary.
And the Disadvantages of this Approach is that
1. The staff of the parent country may find it difficult to adjust in the host
country due to the cultural differences.
2. There can be difficulty in guiding employees living far away from the
parent country.
3. The company can miss out the opportunity to hire the best personnel
from the host country.
4. Also there maybe cultural clashes between the executives of parent
country and the staff members of the host country as they may have
different values and work culture.
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Next is polycentric approach
In polycentric approach, the natives of the host country are chosen to run the
operations of the subsidiary and are given the authority to formulate strategies
for the business. The parent country nationals hold key positions at the
corporate headquarters and scrutinize the operations of the subsidiary from the
home office.
The rationale behind this approach is that the locals of the host country know
their culture better and can run the business more efficiently as compared to
their foreign counterparts.
Advantages of Polycentric Approach
1. The difficulty in the adjustment of expatriates from the parent country
gets eliminated.
2. The hiring of locals or the nationals of the host country is comparatively
less expensive.
3. The morale of the local staff increases as the managers are from the host
country itself
4. There is Better productivity due to better knowledge about the host
market.
Disadvantages of Polycentric Approach
1. Lack of coordination between the host and the parent company, due to
the absence of a link that gets created when expatriates from the parent
country hold the managerial positions at the subsidiary.
2. There can be lack of effective communication between the staff members
of both the host and the parent company, due to the language barrier.
3. The parent company may find it Difficult to exercise control over the
subsidiary.
4. Also conflict may arise between the managers of both the host and the
parent company due to the different thinking processes.
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The next is geocentric approach
The geocentric policy approach to staffing assigns job positions to any person
best suited for the position, regardless of the employee’s background, culture or
country of origin.
The rationale behind the Geocentric Approach is that the most eligible candidate,
who is efficient in his field, should be appointed for the job irrespective of his
nationality. This approach is followed by the firms that are truly global because
they follow the integrated global business strategy.
KFC, Viacom MTV, Mercedes Benz are example of geocentric company
So the Advantages of Geocentric Approach is that
1. MNC’s can develop a pool of senior executives with international
experiences and contacts across the borders.
2. The expertise of each manager can be used for the accomplishment of
MNC’s objective as a whole.
3. It also leads to Reduction in resentment, i.e. reducing the sense of unfair
treatment as it gives everyone equal opportunity
4. And it facilitates Shared learning, that is, the employees, will learn from
each other’s experiences.
Disadvantages of Geocentric Approach
1. The cost of training, compensation, and relocation of an employee is too
high.
2. Immigration policies, costs of worker relocation and diversity management
create pressure on HR management.
3. Proper scrutiny is required by the HR to select the most suitable person
for the job, which could be time-consuming.
4. This approach is very costly since the recruitment agencies or the
consultants are to be hired for the global search for eligible candidates.
