Ivan Zlatkov International Management MGT 4130 Home Work Week 11 Dr.

Wright 11/4/ 2010

There are different alternative staffing approaches that international operations can use. The first one is called ethnocentric staffing approach. This approach uses parent- country nationals in their managerial positions. Advantages of using home managers are adaptability to the companys goals, way of operating, and policy because they are familiar with the way the company does business and they are also familiar with the companys resources and how to utilize them best. This approach is being used also when a company need to keep close communication with headquarters, as there is no cultural difference and communication is very easy. Company can use this approach if they cannot find qualified manager in the foreign country to do the job. Many companies prefer to use PCN

when comes to the high-level management. For example, the CEO and the CFO of an international companies are almost always from parent-county nationals. This is understandable because this way the company can have very strong control over the branches in foreign countries. Furthermore, PCN is used when experienced management is required for new international adventures. Disadvantages of using PCN include the lack of

opportunities for local managers to grow in the company, and I can very much understand this. From my point of view I would love to work for an American company back home, but if I knew in the beginning that I have no opportunity for growing in this company I may still work for it, but probably I would not be loyal to it. And that is one of the biggest disadvantages of PCN, locals will not be loyal to company where they just feel like they are being use. Another disadvantage can be the poor adaptation and lack of effectiveness of expatriates in foreign countries. It is hard to imagine manager who has been working only in one culture and one country to go abroad and do great in a completely different business environment. Even if he or she adapt very well to the new place their employees probably will not be the same quick adaptive people and there will still be difficult for the company. Also, this way company might lose one of the most important things for business diversity. Having the same types of people making the same types of decision is not what will make a company grow. Diversity is encouraged everywhere in the world and staying away from it is a big mistake that modern businesses cannot afford.(Muris p.3) Another strategy when comes to international business is called polycentric staffing approach. In this approach

local managers are hired on key positions in their own countries. This approach is effective for companies when comes to multinational strategy. If a company wants to grow locally hiring managers from the same country make sense. These local managers are familiar with the way business is done in the area, local regulations, they also may have important connections the company can use later on. For employees is easier to accept local managers how understand them and speak the language and this is a very important advantage. Coastwise, it is easier for companies to hire local managers because transferring people from the headquarters is expansive. It is also related to transferring not only the person, but his whole family with wife and kids. That means the risk for not someone not adapting to the culture grow. It is even more expensive to find out the person that was sent abroad wants to come back home, than the whole process starts over.(in class video) Another approach used in doing international business is global staffing approach. This is when best managers are recruited from within or outside of the company, regardless of their nationality. This is a tactic used mainly in European countries.(Amerilo p.1) Advantages of this approach are that companies have greater pool of qualified applicants. This is diversity first hand. These managers

coming from outside the country are very experienced and knowledgeable people willing to share everything they know. That is very important for global companies since they want to grow and have people looking at issues from different points of view. Companies using this approach are leaving out the whole idea of local managers, it is totally international environment and employees feel confident and filled of opportunities to grow in the company, which makes the inside environment very productive and competitive. Another approach is regiocentric staffing approach, recruiting is done on a regional basis. That means companies from Europe will hire people only from Europe. In this approach managers are hired because of the experience they have in their home country. Other reasons can be the political stability of the home country of the manager, or the technology that is in use in that country. Companies may be trying to invent special policy that work good in the neighbor country and that is why they would hire a person from that country who is familiar with the policy. (Kolinski p.4) The role of HRM in international context is very important because usually companies who are in expending internationally invest a lot and they expect to receive a lot back from that. HR has very important role in making

the business work appropriate. Choosing the right people for the right job is crucial. As we know they are many different approaches that can be taken when comes to international business and companies going global. HR is the institution in the company that has to make the decision what will best suit a certain situation. Choosing an approach can be very difficult and challenging it is related to high costs and can make a company grow or can make it fail. I would like to finish with a quote from professor Woest who is a very experienced and respected businessman and teacher, he once said in class the most important departments in a companies are HR and Finance(Woest).

Work Cited: J. Muris 2010

http://www.itapintl.com/whatwedo/globalhrmod.html K. Amerilo 2009 http://www.businesseurope.eu/Content/Default.asp?PageId=496 R. Kolinski http://www.scribd.com/doc/23210064/IHRM-Staffing-Approach J. Woest 2009