Running head: MULTINATIONAL COMPANIES AND INTERNATIONAL CULTURES 8 Discussion 8: Multinational Companies and International Cultures Student’s Name Course Instructor’s Name Institutional Affiliation Date Submitted Multinational Companies: Host Country Employees versus Parent County Employees Management of International companies encounters many challenges above those faced by domestic organizations. The geographic separation and the absence of close, daily relationships with the headquarters represent major management challenge to the multinationals. It is, therefore, essential to give special attention to the staffing practices of the overseas units. (Ronen, 1988). According to Ronen (Ronen, 1988) a multinational company can be staffed with employees of three different sources. First, it can send expatriates, the employees from its native country. The company can also recruit the host country nationals, and finally, it can choose to recruit third country nationals who are from other countries other than the host or the home country. Although most multinationals end use a mix-up of the employees, the target ratio of the internal to the external recruits elicits hot debate. This paper investigates the advantages or disadvantages of hiring the natives of the horst country against sending the present company employees. The advantages of hiring the locals to hiring foreign expatriates (Polycentric Staffing Policy) The advantages of this approach include: i. The language barriers and other adjustment problems that faces foreign expatriates are eliminated. Thus, recruits from the home country natives may lead to higher productivity. ii. The employment of the home country natives is generally less expensive compared to sending expatriates to the host country. Expenses such as visas are done away with. iii. The host country nationals possibly have better understanding of the local rules and laws. The foreign expatriates may need to familiarize themselves with the laws before they can work in the host country. iv. The tensions that often arise between the locals and foreign "watchdogs" sent from the headquarters are eliminated. v. This strategy also enhances the career and moral opportunities of the local staff. The disadvantages of hiring the locals to hiring foreign expatriates (Polycentric Staffing Policy) The disadvantages of hiring the home country natives include: i. There is often difficulties in realizing an effective communication between the host country native managers at the subsidiary levels and the home country managers at the corporate headquarters. ii. The host-country managers may not as well understand the business objectives without proper training before they are employed. iii. The host-county managers may lack international experience which is a liability in the increasingly competitive business environment. iv. A rift between the native country managers and the managers at the corporate headquarters can ari ...

1. Running head: MULTINATIONAL COMPANIES AND
INTERNATIONAL CULTURES 8
Discussion 8: Multinational Companies and International
Cultures
Student’s Name
Course
Instructor’s Name
Institutional Affiliation
Date Submitted
Multinational Companies: Host Country Employees versus
Parent County Employees
Management of International companies encounters many
challenges above those faced by domestic organizations. The
geographic separation and the absence of close, daily
relationships with the headquarters represent major management
challenge to the multinationals. It is, therefore, essential to give
special attention to the staffing practices of the overseas units.
(Ronen, 1988). According to Ronen (Ronen, 1988) a
multinational company can be staffed with employees of three
different sources. First, it can send expatriates, the employees
from its native country. The company can also recruit the host
country nationals, and finally, it can choose to recruit third
country nationals who are from other countries other than the
host or the home country.
Although most multinationals end use a mix-up of the

2. employees, the target ratio of the internal to the external
recruits elicits hot debate. This paper investigates the
advantages or disadvantages of hiring the natives of the horst
country against sending the present company employees.
The advantages of hiring the locals to hiring foreign expatriates
(Polycentric Staffing Policy)
The advantages of this approach include:
i. The language barriers and other adjustment problems that
faces foreign expatriates are eliminated. Thus, recruits from the
home country natives may lead to higher productivity.
ii. The employment of the home country natives is generally
less expensive compared to sending expatriates to the host
country. Expenses such as visas are done away with.
iii. The host country nationals possibly have better
understanding of the local rules and laws. The foreign
expatriates may need to familiarize themselves with the laws
before they can work in the host country.
iv. The tensions that often arise between the locals and foreign
"watchdogs" sent from the headquarters are eliminated.
v. This strategy also enhances the career and moral
opportunities of the local staff.
The disadvantages of hiring the locals to hiring foreign
expatriates (Polycentric Staffing Policy)
The disadvantages of hiring the home country natives include:
i. There is often difficulties in realizing an effective
communication between the host country native managers at the
subsidiary levels and the home country managers at the
corporate headquarters.
ii. The host-country managers may not as well understand the
business objectives without proper training before they are
employed.
iii. The host-county managers may lack international experience
which is a liability in the increasingly competitive business
environment.
iv. A rift between the native country managers and the managers

