INTERNATIONAL BUSINESS Distinguish between Ethnocentric and Polycentric Human Resource Management policies used by Multinational Corporations, clearly outlining the advantages and disadvantages of each. ETHNOCENTRIC 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. In the ethnocentric approach, the cultural values and business practices of the home country are predominant. Headquarters develop a managing and staffing approach and consistently applies it throughout the world. Companies following the ethnocentric approach assume the home country approach is best and that employees from other …show more content…
• Complicated personnel planning procedures. • The private life of expatriates is severely affected. • Difficulties in constant mentoring during the stay abroad. • This approach to staffing limits the promotion and career opportunities of local managers, which may lead to low morale and increased turnover. • Parent country nationals are not always sensitive to the needs and expectations of their host country subordinates. • Tensions between the expatriate executives caused by philosophical issues such as the clash of cultures and also by some fairly hard issues such as the often substantial income gap. • Expatriate managers are expensive to maintain: they may become insular in their attitudes and be prone to cultural myopia. The latter may result in management overlooking market niche opportunities. • Legal regulations of the host country that do not agree to the hiring of expatriates. • Government restrictions. • High failure rate from expatriates. POLYCENTRIC POLICY The Ethnocentric staffing policy refers to the strategy of a multinational company to employ managers from host country nationals in key positions in operations abroad. The practice of polycentric staffing believes that the managers being familiar with the culture have the ability to translate foreign guided programs to be more compatible with the culture of employees. Reasons for adopting a polycentric approach in the staffing of operations include the following: Host country
Ethnocentrism is considered to be the thinking that one’s own processes and procedures are better than the competition. (Barger) Every person and organization has a certain level of ethnocentrism in his or her thinking. The problem with ethnocentrism is that we are unable to understand that which we are unable to identify with. A leader must be willing to admit that they or their organization does not understand all the needs and wants of a culture. As soon as this is admitted to, the true learning process can begin. The author James O’Rourke wrote, “The more keenly tuned-in a society is to the interests and preferences of other cultures, the more quickly change will come.” (O’Rourke, p.282) If an organization is willing to open its eyes and be willing to learn, they will be able to make the necessary changes to positively impact both parties.
Performance criteria and goals are best established by combining the values and norms of each local environment with the home-office’s performance standards. An individual country profile should be developed and should take into account the foreign subsidiary’s environment. This profile should be used to review any factors that may have an effect on the expatriate employee’s performance. Such factors include language, culture, politics, labor relations, economy, government, control, and communication.
Expatriate staffs are ignorant of the local culture. Recruiting a local staff eliminates the cost of training an expatriate on intercultural issues. Because the expatriate staff is unfamiliar with the local culture, there will often be the struggle to acclimatize and adapt to the new culture. Additionally, the expatriate staff does not know how the employment system in the host country is so to recruit local staff will pose an enormous challenge for the expatriate staff (Malamud & Rotenberg, 2010). Additionally, expatriate staffs will not efficiently and effectively network with local stakeholders because of language and cultural
Q: Which of the following two concepts is more critical for international Human Resource Management: understanding the cultural environment or understanding the political and legal environment? Why? Include key terms and concepts from the textbook.
