ETHNOCENTRIC AND POLYCENTRIC APPROACH FOR INTERNATIONAL BUSINESS

RUCHIR KELKAR

ROLL NO C-27

INTERNATIONAL BUSINESS

. from which I am going to explain only two approaches in detail that are Ethnocentric and Polycentric and these two are based on HRM perspective in this assignment. marketing. Geocentric approach: This manager sees the one world as a big market so he does not separates the domestic market from international market.In International Business. Remaining two are explain in detail as follows. Asia-Pacific. and European Union. Four Approches Ethnocentric Polycentric Regiocentric Geocentric Regiocentric approach: It means the managing the business according to the locations. Africa. Generally the companies follows the four important approaches. that four important approaches are given as follows. It includes some natural boundaries and continents like Asia. HRM is one of the main important element to market the company as well as marketing of the products.

it is called an ethnocentric approach. technical skills assessment. The recruitment process involves following stages: Self-selection. on higher-level foreign positions are filled with expatriate employees from the parent country. and making a mutual decision. the employee database is prepared according to the manpower requirement of the company for international operations. In the next stage. Finally.Ethnocentric approach: When a company follows the strategy of choosing only from the citizens of the parent country to work in host nations. the best candidate is identified for foreign assignment and sent abroad with his consent. creating a candidate pool. Then the database is analysed for choosing the best and most suitable persons for global assignments and this process is called technical skills assessment. . Normally. Self-selection involves the decision by the employee about his future course of action in the international arena. The general idea behind the ethnocentric approach is that the staff from the parent country would represent the interests of the headquarters effectively and link well with the parent country.

Equal corporate culture among all the subsidiaries. Disadvantages of ethnocentric approach: 1. Different promotional strategies as per the home and subsidiaries market. Control and Loyalty towards home country.Features of ethnocentric approach: 1. Key decisions are centralised. Managers are not able to adopt conditions easily as per the market changes. Poorly trained managers for the assignments. 3. . 2. 2. 3.

Example of ethnocentric approach: In this example the main parent company is in US and the following subsidiaries is in Mexico so we can see that the US company sending their top level management in Mexico to apply same work culture in their subsidiary. . Because they feel that home country management is much more superior to their subsidiary.

cultural and legal requirements better. The companies adopt this approach to reduce the cost of foreign operations gradually. Many international companies operating their branches in advanced countries like Britain and Japan predominantly adopt this approach for recruiting executives lo manage the branches. The companies that adopt this method normally have a localized HR department. The main purpose of hiring local people from subsidiary country is to ensure that the company understands the local market conditions." . which manages the human resources of the company in that country. Even those organizations which initially adopt the ethnocentric approach may eventually switch over to the polycentric approach.Polycentric Approach: When a company adopts the strategy of limiting recruitment to the nationals of the host country (local people). political scenario. it is called a polycentric approach.

Home countries manager tend to loose gaining exposure in overseas market. Degree of autonomy in decision making to subsidiaries head. 2. It eliminates the high costs of expatriates the managers. Disadvantages of polycentric approach: 1.Features of polycentric approach: 1. . Better approach to adopt the local needs. 2. Loose control over subsidiaries. 3.

So the management in hands of the Indian people.Example of polycentric approach: In this example the main parent company is in Australia and its subsidiary is in India so we can see that main parent company appointing the management from the India because they believe that Indian individuals vary much know about the Indian culture. political background also the market conditions. .

com www.wikipedia.whatishumanresource.Bibliography: www.com .