APPROACHES TO STAFFING

implement its strategy.STAFFING POLICY ▪ A firm’s staffing policy is concerned with the selection of employees who have the skills required to perform a particular job. ▪ A staffing policy can be a tool for developing and promoting the firm’s corporate culture organization’s norms and value systems). (the ▪ A strong corporate culture can help the firm .

APPROACHES TO STAFFING ▪ There are four approaches to international staffing are: Ethnocentric Approach Polycentric Approach Geocentric Approach Regiocentric Approach .

coordination and control links with corporate HQs. has a number of disadvantages:  A perceived lack of qualified host country nationals. a key overseas position means new status. however. ▪ There are often sound business reasons for pursuing an ethnocentric staffing policy: ▪ An ethnocentric policy. often – considerable income gap in favour of PCNs is viewed by HCNs as unjustified. ▪ Subsidiaries are managed by the staff from the home country (PCNs). which may lead to reduced productivity and increased turnover among that group.  For many expatriates. ▪ Key positions in domestic and foreign operations are held by HQ’s personnel.  The need to maintain good communication.  When PCN and HCN compensation packages are compared.  Expatriates are also very expensive to maintain in overseas location.  The adaption of expatriate managers to host countries often takes a long time.  It limits the promotion opportunities of HCNs. These changes may affect expatriates’ sensitivity to the needs and expectations of their host-country subordinates. .ETHNOCENTRIC APPROACH ▪ Few foreign subsidiaries have an autonomy and strategic decisions are made at HQs. ▪ Most appropriate during the early stages of set-up of a foreign subsidiary when the need for control is the greatest. authority and an increase in standard of living. during which PCNs often make mistakes and poor decisions.

POLYCENTRIC APPROACH ▪ Primarily host-country oriented. This approach avoids the turnover of key managers. . however has its own disadvantages:  Bridging the gap between HCN subsidiary managers and PCN managers at corporate HQs. ▪ Subsidiaries are usually managed by local nationals (HCNs). As HQs positions are held only by the PCNs. avoids the adjustment problems of expatriate managers and their families and removes the need for expensive cultural awareness training programs. and PCNs are rarely transferred to foreign subsidiary operations. ▪ The main advantages of a polycentric approach are:  Employing HCNs eliminates language barriers. this will constrain strategic decision-making and resource allocation. conflicting national loyalties and a range of cultural differences may isolate the corporate HQs staff from the various foreign subsidiaries.  Employment of HCNs allows a MNC to take a lower profile in sensitive political situations.  Employment of HCNs is less expensive. who are seldom promoted to positions at HQs. even if a premium is paid to attract high-quality applicants.  Career paths of HCN and PCN managers. the senior corporate management group will have limited exposure to international operations and over time. ▪ A polycentric policy. Language barriers.  Gives continuity to management of foreign subsidiaries.

of their citizens employed and may utilize immigration controls in order to force HCN employment if enough people and adequate skills are unavailable.  It supports the cooperation and resource sharing across units.  Expensive to implement because of increased training and relocation costs. ▪ Geocentric organisations represent the most complex form of organisational structure.  Large no. ▪ Disadvantages associated with geocentric approach are:  Host governments want a higher no. thus. expensive and futile.  Many countries require companies to provide extensive documentation if they wish to hire a foreign national instead of a local national which can be time consuming. ‘The skill of the person is more important than the passport’.  It overcomes the ‘federation’ drawback of the polycentric approach. which may be higher than national levels in many countries. . ▪ Nationality and superiority are not related concepts. of PCNs. The need to have a compensation structure with standardized international base pay. requiring high levels of communication and integration across borders. ▪ There are three main advantages to this approach:  It enables a multinational firm to develop an international executive team which assists in developing a global perspective and an internal pool of labour for deployment throughout the global organization.GEOCENTRIC APPROACH ▪ Geocentricism involves filling positions at both HQ and subsidiary level with the ‘best person for the job’ regardless of nationality. TCNs and HCNs need to be sent abroad in order to build and maintain the international team required to support the geocentric staffing policy which requires a longer lead time and more centralized control of the staffing process which reduces the independence of the subsidiary management which may be resisted by it. The aim of the structure is to de-emphasise national culture and to emphasise an integrating corporate culture.

