Advantages Of Polycentric Staffing

i) Ethnocentric

Ethnocentric is a staffing policy that generally adopted by headquarters by sending employees from the home or parent countries to the host-country. For example, Jane works in China but she is a citizen of the Malaysia, where her company is organized and headquartered. Jane is an expatriate, which is a citizen of the company’s home-country (Malaysia) working in foreign country (China).

Generally expatriates are often believed to better represent the interests of the home office, and ensure that the foreign offices are aligned with home headquarter. This approach is used best in some situation, such as a team is sent from the home-country to help setting up a new facility as well as provide training to the subsidiary personnel

Usually the host-country nationals will have better understanding on the local market conditions, politics, laws and culture, so that they could manage subsidiaries effectively. For example, host-country managers are unlikely to make the mistakes arising from cultural misunderstands that expatriate managers are vulnerable to. Moreover, the recruitment of local employees also deliver a message to the host-country and its consumers that the company is willing to make a commitment to the country and its people. Another advantage is that polycentric approach is less expensive to implement as there are no relocation expenses and premium compensation for working abroad.

A polycentric staffing also has its drawbacks. Host-country nationals have limited opportunities to gain experience outside their own country, and thus become difficult to progress beyond senior positions in their own subsidiary. Furthermore, in the event of over relying on locals, there may be some disconnect in perspective and interests with the headquarter because locals may put local interests above the headquarters’ boarder interest.

iii)

Often many foreign countries enact immigration laws to promote localized hiring, and these laws make it more difficult for a business to have non-local employees managing and working in the foreign countries. The documentation, such as visas and other immigration related requirements that requested to make it legal for a foreign employee to work in some countries is expensive and time consuming that businesses vacate their geocentric approach. In addition, there are relocation costs involved in transferring employees from country to country, and the organization may need a compensation structure with a standardized international base pay level higher than national levels in many