Bangalore Differences in compensation packages have significant implications on staffing success, expatriate performance and business performance. This article may not be reproduced, distributed, or mirrored without written permission from Panmore Institute and its author/s. While polycentric maintains employees from the same area, ethnocentric is generally adopted by headquarters by sending employees from the home or parent countries to the host country. With this concept a firm will not change how it prices or markets its products. The staffing policy approach suitable for the UAE is either polycentric or ethnocentric. The UAE government supports expatriate workers and allows expatriate management policies that require expatriate workers in top ranking positions. When does a global standardization strategy make most sense? Ethnocentrism can harm a company when it results in a failure to understand the views of your customers or clients. As such, it is necessary to account for different types of human resource management issues in international business. 1. In international recruitment, the Ethnocentric Approach is one of the methods used to find the most qualified candidates for the most appropriate positions. Premium When communicating . However, this promotion is limited to key positions in the local operations, and does not include central or corporate top positions. Headquarters usually have an ethnocentric approach to corporate culture transfer, as they impose their values and implement practices in the subsidiary with little cultural adaptation to the local . Culture Nationalities are mainly neglected under Geocentric orientation, with the firm being handled as a worldwide organisation rather than a major corporation that is strongly established in a single unique country. 5. | c. strategic alliance | | Business Courses / Communications 301: Diversity and Intercultural . In other words, the managers are chosen from within the part of the globe that most closely mirrors the host countrys geographical area of operation. Domestic product-mix without major modifications for the overseas markets. See our Privacy Policy page to find out more about cookies or to switch them off. Generally, ethnocentrism is thought of as the feeling that one's own culture is better than all others. However, a firms expatriate management policy and staffing policy in the UAE must support local workers in the organization to ensure that the regulations of the country are satisfied. Executive summary * Globalization is the process of international integration arising from the interchange of world views products ideas and other aspects of culture. Many organizations have traditionally relied on parent country nationals (PCNs) for staffing top management positions abroad for a number of reasons ("Global Human Resource Management"): It happens when a company chooses to expand its operations and concentrate on sales outside of the nation in which it is based. In this, Premium Published 24 October 2008. Business. An approach that is ethnocentric. Describe the nature of ethics. Due to a lack of competence among HCNs and the requirement for corporate communication in the Mastec organisation, the staffing method for subsidiaries in Thailand, Vietnam, and India adopted an ethnocentric structure. The ethnocentric model is one which a business feels and acts as though it is superior to other countries, both in its culture and products or services (Business, 2012). He has been a college marketing professor since 2004. Three types of human resource management issues in international business are as follows: In staffing in international business, HR managers must determine when or where to expatriation. In ethnocentric staffing, you recruit management who are the same nationality as the parent firm, but in polycentric staffing, you hire management who are from the same nationality as the host country. Regiocentric approaches are common in companies with widespread global operations. This perspective involves a consideration of the values, practices, or norms of people in their cultural context.. The nature and characteristics of international business are more complicated than domestic or local business. Bachelor of Business (Honours) in Information Systems Award These regulations cover local employment in addition to expatriate employment in the firms staffing policy. 1. This approach is based on the skills required for the position and the willingness of the candidate to blend in with the organization's culture. To perform staffing function effectively, there are three main approaches within international business identified: the ethnocentric approach, the polycentric approach, the geocentric approach (Dowling PJ, Festing M and Engle AD, 2008). Mr. L. Elwood Bankruptcy in the United States, Cork Institute of Technology Law Abbreviations An ethnocentric approach is one of several human resources strategies a company can employ when expanding operations into a new foreign country. Likely, many westerners would consider chopsticks to be a strange tool for eating. Entries Sitemap 2 Discuss how organizations, Premium For example, if we want to fill an executive role in a foreign country, we could: Relocate one of our existing employees who's a permanent resident of our parent country. Management For nearly five decades, international business (IB) research in general and the literature on organizational design and staffing of multinationals in particular have mainly treated ethnocentrism . Diff: 1 The geocentric policy approach to staffing assigns job positions to any person best suited for the position, regardless of the employees background, culture or country of origin. Geocentric staffing approach is adopted when companies implement a transnational orientation. This ensures new employees understand the challenges and changes in policies, procedures and task requirements of the operation, department and positions they hold. Marketing, International Business Essay Exam #2 All the strategies first formulated for the domestic nation or domestic business focus on the international business is secondary. 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. According to William Graham Sumner who coined this term in 1906, ethnocentrism is defined as having a view of things in which one's own group is the center of everything and all others are scaled and rated with reference to it. We use cookies for website functionality and to combat advertising fraud. Q: List elements of the national business environment that influence the standardization-versus-adaptation decision. However, the problem with the ethnocentric policy approach is that it does not fully support the transfer of local knowledge to the company. | b. geocentric | | However variety does spicy up life. Think of your ethnocentric beliefs as a take away meal. Additionally, putting parent company leaders in place can help ensure consistency in operations in foreign markets. What is polycentric approach in international business? 5.0 Assignment Question418 Law In staffing, HR managers would be concerned about how to bring expatriates to the UAE and how to ensure that these expatriates perform as expected in the context of operations in the UAE. He/she must be able to convey the right organisational processes structures and principals. The main advantage of this staffing policy approach is that it is highly flexible. Considered the reasons for using international assignments: position filling, management development and organization development. United Nations International Civil Service Commission (2001). Finally, synergistic approach is when companies . Communication is easier and companies run smoother due to the fact the employees are all related in their geographic location. this is a force strong enough to counterbalance the historical tendency toward anthropocentric and ethnocentric approaches that tend to advantage narrow learner self-interest. * Transfer, Premium For instance, executive positions are given to Americans in an office of an American company located in Indonesia. 2.0 Assignment Question14 Geert Hofstede Ms. C. OReilly Ethnocentric Approaches: The ethnocentric orientation is an assumption or belief that the home country i superior. 1620 Words7 Pages. Key management positions in an international business are filled by parent-country nationals. Ethnocentric approach is more of international strategic as it focuses on overcomes lack of qualified managers in host nation, unified culture and helps in transfer core competencies to a foreign subsidiary in transferring the appropriate managers. How Can Diversity Give a Company a Competitive Edge? The local subsidiaries do not have so many decision-making rights compared with the geocentric approach subsidiaries. International Business is one of the courses offered by the School of Management Asia e University (AeU). The company places a strong emphasis on the culture of its home nation while using this method, whereas polycentric approaches place a strong emphasis on the culture of the host country (Chakravarthy and Perlmutter, 1983). Pages Sitemap Discuss social responsibility in cross-cultural and international contexts. This staffing policy approach also provides better opportunities for locals to improve their careers through promotion. AACSB: Multicultural and diversity understanding Which is the most attractive approach and why? For instance, an employee may refer to his client as a 'moron' if the client needed some time to understand whatever the employee was trying to tell him. Globalization APPROACHES OF INTERNATIONAL BUSINESS Ethnocentric Polycentric Regiocentric Geocentirc. * Unify corporate culture. I have witnessed in my own community the sight of people who value norms and commit to what they want their lives to be. In Ethnocentric Approach, the key positions in . In terms of decision-making, the subsidiaries have very little autonomy, and control resides in head office. Ethnocentric approach is a staffing policy that is used in companies that has primarily international strategic orientation. Standardized is just one of a number of strategies with which firms successfully enter the international marketplace today. However, a disadvantage of this staffing policy approach is that it could be difficult to apply. For Multinational Corporation, the ethnocentric approach shows a centralized authority management style. YearBook "An ethnocentric approach to staffing policy fills all key management positions in an international business with parent-country nationals" (p. 531).