Staffing for Global Operations free essay sample

In 21st century, we are seeing a big leap in the globalization of business and with this, the ability of management of an organization to work effectively across the cultural and national borders is playing a critical role in business success. Staffing management of multinational companies is a complex issue to the international human resource management (IHRM). With this stated, the statement, â€Å"Culture is a major variable for international management† is true in every sense.Keywords: expatriate, ethnocentric, polycentric, regiocentric, geocentric ? Introduction Culture generally refers to patterns of human activity and the symbolic structures that give such activity significance. Different definitions of â€Å"culture† reflect different theoretical orientations for understanding or criteria for valuing human activity. It refers to an ideal of individual human refinement, of the best that has been thought and said in the world (Wikipedia. org). In management, culture has a slightly different meaning.It can be explained as a set of policies, values, beliefs, and attitudes learnt and shared by the organizations member (Naylor, 2004). We will write a custom essay sample on Staffing for Global Operations or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page For this project, I will evaluate at how different kinds of management cultures in managing subsidiaries, which are located all over the world, can influence the development and growth of an organization in the modern era of globalization. International Business In the past, when people talked about international business, it only means that they exported their products to other countries.Nowadays, because of the development of free trade, any countries reduce their trade barriers in order to attract foreign companies in, to invest to and drive their domestic economy. Whenever people think about international business, it is no longer only trading from one place to another – they are thinking in terms of globalization. This means not only having investments, offices and businesses in their own country, but having similarly offices in different parts of the world as well (Citehr. com). In today’s global world, most big companies have their offices or business in many di fferent countries. Multinational enterprises often have their headquarters at their home countries and all their other offices, which may include offices in the same country but not at the headquarters and those located in other countries, need to report to them on a regular basis. Because culture is so different from one person to another and from one country to another, when an organization decides to open an office in a foreign country, they need to decide how they are going to manage their employees in the foreign country.Professionals sent a by their companies to work abroad and has been working and living in a foreign country is called an â€Å"expatriate† (Wikipedia. org). Company managers need to consider what kind of policies they should use within their subsidiaries. There are four main types of staffing for global operations: Ethnocentric, Polycentric, Regiocentric, and Geocentric approach. Ethnocentric Approach The definition of ethnocentric is â€Å"characterized by or based on the attitude that one’s own group is superior†(Merriam-webster. com, n. d. . Companies following the ethnocentric approach assume the home country approach is best and that employees from other parts of the world can and should follow its policies.Local companies may think that parent companies do not trust them and this may disincentive effect on local management morale and motivations. High costs, parent companies need to pay travel, residential, salaries, and other such expenses for expatriate employees and in most cases, the salaries for expatriate employees are much higher than salary for someone local. After assignments, normally a long-term oversea assignment is several years. The corporations need to have necessary arrangements on where the expatriates will go, and what they will do when they finish their assignments.Expatriate may not be able to adapt back to their original culture as they were away for too long (citehr. com). Polycentric Approach Polycentric staffing is an international staffing method in which multinational corporations treat each subsidiary as a separate national entity with some individual decision-making authority and hire host-country nationals as managers. This approach can minimize the dangers of cultural myopia, but it can create a gap between home and host-country operations (uslegal. com). Corporations use people from the countries in which their subsidiaries are located to fill management roles. General decisions and policies are made by local subsidiaries, which are suitable for their local environments and cultures to help them to achieve their parent company’s goals. Core strategic and functional capacities planning remain at headquarters (Marcbowles. com) Advantages of polycentric approach are low cost all the positions are recruited from the country where the subsidiaries are located. Organizations do not have to pay for travelling and accommodation expenses for the expatriate and his/her family. Increase acceptance. Government and people widely accept organizations that are willing to employ from their culture.They recognize this type of organization as legitimate participants in the local economy. It also demonstrates the business trust in the local population. Harmony, because all employees are also from the same country, they have similar culture which can reduce conflicts among the work force (Wikipedia. org) Disadvantages of polycentric approach are: Reduce of control of parent company, in this type of staffing, control exercise by headquarters may be reduce. This could make it difficult to balance local demands and global priorities.Different standards, each subsidiary have their own policies, which suit their cultures, but the standards will be different from one to another. This may lead to difficulties in achieving the organizations international