Question

What are the main advantages and disadvantages of the ethnocentric, polycentric, and geocentric approaches to staffing policy?

When is each approach appropriate?

Answer 1

What are the main advantages and disadvantages of the ethnocentric, polycentric, and geocentric approaches to staffing policy? When is each approach appropriate?

The answer to this question is contained in Table 15.1 in the text. An ethnocentric staffing policy is one in which all key management positions are filled by parent country nationals. 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 disadvantages of the ethnocentric approach are: (1) Produces resentment in host country, and (2) Can lead to cultural myopia. An ethnocentric approach is typically appropriate for firms utilizing an international strategy. A polycentric staffing policy requires host country nationals to be recruited to manage subsidiaries, while parent country nations occupy key positions at corporate headquarters. The advantages of the polycentric approach are: (1) Alleviates cultural myopia, and (2) It is inexpensive to implement. The disadvantages of the polycentric approach are: (1) Limits career mobility, and (2) Isolates headquarters from foreign subsidiaries. A polycentric approach is typically appropriate for firms utilizing a multidomestic strategy. A geocentric staffing policy seeks the best people for key jobs throughout the organization, regardless of nationality. The advantages of a geocentric approach are: (1) Uses human resources efficiently, (2) Helps build strong culture and informal management network. The disadvantages of the geocentric staffing policy are: (1) National immigration policies may limit implementation, and (3) It is expensive to implement. A geocentric approach is typically appropriate for firms unitizing a global or transnational strategy.