Answer to Question #145350 in Management for Auguste Nkole

Question

Critically discuss staffing policies used by most of the international firms, as a systematic strategy for choosing the best candidate for various positions and compare their strength and weaknesses. (20)

Answer 1

1. The Ethnocentric Staffing Policy

The ethnocentric staffing policy refers to the strategy of a multinational company to employ managers for key positions from the parent headquarters instead of employing local staff.

Advantages

1. Ability to transfer the headquarters' culture to the foreign operation.

2. Political understanding of the headquarters' organization.

3. Effective communication between headquarters and the subsidiary.

4. Measure of control over the subsidiary.

5. Career and promotion opportunities for PCNs.

6. No need of well-developed international internal labor market.

Disadvantages

1. Parent country nationals continue to experience difficulties to adjust to international assignments.

2. The adaptation of expatriates is uncertain.

3. Complicated personnel planning procedures.

4. Expatriates are very expensive in relation to HCNs.

5. Legal regulations of the host country.

6. Government restrictions.

7. Repatriation.

8. High failure rate.

2. The Polycentric

The polycentric staffing policy describes a multinational's approach of recruiting host country nationals to manage subsidiaries in their own country. "There is little or no flow of personnel between the various countries".

Advantages

1. Language barriers as well as adjustment problems of expatriates and their families are eliminated.

2. Allows continuity of management within the host country.

3. The employment of HCNs is generally less expensive.

4. Enhances the moral and career opportunities of local staff.

5. Supported by host country governments.

Disadvantages

1. Difficulty of achieving effective communication between HCN managers at subsidiary level and PCN managers at corporate headquarters.

2. Difficulties in exercising effective control over the subsidiaries that arise when a multinational firm becomes a loose federation of independent national units with weak links to corporate headquarters.

3. Difficulty of coordinating the activities between headquarters and subsidiaries because of a lack of "boundary persons".

4. Reduced opportunities for personnel to widen their horizons and get an international view

5. This lack of international experience is a liability in an increasingly competitive environment.

3. The Geocentric

In the geocentric approach the best people are sought for key jobs throughout the organization, regardless of nationality.

Advantages

1. It enables a multinational firm to develop a pool of senior international managers (development of a network of persons with international experience and contacts across borders).

2. It reduces the tendency of national identification of managers with subsidiary units of the organization.

Disadvantages

1. This approach can be difficult to implement because of increased training, compensation and relocation costs.

2. A highly sophisticated personnel planning system is needed that allows worldwide matching processes between vacant positions and persons with adequate qualification profiles.

3. High costs.

4. The Regiocentric

In the regional approach, employees "are transferred to positions in subsidiaries in other countries, but stay within the same region".

Advantages

1. That HCN managers have the opportunity to influence decisions and compete for jobs at the regional level.

2. The development of a regional approach can help the MNC through the evolution from an ethnocentric or polycentric approach towards a geocentric approach.

Disadvantages

This approach is that it can lead to identification with regional rather than global objectives and may limit the development of a global approach.