Difference culture orientation final

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Ethnocentric as defined by Haviland is “the belief that one’s own culture is superior in every way to all others? (Haviland, 1991/2001) It is a belief validated by the culture’s own criteria for superiority. Even when cultures or individual members of cultures assimilate “foreign? objects, practices or ideas, the outgroup origins of the same are de-emphasized and quickly and conveniently forgotten.

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Home country is superior to others Sees only similarities in other countries Assumes products and practices that succeed at home will be successful everywhere Mission is profitability. Top down decision making – major decisions are made at headquarters Global strategy, determined at headquarters. Global product (based on needs of home country) Home country managers hold key positions everywhere. Profits from subsidiaries are repatriated (go back) to corporate headquarters Headquarters makes decisions about budgets, profit targets, and capital investment for the subsidiaries.

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Each country is unique • Each subsidiary develops its own unique business and marketing strategies • Often referred to as multinationalLeads to a localized or adaptation approach that assumes products mustbe adapted to local market conditions Host-country nationals manage subsidiaries Parent company nationals hold key headquarter positions Best suited to multi-domestic businesses

Polycentric Policy : 

Polycentric Policy Advantages: Alleviates cultural myopia. Inexpensive to implement Helps transfer core competencies the firm is less likely to suffer from cultural myopia it may be less expensive to implement Disadvantages: Limits opportunity to gain experience of host-country nationals outside their own country. Can create gap between home-and host-country operations host country nationals have few opportunities to gain foreign experience and so cannot progress beyond senior positions in their own subsidiaries a gap can form between host country managers and parent country managers

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• Entire world is a potential market • Strives for integrated global strategies • Also known as a global or transnational company • Retains an association with the headquarters country • Pursues serving world markets from a single country or sources globally to focus on select country markets • Leads to a combination of extension and adaptation elements Global product, with local variations

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Seek best people, regardless of nationality not always possible Best suited to Global and trans-national businesses Advantages: Enables the firm to make best use of its human resources Equips executives to work in a number of cultures Helps build strong unifying culture and informal management network Disadvantages: National immigration policies may limit implementation Expensive to implement due to training and relocation Compensation structure can be a problem difficulties with immigration laws costs associated with implementing the strategy

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• A region is the relevant geographic unit Ex: The NAFTA or European Union market • Some companies serve marketsthroughout the world but on a regionalbasis Ex: General Motors had four regions for decades Mission is profitability and public acceptance Regional product, often with local adaptations

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Staffing policy is concerned with the selection of employees for a particular job It involves selecting people who have the right skills for a particular job It also involves developing and promoting the corporate culture of the firm (the organization’s norms and value systems)

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An ethnocentric approach to staffing policy is one in which key management positions in an international business are filled by parent-country nationals The policy makes most sense for firms pursuing an international strategy

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Familiarity with company goals, policies and procedures. knowing how to get things accomplished through headquarters. Knowledge of the corporation’s culture, and management techniques Loyalty and influence at headquarters Easier to assess Foreign image

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Lack of opportunities or development for local managers, thereby decreasing their morale and their loyalty to the subsidiary. Expensive orientation programs and incentives needed Unfamiliarity, communication problems, may not adapt to foreign culture Qualified people may not want the assignment Poor adaptation and lack of effectiveness of expatriates in foreign countries.

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A polycentric staffing policy is one in which host country nationals are recruited to manage subsidiaries in their own country, while parent country nationals occupy the key positions at corporate headquarters This approach minimizes the dangers of cultural myopia, but it also helps create a gap between home and host country operations If a company wants to “act local,” there are obvious advantages to staffing with HCNs.

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The HCNs managers are naturally familiar with the local culture, language, and ways of doing business, and they already have many contacts in place. HCNs are more likely to be accepted by people of both inside and outside the subsidiary, and they provide role models for other upwardly mobile personnel.

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One disadvantage of a polycentric staffing policy is the difficulty of coordinating activities and goals between the subsidiary and the parent company. Loyalty may be to host country, not to the foreign company Often difficult to find qualified people and to assess abilities Difficulty with the corporation’s culture and communicating with HQ May be weak in dealing with local government officials Expensive training and development programs needed

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In the geocentric staffing approach, the best managers are recruited within or outside of the company, regardless of nationality. For example, in 1992, General Motors hired J. Ignacio Lopez de Arriortua as vice president for worldwide purchasing, Xerox hired Vittorio Cassoni as executive vice-president, and Espirit de Corp hired Fritz Amman as president

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The advantages of a geocentric approach to staffing are that it enables the firm to make the best use of its human resources builds a cadre of international executives who feel at home working in a number of different cultures The disadvantages of geocentric approach include difficulties with immigration laws costs associated with implementing the strategy

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