Staffing Strategy in International Busines | From a Business Professor
Short Summary:
This video from a business professor discusses staffing strategies in international business, focusing on three main approaches: ethnocentric, polycentric, and geocentric. The video explains each approach's advantages and disadvantages, using examples like Procter & Gamble, Phillips Electronics, Toyota, Samsung, and Mitsubishi Motors to illustrate the implications of each strategy. The professor highlights how the choice of staffing strategy impacts corporate culture, cost, and the ability to transfer core competencies. The video concludes by emphasizing the importance of aligning staffing strategy with overall business strategy (international, localization, global standardization, or transnational). No specific technologies are mentioned, but the discussion includes processes for selecting and managing international employees.
Detailed Summary:
The video begins by introducing the concept of staffing strategy in international business, using the example of Tesla's Gigafactory in Shanghai to illustrate the importance of choosing the right personnel for international operations. The professor then outlines three main staffing approaches:
1. Ethnocentric Approach: This approach involves filling key management positions with parent-country nationals. The video cites examples of companies like Procter & Gamble, Phillips Electronics (referred to as the "Dutch Mafia"), Toyota, and Samsung, historically employing this strategy. Reasons for using this approach include a perceived lack of qualified local talent, maintaining a unified corporate culture, and efficiently transferring core competencies (which are often tacit and difficult to articulate). However, the professor notes the downsides: limited advancement opportunities for host-country nationals leading to resentment and high turnover, and cultural myopia, illustrated by the Mitsubishi Motors sexual harassment lawsuit.
2. Polycentric Approach: This approach involves recruiting host-country nationals to manage subsidiaries, while parent-country nationals hold key positions at headquarters. It's presented as a response to the limitations of the ethnocentric approach. Advantages include reduced cultural myopia and lower costs. However, drawbacks include potential resentment from host-country nationals due to limited advancement opportunities beyond their subsidiary, a lack of cross-country cooperation hindering the transfer of core competencies, and difficulties in achieving integration between headquarters and subsidiaries.
3. Geocentric Approach: This approach assigns positions based on merit, regardless of nationality. The video uses examples like Tata Group and Sony (appointing Howard Stringer, a US citizen, as CEO) to show a shift towards this approach. Advantages include optimal use of human resources and the development of a unified corporate culture. Limitations include challenges posed by immigration regulations, high costs associated with training and relocation, and potential internal resentment due to higher pay for internationally mobile managers.
The video concludes with a summary table comparing the three approaches and their compatibility with different business strategies. The professor emphasizes that the choice of staffing strategy is crucial for a firm's success and should be carefully considered in relation to its overall international business strategy. The concluding statement encourages viewers to consider the implications of different staffing strategies and to leave their thoughts in the comments.