The geocentric policy of human resources

November 25, 2021 0 Comments

The geocentric approach to multinational operations reflects the attitude that circumstances dictate the best policies and the most suitable people to staff operations. The geocentric approach could be located somewhere between the ethnocentric and the polycentric approach, since it considers that the best elements of each culture should be adopted in the design of human resource systems and the most qualified individuals, regardless of nationality, should be employed. in key positions in a multinational company. The geocentric approach is purportedly the most advanced of human resource policy approaches, and the one driven by ever-accelerating globalization that blurs cultural boundaries and barriers.

On the other hand, it requires a substantial investment and knowledge of cultural factors on the part of the multinational corporation. The geocentric approach is more likely to characterize corporations that are in advanced stages of internationalization. In the staffing of operations, it is manifested by the use of nationals of the country of origin, the host country and third countries in key positions, both at the headquarters and in the host countries of the multinational corporation. What matters most is credentials and fitting into the position rather than the home country. The country of origin can be taken into account when considering a factor that can affect job success.

For example, American companies tended to prefer British nationals for managerial positions in their British colony formation operations because the British were supposed to be more familiar with the culture and institutions of the host countries and also with the culture (and the environment). language) American. In general, third-country nationals can bring the following qualities: (1) understanding of the transaction from the perspective of a foreigner, which is not biased by the cultural perspective of the country of origin or the host country; therefore, these individuals can contribute more unbiased and potentially new ideas and perspectives; (2) greater likelihood of acceptance by home and host country employees; and (3) demonstration of the global image of the multinational corporation.

An increasing number of companies around the world are employing third-country nationals in key positions; One of the main reasons for this is, as already seen, the need for the most competent individual to assume important roles and the fact that, as organizations become global, they gradually dissociate from particular countries. Even Japanese corporations, which have traditionally adhered to an ethnocentric approach to staffing, are gradually abandoning this policy. This is because they have increasing proportions of their interests in countries outside of Japan and realize that it is necessary to take into account the perspectives of these countries in their strategic planning; hence the need to include nationals of these countries in key positions, including boards of directors.

An example of a national appointment from a third country in a key position of a multinational is José López (Ignacio López de Arriortua), a Spaniard who in the 1980s and 1990s held executive positions in both General Motors (an American multinational corporation) as in Volkswagen. (a German multinational corporation). The ultimate manifestation of geocentric human resource policy is the appointment of nationals from the host country to key positions at headquarters, that is, in the country of origin. These individuals are labeled “patriates.” A prime case has been the 2005 appointment of Howard Stringer (British, with a business career in the United States) as CEO of SONY, allegedly the first foreign-born CEO of a major Japanese company.

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