This document discusses different approaches to international staffing used by multinational corporations. It describes the ethnocentric, polycentric, regiocentric, and geocentric approaches, providing advantages and disadvantages of each. The ethnocentric approach involves staffing key positions with parent country nationals, while the polycentric approach uses host country nationals. The geocentric approach utilizes the best employees regardless of nationality. Expatriate selection is also discussed, including criteria, tests used, and factors that can lead to expatriate failure if not properly addressed.
2. INTERNATIONAL
STAFFING
The decision of international staffing in
MNC depends on following factors:
General staffing policy on key positions in
HQ and subsidiary.
The ability of organization to attract the right
candidate.
The constraints placed by the host
government on hiring policies.
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4. ETHNOCENTRIC
APPROACH
Results in the staffing of key positions in
the MNC by PCNs.
MOTTO this works in my country,
so it must work in all other
countries.
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5. ETHNOCENTRIC
APPROACH
REASONS:
Lack of qualified HCNs particularly senior
management talent.
A desire to maintain good communication,
coordination, tighter control and a unified
corporate culture linked with corporate HQ.
A desire to transfer parent firm’s core
competencies to a foreign subsidiary more
expeditiously.
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6. ETHNOCENTRIC
APPROACH
ADVANTAGES:
Organizational control and coordination is
maintained and facilitated.
Promising managers are given
international experience.
Assure that subsidiary will comply with
company objectives.
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7. ETHNOCENTRIC
APPROACH
DISADVANTAGES:
Limits the promotion opportunities of HCNs
which may lead to reduced productivity and
increased turnover among that group.
The adaptation of expatriate managers to
new environment takes time during which
these expatriates make poor decisions.
Income packages of expatriates are 4
times higher than locals.
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8. POLYCENTRIC
APPROACH
The MNC with this approach staff its
foreign subsidiaries with HCNs and its
home office with PCNs.
MOTTO When in Rome, do
as the Romans do.
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9. POLYCENTRIC
APPROACH
ADVANTAGES:
Eliminates language barriers.
Avoids adjustment problems of expatriates
and their families and removes the need for
cultural awareness training.
Less expensive.
Gives continuity to the management of
foreign subsidiaries, thus reduces turnover.
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10. POLYCENTRIC
APPROACH
DISADVANTAGES:
The gap between HQ and subsidiaries
increased which becomes difficult to be
managed.
Limited career opportunities for HCN and
PCN managers.
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11. GEOCENTRIC APPROACH
This approach utilizes the best people
for key jobs through out the
organization, regardless of nationality.
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12. GEOCENTRIC APPROACH
REASONS:
Highly competent employees are available
not only at HQs but also in subsidiaries.
International experience is a condition for
success in top positions.
Managers with high potential are constantly
ready to be transferred from one country to
another.
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13. GEOCENTRIC APPROACH
ADVANTAGES:
Enables an MNC to develop an
international executive team.
Overcome the federation drawback of
polycentric approach.
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14. GEOCENTRIC APPROACH
DISADVANTAGES:
Host govt. pressurizes MNC to employ high
number of HCNs.
Expensive to implement because of
training and relocation expense.
Time consuming.
Requires more centralized control of
staffing.
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15. REGIOCENTRIC
APPROACH
Refers to the functional rationalization
on a more than one country basis.
Regionally oriented approach where an
MNC divide its operations into
geographical regions and transfer staff
within those regions.
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17. REGIOCENTRIC
APPROACH
DISADVANTAGES:
It provides federalism at regional basis
rather than country basis. This serves as a
barrier in taking a global stance.
Limits career progression opportunities to
the regional level.
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18. ISSUES IN STAFF
SELECTION
Expatriate selection
Selection criteria
Use of selection tests
Other factors in expat selection
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19. EXPATRIATE SELECTION
The major challenge in international
staffing is Expatriate selection.
Incase of expat selection, main issue is
the Expatriate Failure.
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20. EXPATRIATE FAILURE
The premature return of an expatriate
before completion of assignment is
referred to as Expatriate Failure.
It incurs direct as well as indirect cost
on the organization.
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21. EXPATRIATE FAILURE
DIRECT COST:
Airfares
Associated relocation expenses
Salary
Training
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22. EXPATRIATE FAILURE
INDIRECT COST:
Affecting organization
Loss of market share
Difficulties in dealing with the host govt.
officials.
Affecting Expats
Loss of self esteem
Loss of self confidence
Loss of prestige among peers
Reduced motivation
Loss of promotional opportunities
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23. EXPATRIATE FAILURE
REASONS:
Spouse/partner dissatisfaction
Family concerns
Ability to adapt
Wrong Candidate selection
Job fails to meet expectations
Job performance
Quality of life
Remuneration dissatisfaction
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24. SELECTION CRITERIA
Technical ability
Cross cultural suitability
Family requirements
Country cultural requirements
Language
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