GEOCENTRIC STAFFING REQUIREMENTS Top management commitment Search for global operators Barriers Globalization Momentum Staff transfers International Team Geocentric staffing policy Momentum maintained • Staff availability • Time and cost constraints • Host government requirements • HRM policies .

since local subsidiaries are staffed almost totally by HCNs. It utilizes a wider pool of managers but in a limited way.  While this approach does improve career prospects at the national level. ▪ Regional managers may not ne promoted to the HQs position but enjoy a degree of regional autonomy in decision making. .  It can be a way for a multinational to move gradually from a purely ethnocentric or polycentric approach to a geocentric approach.  It reflects some sensitivity to local conditions. ▪ There are some disadvantages in a regiocentric policy:  It can produce federalism at a regional rather than a country basis and constrain the organization from taking a global stance. ▪ Staff may move outside their countries but only within the particular geographic region.REGIOCENTRIC APPROACH ▪ Reflects the geographic strategy and structure of the multinational. it only moves the barrier to the regional level/ Staff may advance to regional HQs but seldom to positions at the parent HQs. ▪ The advantages of using a regiocentric approach are:  It allows interaction between executives transferred to regional HQs from subsidiaries in the region and PCNs posted in the regional HQs.

The advantages and disadvantages of using PCNs .

The advantages and disadvantages of using TCNs .

The advantages and disadvantages of using HCNs .

DETERMINANTS OF STAFFING CHOICES .

STAFFING A NEW INTERNATIONAL VENTURE (CASE STUDY YARRA RIVR WINES) ▪ Listen to the case study very carefully!!! ▪ Situation: The HR Director will present an assessment of the current situation in your new acquisition and describe the institutional environment in France. to retain the current French management team or use a mixture of French and Australians.  Wine Technologist (a new position). on whether to use Australians (either from inside or outside the company).  Finance Manager and  HR Manager. ▪ The key positions to be considered are:  Managing Director.  Marketing Director.  Production Manager. ▪ You are top management team members of Yarra Wines that has to decide about the staffing of the French acquisition. .

It would be advantageous to have someone with the greater knowledge about the company and the expectations of the company from the new venture. Therefore an experienced candidate from the Australian company would be a great choice. ▪ The priority choice for a Marketing Manager should be a French person since the position requires a great deal of knowledge about the local ▪ Wine Technologist can preferably be a local French candidate since the “Trend of Taste” varies from different part of the world. Moreover the Finance Manager should be extremely good in handling the business based on local laws. Therefore a French candidate would be a positive option for the post. law and current local market trend. Therefore an experienced French local person can be suitable for the position since an equivalent Australian choice needs more training regarding the same which in turn saves time and money for the company. ▪ Production Manager is no simple position either. a candidate from the mother company from Australia can be chosen but it is better to . political policies & economy of the local market. for the position of a Human Resource manager. ▪ Finally. These qualities can be expected from a French candidate since the new market covers French with few EU countries surrounding France. marketing policies. Whereas an equivalent French candidate might have difficulty in understanding and executing the same conditions without much questions.SOLUTION (ACCORDING TO ME) ▪ The Managing Director can be an Australian and possibly from the company itself. An Australian can be a wise choice for this position since he/she can drive the production capacity based on the business standard put forth by the mother company in Australia. public relations & other HR activities in great depth. ▪ Finance Manager plays a vital role in creating a budget for a given fiscal year and also make sure the business is driven based on the target requested by the Yarra Valley Company in Australia. political policies & laws. There are loads of responsibilities to be managed and accomplished by the suitable candidate. Even if a top notch Australian expert is chosen for the position there is no guarantee that he/she can satisfy the taste needs of the local consumers of the new French acquisition. Also he/she should be able to implement the knowledge on hiring new recruits. choose a candidate who is up-to-date in the local HR policies.

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