The ethnocentric staffing policy approach chooses United States as top ranking employees international operations. We will give executive positions to US citizens located in the manufacturing state of Tamaulipas, Mexico. The main advantage of this staffing approach is that it allows the EcoPlay! to make sure that the people in the top positions are experienced in the business of the manufacturing industry. This is because the people in the host country, Mexico, does not have enough skilled workers for staffing top positions in the industry. The ethnocentric staffing policy approach is also employed to make certain the culture of the entire industry is unified rather than diversified. The problem we might encounter with this approach is that
Dowling Peter J and Welch Denice E and Schular Randall S(1999), International Human Resource Management, South-Western College
Subsequently, this strategy will create an enabling environment that is biased in hiring process like in the case of the Maldives, where foreigners were given job opportunities because they had the right attitude yet, the natives had more outstanding qualifications for some of the jobs but they were denied the opportunities (Boella and Goss-Turner, 2013). Therefore, the organization should reduce the act of employing foreigners in its different branches across the world and focus on the natives of the given states dwelling more on their qualifications rather than their attitudes. This would lead to employees feeling more comfortable in their work environment and having a workforce that understands the culture the business is established in as well as being well skilled and educated in their
Human resource management functions in multinational companies are incredibly complicated by the need to adapt policies and procedures related to personnel, to differences between the countries, which is one of the branches. In particular, the countries cultural differences, differences in economic development and legal systems may require an international company adaptation programs of hiring, firing, training and remuneration for
It’s been shown that U.S expatriate managers have had a high rise in failure in their career. Therefore the foreign careers of U.S expatriate managers end up quickly or they are found to be ineffective by their seniors. The major factors contributing to the failure of U.S expatriate managers include family stress, emotional immaturity, cultural inflexibility, over work and physical breakdown. Let’s discuss the reasons of family stress and cultural inflexibility.
These findings suggest that an American company should not assume that it can adapt an ethnocentric approach and operate in a foreign country by its own rules. As shown in the case study and research, complexity of culture and other economic and social factors have a strong impact
In summary, the home culture of an expatriate predisposes them to certain behaviors and situations. It allows them to operate efficiently in that environment. However, moving to the host-culture changes that operating environment and makes their 'mental software ' less efficient and effective. Culture is clearly a relevant variable when expatriating employees and their families for international business assignments. Training can be applied to ameliorate these effects. Also, training provides insight into the procedural, substantive and informational aspects of their work and personal life in the host location.
Expatriation is when a company sends an employee overseas to work. Businesses needs to have a plan in place to insure a successful expatriation assignment. First, the business needs to make sure to choose the right person, who is open to new experiences and cultures. Second, the employer needs to prepare the expat and their family for what they will experience. Additionally, the business should have a program setup to prepare the expat with classes to teach about the culture the person will experience. If the area speaks a different language than the expat, the company should invest in a language tutor to help their employee. In this paper, I will discuss the person I selected for the expatriation assessment assignment. I will display
When it comes to global management, a manager must be educated on the country in which he or she is doing business with. Global managers are expected to effectively interact with employees, supplier’s customers or partners from foreign countries in order to reach their organization’s goals. In addition they must be well cultured and adaptable, lack of these skills can be detrimental to a business’ success and can lessen opportunities for that company. For example, my Kinicki and Williams (2013) talk about three different style of management, which are geocentric, ethnocentric, and polycentric. The textbook confirmed that being a geocentric is most effective, out of the three. A geocentric manager acknowledges that there are similarities and differences between their native culture and the one which they are in now. Furthermore, instead of using the method which is familiar to them, a geocentric creates a balance between how things are done in that particular country and how it is done at their homeland. Overall the key to dealing with cultural differences is being well-informed of the various customs and the culture, being able to adapt to the environment, and also learning the differences and similarities between another country and home. (Kinicki & Adams, 2013, p.105)
According to the works of Chaney & Martin (2011) and Harris & Moran (2000), they agree that international management skills are in need for the increasing scope of international trades and investments. A large number of multinational companies have expanded their businesses through both developed and developing countries. Some of the business invest directly and others are partnership arrangements and strategic alliances with domestic operations. Their studies show that independent entrepreneurs and small businesses have started investing and competing in the world marketplace. Thus, to acquire corporations’ objectives, there is exceedingly a necessity for the development of strategic framework for cross-cultural management and communication in the current competitive global market. Chaney & Martin (2011) also noted that, cultural awareness and cultural differences are strongly important to the multinational corporations’ success. A good understanding of the culture where business is implemented can make international managers productive and effective.
The most challenging decision that a company may face in internationalization is the degree of standardization or adaptation in its operations. The question of standardization or adaptation affects all avenues of a business’ operations, such as R&D, finance, production, organizational structure, procurement, and the marketing mix. Whether a company chooses to standardize or adapt its operations depends on its attitudes toward different cultures. These attitudes are defined by three orientations toward foreign culture: ethnocentric, polycentric, and geocentric.