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IHRM: Sustaining International Business Operations: DR - Vimala, SCT 1
IHRM: Sustaining International Business Operations: DR - Vimala, SCT 1
Dr.Vimala,SCT 1
Approaches to Staffing
Factors affecting approaches to staffing
General staffing policy on key positions at
headquarters and subsidiaries
Constraints placed by host government
Staff availability
Ethnocentric
Polycentric
Geocentric
Regiocentric
Dr.Vimala,SCT 2
Ethnocentric
Strategic decisions are made at
headquarters;
Limited subsidiary autonomy;
Key positions in domestic and foreign
operations are held by headquarters’
personnel;
PCNs manage subsidiaries.
Dr.Vimala,SCT 3
Polycentric
Each subsidiary is a distinct national
entity with some decision-making
autonomy;
HCNs manage subsidiaries who are
seldom promoted to HQ positions;
PCNs rarely transferred to subsidiary
positions.
Dr.Vimala,SCT 4
Geocentric
A global approach - worldwide integration;
View that each part of the organization
makes a unique contribution;
Nationality is ignored in favor of ability:
Best person for the job;
Color of passport does not matter when it
comes to rewards, promotion and
development.
Dr.Vimala,SCT 5
Regiocentric
Reflects a regional strategy and structure;
Regional autonomy in decision making;
Staff move within the designated region,
rather than globally;
Staff transfers between regions are rare.
Dr.Vimala,SCT 6
Ethnocentric Approach
Advantages: Disadvantages:
To ensure new subsidiary Limits the promotion opportunities
complies with overall of HCNs, leading to reduced
corporate objectives and productivity and increased
policies turnover among the HCNs
Has the required level of Longer time for PCNs to adapt to
competence host countries, leading to errors
Assignments as control and poor decisions being made
High cost
Considerable income gap, high
authority, and increased standard
of living may relate to lack of
sensitivity
Dr.Vimala,SCT 7
Polycentric Approach
Advantages:
Employment of HCNs eliminates language
barriers, avoids adaptation of PCNs, reduces
the need for cultural awareness training
programs
Employment of HCNs allows a multinational
company to take a lower profile in sensitive
political situations
Employment of HCNs is less expensive
Employment of HCNs gives continuity to the
management of foreign subsidiaries (lower
turnover of key managers)
Dr.Vimala,SCT 8
Polycentric Approach
Disadvantages:
Difficult to bridge the gap between HCN
subsidiary managers and PCN managers at
headquarters ( language barriers, conflicting
national loyalties, cultural differences)
HCN managers have limited opportunities to
gain experience outside their own country
PCN managers have limited opportunities to
gain international experience
Resource allocation and strategic decision
making will be constrained when headquarter
is filled only by PCNs who have limited
exposure to international assignment
Dr.Vimala,SCT 9
Geocentric Approach
Advantages: Disadvantage:
Ability of the firm to Host government may use
develop an immigration controls in
international executive order to increase HCNs
team employment
Overcomes the Expensive to implement
federation drawback of due to increased training
the polycentric and relocation costs
approach Large numbers of PCNs,
Support cooperation HCNs, and TCNs need to
and resource sharing be sent across borders
across units Reduced independence of
subsidiary management
Dr.Vimala,SCT 10
Regiocentric Approach
Advantages: Disadvantages:
Allow interaction between Produce federalism at a
executives transferred to regional rather than a
regional headquarters from country basis and
subsidiaries in the region constrain the firm from
and PCNs posted to the taking a global stance
regional headquarters Staff’s career
Provide some sensitivity to advancement still limited
local conditions to regional
Help the firm to move from headquarters, not the
a purely ethnocentric or parent country
polycentric approach to a headquarters
geocentric approach
Dr.Vimala,SCT 11
Parent-Country Nationals
Advantages Disadvantages
Organizational control and Promotional opportunities
coordination is maintained. of HCNs are limited.
Rising stars are given Time and performance
international experience. costs associated with
PCNs may be the best adaptation to the host
people for the specific job country.
due to special skills and PCNs may impose an
experience. inappropriate HQ style.
An assurance that the Compensation for PCNs
subsidiary will comply with and HCNs may differ.
company objectives &
policies.
Dr.Vimala,SCT 12
Host-Country Nationals
Advantages Disadvantages
Language and other barrier Hiring of HCNs may
eliminated encourage a federation of
Reduced hiring costs national rather than global
units
Continuity of management
HCNs have limited career
Government policy may
opportunity outside the
require hiring HCNs
subsidiary
Possible increased morale
Control and coordination of
because of increased
HQ may be impeded
career potential
Hiring HCNs limits
opportunities for PCNs to
gain foreign experience
Dr.Vimala,SCT 13
Third-Country Nationals
Advantages Disadvantages
Salary and benefit Transfers must consider
requirements may be national animosities.
lower than for PCNs. Host government may
TCNs may be better resent hiring TCNs.
informed than PCNs TCNs may not want to
about host-country return to their own
environment. countries after
assignment.
Dr.Vimala,SCT 14
Reasons for International
Assignments
Position filling, e.g.
Skills gap, launch of new endeavor,
technology transfer
Management development
Training and development purposes, assisting
in developing common corporate values
Organizational development
Need for control, transfer of knowledge,
competence, procedures and practices
Dr.Vimala,SCT 15
Types of International Assignments
Short term: up to 3 months
Troubleshooting
Project supervision
A stopgap until a permanent arrangement is found
Extended: up to 1 year
May involve similar activities as short-term
assignments
Long term
Varies from 1 to 5 years
The traditional expatriate assignment
Dr.Vimala,SCT 16
Non-standard Assignments
Commuter assignments
Rotational assignments
Contractual assignments
Virtual assignments
Dr.Vimala,SCT 18
The Role of Non-expatriates
People who travel internationally yet are
not considered expatriates as they do not
relocate to another country
Road warriors, globetrotters, frequent fliers
Much of international business involves
visits to foreign locations, e.g.
Sales staff attending trade fairs
Periodic visits to foreign operations
Dr.Vimala,SCT 19
But a High Level of Stress!
Home and family issues
Frequent absences
Work arrangements
Domestic side of position still has to be
attended to
Travel logistics
waiting in airports, etc.
Health concerns
Poor diet, lack of sleep, etc.
Host culture issues
Limited cultural training
Dr.Vimala,SCT 20
Various Roles of Corporate HR
Centralized HR Decentralized HR Transition HR
Companies Companies Companies
Large well-resourced Small HR departments Medium-sized HR
HR departments departments
Key role: Managing all Key role: Managing Key role: Management and
high-grade management elite corporate managers development of senior
positions worldwide managers and expatriates
Key activities: Planning Key activities: Key activities: Persuading
international assignments Influencing operating divisional managers to
and performance units to support release key staff using
management globally, international informal and subtle methods,
identifying high-potential assignments, supporting strategic staffing.
staff decentralized HR
Source: Based on H. Scullion and K. Starkey, in Search of the Changing Role of the Corporate Human Resource Function in the International
Firms, International Journal of Human Resource Management, V 11, N 6 (2000) pp. 1061-1081.
Dr.Vimala,SCT 21