Question

statememt . Q5.Assess the situation in which ethno centric recruitment will be appropriate and the situation when polycentric recruitment will be advisable. Give reasons for your answer. yach

Answer 1

Ethnocentric recruitment:

- Under this approach, MNCs at their headquarters formulate mission, objectives, important decisions for the subsidiaries and expect the subsidiaries to implement them and report back to all functional managers at headquarters level

- Therefore, it source HR for subsidiaries from its own countries or the country where headquarters are situated

- When a company follows the strategy of choosing only from the citizens of the parent country to work in host nations, it is called ethnocentric approach. Normally, higher level foreign level positions are filled with expatriate employees from the parent country. The general rationale behind the ethnocentric approach is that the staff from the parent country would represents the interests of the headquarters effectively and link well the parent country.

Ex - Procter and Gamble, Philips, Samsung

- Philips filled important vacancies by Dutch Nationals before 1990s as it was a Dutch company

- In 1996, 715 of subsidiaries of Japanese MNCs were headed by Japanese nationals

- Toyota, Samsung follow this approach even today

Polycentric recruitment:

- MNCs under this approach treats each subsidiary as an independent company and decentralizes almost all the operations and delegates decision making authorities to its executives

- These executives formulates the strategies based on the mission and vision of subsidiary, design product's based on host country's environment

- MNC sources prospective employees including senior managers, for the subsidiary from the host country nationals and local nationals

- When a company adopts the strategy of limiting recruitment to the nationals of the host country (Local people), it is called polycentric approach.

Ex - Coca Cola