The basic idea of every business enterprise on the globe is to strive for profit maximization. To realize this particular objective corporations have to operate across international borders. In doing so, it is assumed that there is a company-network consisting of the mother company that is always located in the home-country, whereas the subsidiaries are situated in the host-countries. Moreover it is important to recognize that there are different approaches how to fill the senior executive positions within the whole company group. One of the very first scientists, who dealt with this issue, was Howard Perlmutter in 1969. He firstly found out that there is a clear distinction of three orientations how Multinational Corporations would be differentiated:
The ethnocentric perspective, also defined as the home-country-perspective.
The polycentric orientation, called as the host-country-perspective.
The geocentric approach, the world-wide-perspective, which is the most specialized orientation, gained particular recognition.
The aim of this research paper is to allow an insight into the specifics of Multinational Corporations, with special focus on the geocentric staffing approach.
Table of Contents
1 Introduction
1.1 Research problem
1.2 Course of investigation
2 Multinational Corporations
2.1 Corporate Strategy
2.2 MNC`s Function and Global Distribution
2.3 The EPG Concept
3 Pros of the Geocentric Staffing Concept
3.1 Limitation to the Geocentric pattern
3.2 Pros of the Geocentric Staffing Concept
4 Cons of the Geocentric Staffing Concept
5 Conclusion
5.1 Summary
5.2 Critical Acclaim
5.3 Outlook
Research Objectives and Key Topics
This research paper aims to provide an in-depth understanding of multinational corporations, specifically focusing on the geocentric staffing approach initially proposed by Howard Perlmutter in 1969. The work evaluates whether a global, nationality-independent staffing strategy offers a competitive advantage for international enterprises by weighing its benefits against inherent costs and structural challenges.
- Analysis of the EPG (Ethnocentric, Polycentric, Geocentric) model in multinational management.
- Evaluation of geocentric staffing as a strategic tool for global integration.
- Examination of the financial and logistical implications of recruiting third-country nationals (TCNs).
- Comparison of different staffing orientations regarding corporate strategy and control.
- Assessment of country-specific restrictions and their impact on global staffing policies.
Excerpt from the Book
3.2 Pros of the Geocentric Staffing Concept
In the following analysis a list of relevant advantages, which is covered by the geocentric perspective, will be presented.
Howard Perlmutter distinguishes various aspects and functions between the three management concepts, in order to analyze each approach specifically. The emphasis of this investigation is restricted on the geocentric staffing sector.
MNCs have the opportunity to choose between three staffing possibilities (see table 1). In the next step they have to agree on that staffing method, which is most suitable for their particular conditions: “The employment of parent country nationals (PCN`s), host country nationals (HCN`s), or third country nationals (TCN`s)” (Scullion, 1999, p. 55). To explain TCN: Third country nationals are expatriates, who have their initial homes neither in the country of employment nor in the home country companies (Gomez et al., 2012, p. 78). In this context the geocentric approach deals with the recruiting of the TCN`s.
At first the geocentric staffing method has the advantage that the performing executives are not only integrated in the headquarters, but also in the affiliates (Osiecka, 2003, p. 56). As a result the core competencies and the amount of decision making power between headquarter and subsidiaries are global equally distributed. With this understanding an adaption of many cultures in a global view takes place within the company. Regarding to this multicultural approach it is easier to maintain long-term business relations world-wide.
Summary of Chapters
1 Introduction: This chapter defines the research problem, linking the concept of geocentrism to modern human resource management and outlining the scope of the investigation.
2 Multinational Corporations: This section covers the theoretical foundations of corporate strategy, the distribution of multinational firms, and introduces Howard Perlmutter’s EPG-typology.
3 Pros of the Geocentric Staffing Concept: This chapter explores the advantages of the geocentric approach, focusing on the strategic benefits of employing the best talent worldwide regardless of national origin.
4 Cons of the Geocentric Staffing Concept: This chapter critically examines the disadvantages, including high relocation costs, the complexity of identifying suitable global managers, and the impact of national legal restrictions.
5 Conclusion: The final chapter summarizes the findings, provides a critical assessment of the research base, and offers an outlook on future trends in multinational staffing.
Keywords
Geocentric, ethnocentric, polycentric, staffing, recruiting, Howard Perlmutter, subsidiaries, headquarters, Multinational Corporation, corporate strategy, ERP model, expatriates, international management, global workforce.
Frequently Asked Questions
What is the primary focus of this research paper?
The paper focuses on the geocentric staffing concept within multinational corporations, analyzing its implementation as a global management strategy.
What are the three main management orientations discussed?
The paper discusses the EPG model, which consists of the ethnocentric (home-country), polycentric (host-country), and geocentric (world-wide) orientations.
What is the central research question?
The primary research goal is to determine if the geocentric staffing approach is a sensible and effective strategy for multinational corporations to adopt.
Which scientific methodology does the author utilize?
The author performs a literature-based analysis of corporate strategy and international human resource management, specifically interpreting and applying Howard Perlmutter’s 1969 management models.
What topics are covered in the main body of the work?
The main body examines the definitions of corporate strategy, the global distribution of MNCs, the mechanics of the EPG-model, and a detailed pros-and-cons analysis of geocentric staffing.
Which keywords best describe the document?
Key terms include Geocentric, EPG-model, Multinational Corporation, Staffing, Recruiting, Corporate Strategy, and Expatriates.
Why is the geocentric approach considered the most sophisticated?
It is viewed as the final stage of evolution for an international firm, aiming to optimize resources by hiring top talent regardless of nationality, thereby fostering a global, integrated network.
What are the primary disadvantages of geocentric staffing mentioned?
The main drawbacks include high relocation costs, the difficulty of finding managers with the required global competence, and legal barriers imposed by some countries on foreign hiring.
How does the author evaluate the "Gillette" case study?
The author uses Gillette as an example of successful geocentric staffing, where the majority of expatriates are recruited from outside the firm's home country.
- Arbeit zitieren
- Till Schaumann (Autor:in), 2012, The Pros and Cons of Geocentric Staffing by Perlmutter (1969), München, GRIN Verlag, https://www.grin.com/document/286450
