informal management networks
Helps build strong culture and informal management networks
While the staffing policies described here are well known and widely used among both practitioners and scholars of international businesses, some critics have claimed that the typology is too simplistic and that it obscures the internal differentiation of management practices within international businesses. The critics claim that within some international businesses, staffing policies vary significantly from national subsidiary to national subsidiary; while some are managed on an ethnocentric basis, others are managed in a polycentric or geocentric manner.15 Other critics note that the staffing policy adopted by a firm is primarily driven by its geographic scope, as opposed to its strategic orientation. Firms that have a broad geographic scope are the most likely to have a geocentric mind-set.16
• QUICK STUDY
1. Outline the advantages and disadvantages of an ethnocentric staffing policy.
2. Outline the advantages and disadvantages of a polycentric staffing policy.
3. Outline the advantages and disadvantages of a geocentric staffing policy.
LEARNING OBJECTIVE 3
Explain why managers may fail to thrive in foreign postings.
Two of the three staffing policies we have discussed—the ethnocentric and the geocentric—rely on extensive use of expatriate managers. As defined earlier, expatriates are citizens of one country who are working in another country. Sometimes the term inpatriates is used to identify a subset of expatriates who are citizens of a foreign country working in the home country of their multinational employer.17 Thus, a citizen of Japan who moves to the United States to work at Microsoft would be classified as an inpatriate (Microsoft has large numbers of inpatriates working at its main U.S. location near Seattle). With an ethnocentric policy, the expatriates are all home-country nationals who are transferred abroad. With a geocentric approach, the expatriates need not be home-country nationals; the firm does not base transfer decisions on nationality. A prominent issue in the international staffing literature is expatriate failure—the premature return of an expatriate manager to his or her home country.18 Here, we briefly review the evidence on expatriate failure before discussing a number of ways to minimize the failure rate.