Staffing

Staffing policy is concerned with the selection of employees for particular job. At
one level, this involves selecting individuals who have the skills required to do
particular jobs. At another level, staffing policy can be a tool for developing and
promoting the desired corporate culture of the firm. A strong corporate culture
can help a firm implement its strategy.

There are 3 types of staffing policies in international businesses: the

ethnocentric approach, the polycentric approach and the geocentric approach.
Lets have a look at each one of them

Starting with Ethnocentric approach

Definition: 
The Ethnocentric Approach is one of the methods of international recruitment
wherein, the HR recruits the right person for the right job for the international
businesses, on the basis of the skills required and the willingness of the
candidate to mix with the organization’s culture.
In Ethnocentric Approach, the key positions in the organization are filled with
the employees of the parent country. All the managerial decisions viz. Mission,
vision, objectives are formulated by the MNC’s at their headquarters, and the
same is to be followed by the host company.

It is based on the rationale that, the staff of the parent country is best over the
others, and also, they can better represent the interest of the headquarters.

Advantages of Ethnocentric Approach

1. Better coordination between the host and the parent company.
2. The culture of the parent company can be easily transferred to the
subsidiary company, thereby infusing beliefs and practices into the
foreign country.
3. Effective control over the subsidiary.
4. The parent company can have a close watch on the operations of the
subsidiary.

Disadvantages of Ethnocentric Approach

1. The staff of the parent country may find it difficult to adjust in the host
country due to the cultural differences.
2. Difficulty in guiding employees living far away from the parent country.
3. Missed out the opportunity to hire the best personnel from the host
country.
4. The cultural clashes between the executives of parent country and the
staff members of the host country.

This approach is beneficial in a situation when a new subsidiary is set up in the

host country, and the employees of the parent company visit there and initializes
its operations.
Next is polycentric approach
The Polycentric Approach is the international recruitment method wherein the
HR recruits the personnel for the international businesses.
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.
The rationale behind this approach is that the locals of the host country know
their culture better and can run the business more efficiently as compared to
their foreign counterparts.

Advantages of Polycentric Approach

1. The difficulty in the adjustment of expatriates from the parent country
gets eliminated.
2. The hiring of locals or the 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 the 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.

The next is geocentric approach

The Geocentric Approach is a method of international recruitment where the

MNC’s hire the most suitable person for the job irrespective of their Nationality.
Generally, the recruitment agencies or the consultants are hired to find the most
suitable employee equipped with all the necessary skills, residing in any part of
the world, to be employed in the global business.
In addition to this, MNC’s can make use of their internal source of recruitment, by
maintaining a track record of its employees, and scrutinize these to find the most
suitable candidate for the global posting.
The rationale behind the Geocentric Approach is that the world is a pool of
talented staff and the most eligible candidate, who is efficient in his field, should
be appointed for the job irrespective of his nationality. This approach is followed
by the firms that are truly global because they follow the integrated global
business strategy.

Advantages of Geocentric Approach

1. MNC’s 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 could 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.