Chapter 19, Problem 1CTD

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

Summary Introduction

To determine: The merits and demerits of the polycentric, ethnocentric, and geocentric methods to staffing policy and identify the situations where these methods are appropriate.

Introduction:

Ethnocentric staffing policy is a method where the parent nation fills the management positions.

Polycentric staffing policy is a method where it requires the host nations to manage subsidiaries and the parent nations will hold the main position.

Geocentric staffing policy pursues the people with best skills and knowledge, in spite of their nationality.

Explanation of Solution

The merits and demerits of ethnocentric staffing policy is as follows:

• Merits:
• Disables lack of qualified executives in the host country.
• Incorporated culture.
• Helps in transferring core skills.
• Demerits:
• This type of staffing may lead to cultural bias.
• It creates offense in the host country.

Appropriation of ethnocentric staffing policy is as follows:

This method is appropriate for utilizing an international strategy.

The merits and demerits of polycentric staffing policy is as follows:

• Merits:
• This type of staffing brings improvement in cultural bias.
• The cost of implementing this approach is inexpensive.
• Demerits:
• It limits career flexibility.
• Separates the headquarters from external subsidiaries.

Appropriation of polycentric staffing policy is as follows:

This method is appropriate for utilizing a multi-domestic strategy.

The merits and demerits of geocentric staffing policy is as follows:

• Merits:
• Efficient utilization of human resources.
• Helps in building informal management and strong culture.
• Demerits:
• National migration policies might limit operations.
• The cost of implementing this approach is expensive.

Appropriation of geocentric staffing policy is as follows:

This method is appropriate for utilizing a transnational or global strategy.