goals. Short of communication. Communication between headquarters and subsidiaries is mainly just reporting. Headquarters may not know what is actually happening within the subsidiaries. This may lead to the postponement of difficult local decisions or problems as the local branches would try to solve it by themselves unless it is unavoidable (Wikipedia. rg) Regiocentric Approach Regiocentric approach is a philosophy of management whereby the firm tries to blend its own interests with those of its subsidiaries on a regional basis (College of Business Administration, 2007). A multinational corporation who has a regiocentric approach will divide parts of the world into regions. For example, a multinational company may divide Europe into different regions – Eastern Europe and Western Europe. Each corporation may have different definitions of the size of region, and which countries are in specific region. A company who adopts this approach selects suitable management level personnel within the region where the subsidiary is located. The regiocentric approach can be seen a development from ethnocentric or polycentric approach. It is similar to geocentric approach, but is limited to within different regions instead of the whole world. A regiocentric manager can be said to have a worldview on a regional scale, which could mean that the world outside the region in question might be viewed with an ethnocentric or polycentric orientation, or maybe a combination of two (marcbowles. om). Advantages of Regiocentric approach are effective; staff from the region where the subsidiaries operate will be more sensitive to regional needs. In general, people from the region will more in touch with the needs and concerns of the region and can make more suitable decisions based on this. These needs and concerns can also be communicated more effectively back to the company headquarters. Free movement, potentially, there are fewer difficulties in acquiring visas and work permits for staff moving from one part of the region to another.This will depend on the size of the region and the laws governing movement of people from one part of the region to another. Subsidiaries operating in Europe as a region should find it easy to relocate their expatriates from one part of the region to another without having to acquire work permits or Visas (ihrm. com). Some drawbacks of Regiocentric approach includes high cost, adaptability, social problems, and after assignments. Like in the case of ethnocentric approach, there is a high relocation, travel, and accommodation expenses incurred as staff are moved from one part of the region to another. Adaptability, managers who located within the region still encounters some difficulties adapting to the way of living in a different country within the region. For instance, people from Spain normally are more laid back, the pace of living and work is slower. They may find difficulties in working in fast-pace London. Social problems even though the expatriate employee(s) is not as far from home as those with ethnocentric or geocentric business, they still have to worry about how to bring their families with them or how to deal with being away from them.After assignments, as with the ethnocentric approach, the multinationals need to decide what they are going to do with the expatriates, whether or not they will have their original jobs back, and how well they can adapt to their home country after being away for a while (ihrm. com). Geocentric Approach A geocentric staffing policy seeks the best people for key jobs throughout the organization, regardless of their nationality. This approach is consistent with building a strong unifying culture and informal management network and is well suited to both global and transnational strategies.Immigration policies of national governments may limit a firms ability to pursue this policy (mhhe. com). Organizations that approach geocentric are focusing on commonalities across markets that allows corporations to take advantage of economies of scale in ways that polycentric corporations with decentralized operations cannot. Advantages of Geocentric approach are having the best employees, partnership relationship with parent companies and subsidiaries, and help in globalization. Best employees. Most of the employees that had been chosen are the most suitable person for the job. They have the knowledge and experience for the area in which they are recruited. Partnership relationship. The relationship between the parent companies and their subsidiaries are in partnership form. They are interdependent on each other. This kind of relationship is of more value due to each other’s presence. Help in globalization. Organizations recruit people from all over the world, which can help them to develop their business worldwide. Personnel are from every part of the world; their different cultures can help organization to achieve their goal and their local objectives (Wikipedia. rg) Just like the other approaches geocentric approach also have its own drawback, which includes, high cost and social problems. The regiocentric approach allows interaction between managers of an organization’s subsidiaries transferred to their organization’s regional headquarters. Managers have more sensitivity to local conditions as locals mostly staff the subsidiaries. It works in a similar way as the polycentric approach but towards a geocentric direction. The geocentric approach develops practices for worldwide use, which could be seen as seeing the global workforce as a whole. (ihrm. com) Which approach is the best? From the findings I got, there is no one best method.Organizations need to understand their aims and goals in order to decide which approach is the most suitable for their business. An organizations strategy on globalization strongly influences the approach it takes to management. It involves looking out and seeking competitive edge over other organizations by emphasizing and providing training for gaining insightful understanding of their global markets across different cultures and hence mobilizing the motivation triggers of their staff.