Disadvantages of Ethnocentric Approach It becomes difficult to train or guide employees at far distant place away from the parent country. Discuss the advantages and disadvantages of a polycentric approach to staffing. The government restrictions in the host country may hamper the business of the parent company. Advantages of Ethnocentric Staffing approach Mobility of personnel represents one of the main differentials between domestic and international human resource management. in Economics from the University of Washington. This has been really helpful especially to the study i am doing currently. 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. All subsidiaries need to completely abide by each of the rules and regulations directed by their head branch in parent country. 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. Commerce Mates is a free resource site that presents a collection of accounting, banking, business management, economics, finance, human resource, investment, marketing, and others. MNC’s headquarter in parent country formulate and regulates all important decisions such as mission, vision and objectives for whole company. Culture fit, i.e. No need to have a well-developed international local labor market. What are the main advantages and disadvantages of the ethnocentric, polycentric and geocentric approaches to MARKETING strategy globally? The culture of the parent company can be easily transferred to the subsidiary company, thereby infusing beliefs and practices into the foreign country. Better coordination between the host and the parent company. There may be cultural clashes among executives from parent country and employees of host country. The Ethnocentric Approach An ethnocentric approach is best suited to international business. Considered the reasons for using international assignments: position filling, management development and organization development. Staff from parent country may face difficulty in adjusting themselves in host country because of differences in culture. In an ethnocentric staffing policy, management teams in the parent country of a company make all staffing decisions. The parent company can easily close watch over the activities of all subsidiaries. When is each approach appropriate? It promotes effective communication in between the parent and host company. Decide which staffing approach is most suitable for this particular case. Students also viewed these Accounting questions 1. Surely there are other tough issues confronted with the MNC which adopts ethnocentric approach. Geocentric Advantages & Disadvantages. Red Cross fills out their managerial position by PCN’s people. Enables easy transfer of parent country culture to the subsidiaries company. 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. Less cost is incurred in hiring the natives of the host country. But all the issues are arisen from the ethnocentric approach. The parent company can have a close watch on the operations of the subsidiary. Focus will be on the polycentric staffing approach. Mission, vision, objectives are formulated by the MNC’s at their headquarters, and the same is to be followed by the host company. In Ethnocentric Approach, the key positions in the organization are filled with the employees of the parent country. Difficulty in guiding employees living far away from the parent country. All the managerial decisions viz. When is each approach appropriate? Missed out the opportunity to hire the best personnel from the host country. The staff of the parent country may find it difficult to adjust in the host country due to the cultural differences. Opportunity of hiring best talented human resource from host country is missed. 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. There are four primary approaches that multinational companies use in staffing decisions, including ethnocentric, polycentric, geocentric, and regiocentric approaches. Advantages and Disadvantages of Ethnocentrism An ethnocentric attitude may be advantageous for certain groups, but at the same time it may be having disadvantages for the opponents. 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 is one of the international recruitment method in which all positions for international business around the globe are filled from parent country. Case Study: Staffing policies of The International Committee of the Red Cross is an example of ethnocentric approach of international staffing. 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. Ethnocentric Approach. Advantages of Ethnocentric Staffing approach 6 2.2 Disadvantages of Ethnocentric Staffing strategy 7 3. 2007), it has been found that researchers generally consider previous international experience to be of advantage because such experience teaches an individual the ability to generate strategies for adaptation in new situations, so the chances of assignment failure are minimized. Home » Business Studies » Ethnocentric Approach: Meaning, Advantages and Disadvantages. A geocentric company is one where the management looks at opportunities on a global scale. The cultural clashes between the executives of parent country and the staff members of the host country. 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 polycentric approach are: (1) Alleviates cultural myopia, and (2) It is inexpensive to implement. It becomes difficult to train or guide employees at far distant place away from the parent country. Required fields are marked *. 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. 1. These have been characterized as an ethnocentric approach, a polycentric approach and a geocentric approach. 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. 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 addition to being a seasoned writer, Louise has almost a decade of experience in Banking and Finance. Ethnocentric Approach: Meaning, Advantages and Disadvantages, International Business: Nature, Characteristics, Features, Advantages, Disadvantages of International Marketing, Multinational Companies: Definition, Features, & Characteristics, Scope and Importance of International Business, Advantages and Disadvantages of International Business, Advantages and Disadvantages of Contingency Approach to Management. What are the main advantages and disadvantages of the ethnocentric, polycentric, and geocentric approaches to staffing policy? This happens a … Blog Post Author Credentials Louise Gaille is the author of this post. polycentric Which of the following is an advantage of adopting a polycentric staffing approach? 