What Are the Opposing Reasons for the Polycentric Approach of Staffing?
International companies manage employees across various countries. In doing so, they must deal with cultural differences, language barriers and differing skill levels across the different countries within which they operate. Managers play a key role in addressing these issues. Staffing policies within global businesses will determine whether managers must hold a particular nationality.
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Approaches to Staffing in Global Organizations
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There are three staffing approaches available to international companies. Companies that apply an ethnocentric approach fill all key management positions with nationals from their parent-country, no matter where the job is located. Under a polycentric approach, managers based at the head office are nationals of the parent-country, while each subsidiary is managed by a national of the country in which it is based. By applying a geocentric staffing policy, companies appoint the best person for the job, regardless of nationality or the job's location.
Benefits of the Polycentric Approach
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If managers of subsidiaries are host-country nationals, they will understand the culture and political situation. They will not face a language barrier when they communicate with their employees. Local appointments are more cost-effective for a global organization than paying the expenses associated with expatriate contracts, which may be required if parent-country nationals are required to live abroad in order to manage subsidiaries. Plus, the availability of management positions within the subsidiary provides career advancement opportunities for lower-level employees.
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Disadvantages of the Polycentric Approach
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Managers of subsidiaries may become frustrated by the lack of career advancement opportunities offered by a polycentric approach to staffing, as they will be unable to progress in to head office positions. Lack of staff transfers between subsidiaries and head office can lead to isolation. Also, a gap can develop between head office and subsidiaries due to cultural differences, language barriers and national loyalties. The result can be a loose federation of business units rather than a company with consistent competencies and values.
Practical Application
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In practice, companies may adopt a mix of the three staffing approaches. This may be out of choice or necessity. A company that would prefer to apply a polycentric approach may struggle to find a suitably qualified manager in a host nation. It may need to appoint an expatriate manager from the parent-country or from another country. Alternatively, a company that prefers an ethnocentric approach may not be able to find parent-country nationals willing to take up a particular assignment.
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