Staffing

Staffing deals specifically with the acquisition, training and allocation of the organisation's
human resources. In both the domestic and the international context, the staffing process can
be seen as a series of steps that are performed on a continuing basis to keep the organisation
supplied with the right people in the right positions at the right time. The steps in this process
are:

• human resource planning (this is part of the organisation's strategic plan)

• recruitment
• selection
• induction and orientation
• training (to improve job skills)
• development (to educate people beyond the requirements of their present position)
• performance appraisal
• remuneration and rewards
• transfers
• separations.

In an international business, the way in which these steps are administered depends very
much on the firm's strategy and the staffing policy chosen to support that strategy. There are
four choices in policy: the ethnocentric approach, the polycentric approach, the geocentric
approach and the regiocentric approach. What follows is a shorthand description based on
Dowling and Welch (2004) of the four using the same criteria for each approach. You should
use these descriptions as the 'skeleton' of your understanding of the four approaches and use
the reading from Hill (2005) to provide the 'flesh'.
Ethnocentric approach
Definition: Ethnocentricity (ethnocentrism) is a belief in the
superiority of one's own ethnic group. The firm
basically believes that parent-country nationals are
better qualified and more trustworthy than host
country nationals.
Rationale and advantages: Experience curve effects derive from
standardisation of production. The firm produces
in the home country initially and transfers its core
competency to the host country under the
guidance of expatriate managers. These managers
have the knowledge to create value through core
competencies. They also contribute to the
maintenance of the corporate culture.
Problems and Denies advancement to host country nationals.
disadvantages: This may breed resentment and diminish the firm's
public image. Expatriate managers are expensive
to maintain: they may become insular in their
attitudes and be prone to cultural myopia. The
latter may result in management overlooking
market niche opportunities.
Polycentric approach
Definition: Polycentricity (polycentrism) is a belief that local
people know the local environment better than
outsiders.
Rationale and advantages: Gives hope for profit maximisation through
flexibility because local managers can react
quickly to market needs in the areas of pricing,
production, product life cycle, and political
activity. Absence of problems associated with
expatriate managers including cultural myopia.
Provides continuity in the management of foreign
subsidiaries.
Problems and No synergy because there is little communication
disadvantages: between national units. Limits experience of host
nationals to their own country. Corporate
headquarters may become isolated from national
units and lead to lack of integration. This in turn
may lead to corporate inertia.
Geocentric approach
Definition: Geocentricity (geocentrism) is the notion that the
best people should be employed, regardless of
their nationality.
Rationale and advantages: Enables the firm to make best use of its human
resources and builds a cadre of executives who
feel comfortable working in any culture.
Ethnocentric and polycentric pressures are
balanced in favour of optimising the company's
operations. The ethnocentric pressure for low cost
standardised operations is satisfied because
enough of the right kinds of products exist in the
global customer base to permit scale economies
and experience curve effects. The polycentric
pressure for local responsiveness is satisfied
because of the need to meet the distinctive
characteristics which remain in every market.
Problems and May be contrary to host countries' desire for the
disadvantages: MNE to employ local citizens. Expensive to
implement because of the need for considerable
cross-cultural training and development.
Regiocentric approach (Note: This option is not covered by Hill (2005); it
is included here for interest and to indicate that
 other authors have a perspective which is different
from Hill (2005).
Definition: Regiocentricity is the variation of staffing policy
to suit particular geographic areas.
Rationale and advantages: Policy varied to suit the nature of the firm's
business and product strategy. Allows interaction
between executives because of inter-regional
transfers. Shows some sensitivity to local
conditions. Provides a 'stepping stone' for a firm
wishing to move from an ethnocentric or
polycentric approach to a geocentric approach.
Problems and May produce federalism at a regional (rather than
disadvantages: a country) basis and constrains the firm from
taking a global stance. May improve career
prospects at the national level, but only to the
regional level: staff may never attain positions at
corporation headquar