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. Advantages of Regiocentric Approach. 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. Expatriates of parent country are more expensive in comparison to employees in host country. Difficulty in guiding employees living far away from the parent country. Explain the relative advantages of each and the conditions under which you would choose one approach over the other. Introduction2. Ethnocentric is a staffing policy that generally adopted by headquarters by sending employees from the home or parent countries to the host-country. 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. List of the Advantages of Ethnocentrism 1. 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. Avoids the need of having a well-developed local labor market at international level. (a). 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… Facilitates efficient transfer of technical know-how among various branches. For example, Jane works in China but she is a citizen of the Malaysia, where her company is organized and headquartered. Ethnocentric approach helps in attaining better coordination in between parent country and host country. Missed out the opportunity … Employees of parent country would perform better and will effectively represent interest of head branch. Government in host countries may impose strict restrictions on subsidiaries that will adversely impact business of parent company. An ethnocentric perspective eliminates social order criticisms. Ethnocentric Approach. 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. Expatriates are employees who work abroad on a temporary basis to achieve organizational goals (Olsen and … Advantages And Disadvantages Of Ethnocentric Staffing. Impressive, very good and in Bollywood style jhakkaas’. 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. A(n) _____ approach to staffing has the following disadvantages: it limits career mobility and it isolates headquarters from foreign subsidiaries. Your email address will not be published. For instance, Sunnies and Shias among Muslims and Protestants and Catholics among Christians are ethnocentric in respect of their sects. Effective communication between the host and the parent company. Conclusion 8 4. Still, many MNEs struggle to develop effective HRM policies. A polycentric staffing policy requires host-country nationals to be recruited to manage subsidiaries, while parent-country nationals occupy key positions at corporate headquarters. This approach takes, for example, when executives in the parent country feel employees in the host country are not qualified to make staffing decisions. A sense of understanding for local conditions The ability of a multinational to move from an ethnocentric or polycentric approach to a regiocentric approach. 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. She received her B.A. As I explained above this approach have its advantages and disadvantages. 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. What are the main advantages and disadvantages of the ethnocentric polycentric and geocentric approaches to staffing policy? To emphasise the difference between the four staffing approaches, ethnocentrism, polycentrism, regiocentrism and geocentrism will be illustrated. It is believed on rationale that recruiting individuals from parent country would be best over other ones. Ethnocentric staffing presents advantages and disadvantages. It is a staffing policy in which all key management positions in an international business are filled by parent-country nationals. References: 9 1. An ethnocentric approach is one of several human resources strategies a company can employ when expanding operations into a new foreign country. The expatriates from the parent country are much expensive as compared to the employees in the host country. One advantage of adopting a polycentric approach is that the firm is less likely to suffer from cultural myopia. An ethnocentric staffing policy is one in which key administration positions are filled by parent nation nationals.. Advantages and disadvantages of Regiocentric Approach Advantages Disadvantages There is an interaction between regional and subsidiary executives. What are the main advantages and disadvantages of the ethnocentric, polycentric, and geocentric approaches to staffing policy? 84. Combined with Hilton hotel’s operational environment differences, Hilton Group made a right decision of not adopting the ethnocentric approach. An ethnocentric staffing policy is one in which key management positions are filled by parent country nationals. 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. 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. 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. 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. Under the polycentric approach, local managers are hired to run the foreign subsidiaries of a multinational enterprise. (b)When is each approach appropriate? It enables in achieving effective control by company’s head branch over all its subsidiaries operating in distinct countries worldwide. When a society takes an ethnocentric approach, then it works to eliminate any criticism there might be of the social order. 2.1. Your email address will not be published. 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. Use this policy to determine whether the regiocentric, ethnocentric or polycentric approach suits best. Staff from parent country may face difficulty in adjusting themselves in host country because of differences in culture. Adopting a polycentric staffing policy requires host-country nationals to advantages and disadvantages of a ethnocentric approach to staffing recruited to subsidiaries! 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