Approaches in Global Setting

(Define each approach in a global setting and indicate the advantages and disadvantages of
each approach.)

1. Ethnocentric Approach. The ethnocentric approach means that a company hires people
from their parent country to fill positions all over the world. For example, if a company
wants to fill an executive role in a country, the company could:

a. Relocate one of their existing employees who’s a permanent resident of their

parent country.
b. HIre a person from their parent country who lives or wants to live in the host
country.

Companies use ethnocentric approaches when opening a new branch in a new

country, so it’d be easier for the company’s policies and procedures to be transferred from
the parent country to the new branch. All subsidiaries need to completely abide by each
of the rules and regulations directed by their head branch in the parent country. It is
believed on rationale that recruiting individuals from a parent country would be best over
other ones. Employees of the parent country would perform better and will effectively
represent the interest of the head branch.

Advantages of Ethnocentric Approach:

1. Ethnocentric approach helps in attaining better coordination between
parent country and host country.
2. It enables effective control by the company's head branch over all its
subsidiaries operating in distinct countries worldwide.
3. Facilitates efficient transfer of technical know-how among various
branches.
4. The parent company can easily close watch over the activities of all
subsidiaries.
5. Avoids the need of having a well-developed local labor market at
international level.
6. It promotes effective communication between the parent and host
company.
7. Enables easy transfer of parent country culture to the subsidiaries
company. It assists in infusing beliefs and practices into foreign countries.
 Disadvantages of Ethnocentric Approach:
1. It becomes difficult to train or guide employees at far distant places away
from the parent country.
2. Staff from the parent country may face difficulty in adjusting themselves
in the host country because of differences in culture.
3. There may be cultural clashes among executives from the parent country
and employees of the host country.
4. Governments in host countries may impose strict restrictions on
subsidiaries that will adversely impact the business of the parent company.
5. Opportunity of hiring the best talented human resource from the host
country is missed.
6. Expatriates of a parent country are more expensive in comparison to
employees in the host country.
7. Rate of failure is very high.

2. Geocentric Approach. Geocentric approach is hiring the best people to fill the positions
of a company without regard to where they come from or where they live. This means:
a. Hiring remote employees. Companies use this option when they want to hire
someone at a place where they don’t have offices. For example, if a company
wants a customer support agent in another time zone to support their customers
there.
b. Relocating employees. This includes both bringing foreign talent into the parent
country and relocating people to a new host country. Companies use this approach
when they need someone to be physically present at a specific location, but the
best person for the job is living elsewhere.

To use the geocentric approach, companies need to have a global outlook on

recruitment. For example, whenever a position opens at a host country or the parent
country, the hiring team could:
● Advertise on global job boards first, before using local job boards
mentioning the location of the job clearly. Also, advertise on job boards
focused on remote work when possible,
● Source candidates online without looking at their current location.
● Check the global employees database to find internal candidates who may
wish to relocate.
● Ask recruiters to suggest candidates they met at international career fairs
or events.
● Ask for referrals from the existing employees, as they may have someone
in their network who could fit in the position and be willing to relocate.
 Advantages of Geocentric Approach:
1. Multinational corporations or companies (MNC) can develop a pool of senior
executives with international experiences and contacts across the borders.
2. The expertise of each manager can be used for the accomplishment of MNC’s
objective as a whole.
3. Reduction in resentment, i.e. the sense of unfair treatment reduces.
4. Shared learning, the employees will learn from each other’s experiences.

Disadvantages of Geocentric Approach:

1. The cost of training, compensation, and relocation of an employee is too high.
2. Highly centralized control of staffing is required.
3. Proper scrutiny is required by the HR to select the most suitable person for the
job, which would be time-consuming.
4. This approach is very costly since the recruitment agencies or the consultants are
to be hired for the global search for eligible candidates.

3. Polycentric Approach. The polycentric approach means that a company hires locals to fill the
positions in a host country. For example, the company could advertise on local job boards or
create a contract with a local recruitment agency. Companies use a polycentric approach when
they need the skills of locals to conduct the business. For example, if the company wants to
expand their clientele to a specific country, they’d hire a local professional who knows the
market and can coordinate the sales operations.
In this approach, the natives of the host country are chosen to run the operations of the
subsidiary and are given the authority to formulate strategies for the business keeping the
mission and vision of the subsidiary company in mind. Whereas, the parent country nationals
hold key positions at the corporate headquarters and scrutinize the operations of the subsidiary
from the home office.

Advantages of Polycentric Approach:

1. The difficulty in the adjustment of expatriates from the parent country gets
eliminated.
2. The hiring of locals or nationals of the host country is comparatively less
expensive.
3. The morale of the local staff increases.
4. Better productivity due to better knowledge about the host market.
5. The career opportunities for the nationals of the host country increases.
6. Better government support.
 7. Chances of success are high.

Disadvantages of Polycentric Approach:

1. Lack of coordination between the host and the parent company, due to the absence
of a link that gets created when expatriates from the parent country hold the
managerial positions at the subsidiary.
2. The lack of effective communication between the staff members of both the host
and the parent company, due to language barrier.
3. Difficult to exercise control over the subsidiary.
4. Lack of knowledge about the market conditions of the host country.
5. The conflict may arise between the managers of both the host and the parent
company due to the different thinking processes.

(If you are the head of the company, which approach would you use and why?)

I would like to give opportunities, not only to the citizens of my company’s parent
country, but also to the locals of the company’s host country. Increasing the manpower of my
company through using the polycentric approach is the best possible way in my opinion. Our
employees get to meet new people and learn/study different behaviors, work ethics, and attitude
with the influence of their culture. Although it is mentioned above, that there are not one, but
five, and maybe a lot more disadvantages that wasn’t mentioned upon applying this approach,
but I firmly believe that our company can eradicate these disadvantages if each and every one of
us is willing to learn and has the passion for our company’s improvement and success. We can
slowly but surely overcome every single obstacle that may come our way by instilling in our
minds the mission and vision of our company.
Online Sources:

https://resources.workable.com/international-recruitment-policy

https://commercemates.com/ethnocentric-approach-advantages-and-disadvantages/

https://businessjargons.com/geocentric-approach.html

https://businessjargons.com/polycentric-approach.html