International Staffing

LECTURE BY:
MISS HAREEM SIDDIQUI

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.
2INTERNATIONAL STAFFING

APPROACHES TO
INTERNATIONAL STAFFING
 4 approaches:
 Ethnocentric approach
 Polycentric approach
 Regiocentric approach
 Geocentric approach

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.

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.

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.

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.

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.

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.

POLYCENTRIC
APPROACH
DISADVANTAGES:
 The gap between HQ and subsidiaries
increased which becomes difficult to be
managed.
 Limited career opportunities for HCN and
PCN managers.

GEOCENTRIC APPROACH
 This approach utilizes the best people
for key jobs through out the
organization, regardless of nationality.

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.

GEOCENTRIC APPROACH
ADVANTAGES:
 Enables an MNC to develop an
international executive team.
 Overcome the federation drawback of
polycentric approach.

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.

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.

REGIOCENTRIC
APPROACH
ADVANTAGES:
 Allows interaction between executives
transferred to regional HQs.
 A step for MNC to move from purely poly or
ethnocentric or geocentric approach.

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.

ISSUES IN STAFF
SELECTION
 Expatriate selection
 Selection criteria
 Use of selection tests
 Other factors in expat selection

EXPATRIATE SELECTION
 The major challenge in international
staffing is Expatriate selection.
 Incase of expat selection, main issue is
the Expatriate Failure.

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.

EXPATRIATE FAILURE
 DIRECT COST:
 Airfares
 Associated relocation expenses
 Salary
 Training

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

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

SELECTION CRITERIA
 Technical ability
 Cross cultural suitability
 Family requirements
 Country cultural requirements
 Language

USE OF SELECTION
TESTS
 Personality tests
 Psychological tests

OTHER FACTORS IN EXPAT
SELECTION
 Dual career couple
 Female international managers
 Family considerations

International Staffing

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