3. at the corporate headquarters can arise, leading to a perception
of “us” against “them.”
Advantages of hiring from the parent headquarters
(Ethnocentric Staffing Policy)
i. The expatriate may have the required technical and business
expertise that may lack in the host county.
ii. This strategy gives the firm the ability to transfer its
headquarters' culture to the operations in the foreign countries
thereby infusing the company’s central beliefs and culture
throughout the organization.
iii. The managers from the parent headquarters possibly have a
greater understanding and the implementation of the business
strategy of the company.
iv. There is an effective communication between the managers
at the headquarters and those at the subsidiary levels.
v. This staffing strategy also creates a greater ability of the
expatriates from the parent headquarters to transfer the know-
how from parent to the subsidiary.
vi. There is no need for a well-developed internal labor market
in the foreign country.
Advantages of hiring from the parent headquarters
(Ethnocentric Staffing Policy)
The major problems with the approach include:
i. The parent country nationals experience a lot difficulties to
adjust to the international assignments, and their adaptation is
uncertain. This may reduce their productivity.
ii. It is generally more expensive to send expatriates to the host
country as the cost of visas, and other hiring factors may be
high.
iii. Language barriers and possible lack of cultural sensitivity
may hinder the performance of the foreign staff in the host
country.
iv. The expatriates may not have a clear understanding of the
local markets, as well as the social and the political
environment of the host country.
v. This approach may also limit the promotion and career

4. opportunities of the local managers, leading to low morale and
increased employee turnover.
vi. The parent country nationals may not be sensitive enough to
the needs and the expectations of their subordinates in the host
country.
Necessary Training to Facilitate the Success of Parent Country
Employees
One of the major elements in the dynamics of working abroad is
the challenge posed by the cultural values, beliefs, and norms of
the expatriate and the host country nationals, especially in their
interpersonal relationships. Training managers to work in
foreign cultures is essential to their success in the horst
country. The training should be diverse enough to cover the
essential requirements necessary for a manager to fit a
management position in a host country. The areas of training
should cover:
Training on the geographical area, the climate, accommodation
conditions, education system, chain stores. This will give the
employee a prior knowledge of the conditions to expect in the
new work area, and so plan adaptive measures that will help him
and his family to adapt to the new environment.
Cultural orientation trainings is necessary to equip the manager
with the correct perception and evaluation of the cultural
values, norms and believes of the natives of the host country.
Cultural assimilation training that may imply the simulation of
some situations in which the foreign manager might experience
while operating in the foreign cultural environment.
Training on learning foreign languages is essential for
communication with the natives and subordinates in the host
country.

5. Practical experience training that may involve prior travels to
the host country and having direct contact with the natives and
the environment.
The Hofstede model
The Geert Hofstede model is based on his cultural dimension
theory that looks at the unique aspects of different cultures and
rates through comparison. The Hofstede's Dimensions are
covered below.
The Power Distance
The power distance dimension expresses the extent to which the
less powerful or subordinate members of organizations or
society expect and accept unequal distribution of power. It
implies that the level of inequality in a society is endorsed by
the followers and their leaders, (Wengrzyn, 2012).
Uncertainty Avoidance
This dimension expresses level of discomfort or tolerance to
uncertainty and ambiguity by the members of society. It
indicates the degree to which a culture nurtures its members to
feel either comfortable or uncomfortable in unstructured
situations that are unknown, novel, surprising or strange.
Cultures that are uncertainty-avoiding try to minimize
possibilities of such situations by enacting strict laws,
regulations, security measures, and safety. The people in these
cultures are more emotional and are easily motivated by their
inner nervous energy, (Dastevk, 2013). On the contrary,
uncertainty-accepting cultures, tend to be more tolerant to
opinions that are different from what they experience in their
everyday life. These people are more contemplative and
phlegmatic, and they do not easily express emotions to strange
situations.
Individualism vs. Collectivism
This individualism-collectivism dimension focuses on whether
members of society prefer a societal network individualism
where each person looks after himself/herself. In individualist
setups, there are loose connections between individuals, while

6. in a collective societies, people are integrated into stronger,
cohesive groups.
Masculinity vs. Femininity
Masculinity represents a societal preference for heroism,
assertiveness, achievement, and materialistic reward for
success. On the contrary, femininity represents a preference for
modesty, cooperation, quality of life, and caring for the weak,
(Dastevk, 2013).
References
Popa, L., & Radu, F (2003). Management international. Ed.
Economics : Bucureşti.
Ronen S. (1998), „Training the International Assignee”,
Training and Career
Development, Ed. I. Goldstein.
Rosalie, L. (2002). Selection and Training Procedures of the
US, European &
Japonese Multinationals. The California Management Review,
Fall. Dastevk, D. (2 August, 2013). Geert Hofstede Cultural
Dimensions. Retrieved on 26 November, 2015 from
http://www.clearlycultural.com/geert-hofstede-cultural-
dimensions/Wengrzyn, R (21 September, 2012). Geert Hofstede
Cultural Dimensions. Retrieved on 26 November, 2015 from
http://study.com/academy/lesson/hofstedes-cultural-dimensions-
theory.html