1.

Ethnocentric approach: It is an approach in which all strategic decisions are

made at headquarters and the foreign subsidiaries have very little autonomy.
This approach to staffing involves hiring employees from the home country and
then sending them to host countries as expatriates. This approach to
international staffing involves filling up of major international openings by
PCNs. PCNs or expatriates occupy key positions at headquarters as well as in
subsidiaries. PCNs are generally considered to be more loyal to the organization
as compared to HCNs or TCNs and hence can be a preferred source of staffing.
This approach is generally followed in the initial stages of a business opting to
operate in international locations.
The reason for MNCs to choose this ethnocentric approach as follows:
 MNCs usually follow this approach try to maintain a uniform culture
between the headquarters and the international offices. They accomplish
this by giving all senior positions to the PCNs whereas lower operative
positions
 Ethnocentrism is also chosen as an approach by MNCs when there are not
enough skilled and capable HCNs to be hired. In ethnocentric
organizations, the HRM policies and practices are standardized across
headquarters and all subsidiaries.
Some of the limitations of Ethnocentric approach as follows:
 The PCNs may not be able to adapt to the culture and environment of the
host country.
 The HCNs may not be too receptive and cooperative with the expatriates
sent from the headquarters.
 The rate of failure for expatriate assignments is often very high either due
to personal reasons or because of family issues.
 The expatriate may not be able to adjust to the new location.
 The expatriate failed to perform the job he was assigned.
 Recruiting PCNs and sending them to subsidiaries can be extremely
costly to the organization.
 The pay disparity between the PCNs and HCNs may not be viewed very
positively by the latter.
2. Pre-departure training:
There are numerous cultural differences between countries. No two countries
have similar or uniform cultural and societal norms and practices. Therefore, an
individual should gain knowledge and understanding of the country’s culture
where he/she is going to work.
It is the responsibility of an organization to provide cross-culture training to
employees posted abroad. This training should focus on skills needed to attain
success in the international assignment, understanding of cultural differences
and socio-political environment of the country. So, cross-culture training is
most important in organizations.
The organization should provide a pre-departure training to both employees and
their family. This training also known as expatriation makes it easier for the
employee to adjust to a different culture and assume job responsibilities
effectively. This training covers three main aspects such as language training,
managing personal and professional life and cultural training.
Pre-departure training is designed to build upon the competencies of expatriates
for better adaptation and performance in the host country.
Components involved in Pre-departure training are as follows:
1. Identifying the need for training initiatives: This stage involves
identifying the main objective for which training is being imparted to an
employee. The objectives of a training programme can be identified by
performing a training need analysis. This analysis helps in finding the
areas where training can benefit both employees and an organization in
meeting their objectives.
2. Identifying the type of expatriate assignments: Expatriates are selected
for different assignments in an organization. At this stage, specific
assignments for which training should be given are decided. All
assignments may not require equal attention and rigour. Differentiating
assignments based on attention and coverage is an essential part of this
stage.
3. Determining specific and cultural needs: At this stage, specific cultural
needs for different assignments across different host countries are
determined. Different countries require expatriates to be trained in
different fields which need to be ascertained well.
4. Designing the training programme: A training programme should be
designed in such a way that it is able to effectively achieve the goals and
objectives of the training programme.
5. Evaluating the effectiveness of a training programme: At this stage,
the effectiveness of a training programme must be assessed once training
is imparted. The success of pre-departure training is evaluated by taking
 feedback from expatriates. It can also be gauged by observing
expatriates’ actual performance on the job on the international
assignment. Training evaluation helps in fine-tuning the pre-departure
training programmes to suit the requirements of expatriates.
The effectiveness of pre-departure training can be measured as follows:
 Firstly, effectiveness is assessed once after the training is completed.
 Feedback from expatriates is important for evaluating the success of this
training.
 And also, effectiveness depends on the performance of the expatriates,
that how well they are adapted to new workplace through this training.
3a.
The major challenges faced in assessing the performance of a subsidiary are as
follows:
 Balancing the performance of headquarters and host unit: It is important
to balance the entire organization and the profitability or loss of a
subsidiary. If a subsidiary fails to perform as planned, its operation need
not be shutdown. Hence, certain factors that need to be considered in
assessing a subsidiary’s performance are market presence, competitors’
strategies and inability to effectively quantify the ROI of a host unit soon
after its setup.
 Significance of time and distance: A high degree of physical distance
adds to the challenges of assessing the performance of subsidiaries and
employees across the globe. Time zone differences also adds to the
problem.
 Variable level of hostility: Growth in a foreign country generally takes
one more time than in the home country. More time is needed to show
any results. There is a need of sensitivity towards variations in cutoms
and work practices in the practices in the present and the host country.
These variations need to be recognized and appreciated.
 Attention to external factors: Adequate considerations should be given to
circumstantial factors that change suddenly, such as new tax law, higher
salaries, service terms and conditions, government regulations and
foreign trade tariffs. These are some examples that make objective
appraisal problematic and complicated.
3b.
It is important for the organizations to be clear about the criteria based on which
the performance of the expatriates is assessed. The criteria should be clearly
defined and relevant for the employees and organizations.
The criteria for performance appraisal of international employees are as follows:
 Criteria for measuring performance: The objectives and goals assigned to
the employees need to be specific and achievable in a realistic time
frame. The employees are rated on three parameters. The primary criteria
are the personality traits of the expatriates. The desirable traits for various
positions are identified. Depending on the traits acquired, the employees
are rated. The other criterion for performance appraisal is the behavior of
the employee. This is done based on the behaviors exhibited by the
employees while performing their job and those which are required for
job performance. The next criterion is the result achieved by the
employee. The contribution the employee makes to the organization’s
profit and its growth is also an important criterion for appraising
performance.
 Identifying the appraisers: Appraisers are the seniors of the expatriates.
The manager at the international subsidiary can also be the appraiser of
the expatriate. The reasons for the manager being the most appropriate
person for the appraisals are:
o No one is more familiar to the team’s performance than the
managers.
o Someone else assessing the members performance may undermine
the managers authority.
o The manager also has the duty to ensure that his team members are
well-trained.
 Frequency of appraisal: The next criterion for performance appraisal is to
determine how often appraisals should be conducted at the international
subsidiary. Most multinationals conduct annual appraisals. However, they
can choose to conduct appraisal quarterly or biannually as well. The
frequency of appraisal may vary for different positions. Frequent
evaluation gives constant feedback to managers, hence, enabling them to
improve performance if there is any deficiency.