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How to Manage a Diverse Team of International Managers

According to Dowling and Welch 2007, there are 4 Multinational entity approaches, namely ethnocentric, polycentric, geocentric, and egocentric. The ethnocentric approach indicates that the decisions are made by the PCN, and the key positions can be held by the personnel from the headquarters. It has many advantages, like it makes up for the lack of qualified managers in the host country. As the managers belong to the same hierarchy, so there is no communication gap, and the coordination gap between them and the control links with the parent organization is strong and in compliance with the MNE policies.

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They can also be trusted to take the initiative for the MNE in the host country. Though it may limit the promotional opportunities for HCN employees, and as a result, resentment and discontentment are developed. It also takes a while for the expatriate managers to acclimatize to the new environment/country, which may lead to poor decisions and mistakes by the PCN. Another issue that may be considered is the difference in the compensation packages between the PCN and HCN. The emigrant authority may not be sensitive to the host inhabitant’s sensibilities.

The second approach under discussion is the Polycentric Approach which indicates that the subsidiary is in authority and has the power of decision making. While employing HCN eliminates language barriers and no time is wasted due to the acclimatization process, and no cultural awareness programs are required. The HCNs help the MNE to tide over politically sensitive situations. The HCNs receive salaries according to the pay structure of the host country, and by paying a slightly better salary, premium personnel can be attracted (Kelly, 2008). Hence, offering continuity to the foreign subsidiaries and less turnover ratio of key managers.

Even then, there are a few disadvantages that should be taken care of in order to make HCN employees more valuable and distinguished. Steps can be taken like the gap between the HCN and PCN managers should be decreased, and language barriers should be omitted in order to reduce the communication gap. Biased environments and practices need to be avoided for the smooth running of operations. The HCN managers can enjoy promotional opportunities by providing services in their home country only. This makes resource allocation and strategic decisions difficult; this could be sorted by having a key HCN in place.

The geocentric approach is where the PCN recognizes each of its subsidiaries as unique in contribution and competence—leading to a worldwide integration of business where the nationality of the personnel is ignored in favor of ability. This helps PCN to create an international executive team that transcends cultures and borders, uniting. Such businesses guarantee satisfaction to the managers and assure loyalty. It assures cooperation and resource sharing across the globe.

The only disadvantage which is observed is that the host country prefers to give a chance to its own nationals and may apply immigration controls to assure this. The issue is whether the HCNs are adequately qualified or not? The expatriates are required to submit extensive documentation if they are hired in the Western countries, which is again a time-consuming and expensive exercise. This policy can be expensive due to relocation and training costs as PCNs require sending a large number of managers for training to maintain the international standards (Rajagopal, 2008).

The regiocentric approach is where the pool of managers moves within a particular geographical region. This allows interaction between the regional headquarters (Kelly, 2008). These managers reflect sensitivity to the regional requirements as the subsidiary is staffed by HCN, making way for a polycentric/ethnocentric or geocentric approach to the organization. The regiocentric approach is the best as it allows room for the evolution of our MH Company.

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Bibliography

Dowling, P., & welch, D. (2007). International HRM. New York: Thomson Learning.

Kelly, P. (2008). Achieving desirable group-work outcomes through the group allocation process. An International Journal , 228-229.

Rajagopal, A. (2008). Team performance and control process in sales organizations. An International Journal , 200-203.

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