2.Staffing Policies

Ethnocentric Approach

• Key positions in foreign subsidiaries are filled with parent-country nationals (PCNs).
• Example: A US-based company opening a new subsidiary in Germany sends US managers to oversee the operations.
• Advantages: Maintains control, facilitates transfer of corporate culture.
• Disadvantages: Limits opportunities for host-country nationals (HCNs), can lead to cultural insensitivity.

Polycentric Approach

• Foreign subsidiaries are managed by HCNs.
• Example: A multinational company hires local managers in each of its subsidiaries to run the local operations.
• Advantages: Reduces cultural barriers, lower costs.
• Disadvantages: Limits career opportunities for PCNs, potential for loss of control.

Geocentric Approach

• The best person is selected for the job, regardless of nationality.
• Example: A global company hires the most qualified candidate for a regional manager position, regardless of their nationality or where they are currently located.
• Advantages: Develops a global perspective, utilizes the best talent.
• Disadvantages: Complex and expensive to implement, requires extensive cross-cultural training.

Regiocentric Approach

• Key positions are filled by individuals from the region where the subsidiary is located.
• Example: A company with operations in Southeast Asia fills management positions with individuals from countries within that region.
• Advantages: Facilitates regional integration.
• Disadvantages: Can limit global integration.