The document discusses five approaches to staffing international subsidiaries: ethnocentric, polycentric, regiocentric, and geocentric. The ethnocentric approach involves headquarters making all decisions and staffing key roles with parent country nationals. Polycentric treats each subsidiary as a distinct national entity staffed by locals. Regiocentric reflects the organization's geographic structure with talent drawn from regions. Geocentric takes a global approach where each subsidiary contributes unique competencies. The approaches differ in costs, control, adaptation challenges and opportunities for career progression.

2. Ethnocentric Approach
Strategic decisions are made at headquarters
and all key positions in domestic and foreign
countries are held by headquarter employees.
The Ethnocentric approach entails the notion
that home country attitudes, management
style, knowledge, evaluation criteria and
managers are better than anything that the
host country can provide.

3. Advantages & Disadvantages of
Ethnocentric Approach
Advantages Disadvantages
 When lack of qualified and or
skilled employees in the host
country.
 Little need to recruit qualified host
country nationals
 Greater control or loyalty over host
country nationals
 Little need to train parent
company or host country nationals
 Key decisions being centralized.
 Limits to the promotion of
employees, which might lead to
reduced productivity.
 The time taken for expatriate
managers to adapt to the host
country.
 The variation in compensation
packages between different
countries.

4. Polycentric Approach
An approach where by each subsidiary is treated
as a distinct national entity with some authority
in the decision making process.
These subsidiaries are usually managed by
locals, who are seldom promoted to
headquarters.

5. Advantages and disadvantages of
Polycentric Approach
Advantages Disadvantages
 Employing host country nationals
eliminates language barriers.
 Avoids adjustments issues for
expatriates.
 There is no need for expensive
cultural and language training.
 Less expensive to employ a host
country national
 Avoid the turnover of key personnel.
 Parent headquarter is isolated from
the foreign subsidiaries.
 Host country managers have limited
opportunities for promotion because
they do not gain experience in foreign
countries.

6. Regiocentric Approach
An approach that reflects the geographic
strategy and structure of a multinational
organization, with more managers in the pool
from which to draw talent.
It allows the movement of staff within the
geographic operations of a multicultural
operations and offers the opportunity for
development of management succession
programs.

7. Advantages and disadvantages of
Regiocentric Approach
Advantages Disadvantages
 There is an interaction between
regional and subsidiary executives.
 A sense of understanding for local
conditions
 The ability of a multinational to
move from an ethnocentric or
polycentric approach to a
regiocentric approach.
 This can constrain an organization
from globalization.
 Usually employees are promoted
to regional headquarters and not
to parent headquarters.

8. Geocentric Approach
In this approach the multinational
corporation (MNC) is taking a global
approach to its operations.
Each subsidiary makes a contribution
because of its unique competencies.

9. Advantages and disadvantages of
Geocentric Approach
Advantages Disadvantages
 MNC develops a pool of labour that
can be employed globally in the
organization.
 It has no problem with the
isolation of employees.
 Capable managers can adopt to
different cultures.
 Host country usually want their
local nationals employed and could
therefore use immigration controls
to put pressure on the parent or
home company to employ locals.
 Certain immigration
documentation is time consuming.
 It can be expensive to implement
owing to increased training and
relocation costs.

10. Thank You
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