Hrm Less Ethnocentric More Polycentric
1. Why do individuals and organization have to become less ethnocentric and more polycentric when operating in an international context?
Brewster, Sparrow and Vernon (2007) claim that there is a significant debate between those who believe that the world is getting more globalized and therefore all aspects of management, including HRM, are becoming more alike, and those who believe that each country continues to have its own approach to management in general and human resource management in particular.
Organizations have several choices in structuring their international operations according to Perlmutter (1969). The following two orientations mediate the response of organizations and how they structure themselves abroad according to such criteria as whether to emphasize the global or the local.
Ethnocentric organizations are home country-oriented corporations which are run from the headquarters. The foreign subsidiaries are not given autonomy or power to make strategic decisions and are even managed by expatriates from the home country. Ethnocentric organizations seem to assume that practices that work in the home country will work successfully anywhere in the world without any kind of modification. Cultural sensitivity is regarded as of little importance and the organization assumes there is only one way to manage and organize.
Polycentric organizations are host country centered organizations in which each subsidiary is given autonomy in its own decision-making. Each subsidiary is considered as a distinct national entity. Most subsidiaries are managed by local employees who are seldom promoted to positions at headquarters. The practice of the polycentric approach is the belief that each country is unique. This idea allows a company to adapt and develop unique business and marketing strategies to the cultures of each country the company works in. Franchises often use the polycentric approach successfully.
These two orientations are not necessarily
Brewster, Sparrow and Vernon (2007) claim that there is a significant debate between those who believe that the world is getting more globalized and therefore all aspects of management, including HRM, are becoming more alike, and those who believe that each country continues to have its own approach to management in general and human resource management in particular.
Organizations have several choices in structuring their international operations according to Perlmutter (1969). The following two orientations mediate the response of organizations and how they structure themselves abroad according to such criteria as whether to emphasize the global or the local.
Ethnocentric organizations are home country-oriented corporations which are run from the headquarters. The foreign subsidiaries are not given autonomy or power to make strategic decisions and are even managed by expatriates from the home country. Ethnocentric organizations seem to assume that practices that work in the home country will work successfully anywhere in the world without any kind of modification. Cultural sensitivity is regarded as of little importance and the organization assumes there is only one way to manage and organize.
Polycentric organizations are host country centered organizations in which each subsidiary is given autonomy in its own decision-making. Each subsidiary is considered as a distinct national entity. Most subsidiaries are managed by local employees who are seldom promoted to positions at headquarters. The practice of the polycentric approach is the belief that each country is unique. This idea allows a company to adapt and develop unique business and marketing strategies to the cultures of each country the company works in. Franchises often use the polycentric approach successfully.
These two orientations are not necessarily
References: Brewster, C., Sparrow, P. and Vernon Guy (2007) International Human Resource Management. London: Chartered Institute of Personnel and Development. Perlmutter, H. (1969) The tortuous evolution of the multinational corporation. Columbia Journal of World Business, 1: 9-18 Hofstede, G. (2001) Culture’s Consequenses, 2nd edition. London/Thousand Oaks. Armstrong, M. and Baron, A. (2004) Managing performance: performance management in action. London: Chartered Institute of Personnel and Development. Organ, D. W. (1988). A restatement of the satisfaction-performance hypothesis. Journal of Management, 14, 547-557. Caulkin, S. (2001). Performance through people. The new people management: Chartered Institute of Personnel and Development.