Quiz 17: Global Human Resource Management


AZ is pursuing a geocentric staffing policy with regard to its high potential employees. These were the only employees who were considered for foreign postings. These employees were posted to various foreign countries on posting for at least three years each. These were employees that had been identified by their HR department as having the potential for multiple overseas placements. These employees had to undergo a rigorous screening process before being admitted to this group.

In an ethnocentric staffing policy , management teams in the parent country of a company make all staffing decisions. This approach takes, for example, when executives in the parent country feel employees in the host country are not qualified to make staffing decisions. This happens a lot in third world countries. It also helps transfer over fundamental competencies from the parent country to the host country. In these senses, this approach would consider advantageous. However, a couple disadvantages to this approach would be the host country becoming resentful of the parent country, and a short-sidedness in the company's response to cultural differences because this approach use less and less. In a polycentric staffing policy , the company headquarters is still in the parent country. The difference between an ethnocentric staffing policy and a polycentric staffing policy is that in a polycentric policy, host country nationals manage subsidiaries. This accounts for cultural differences that the parent country nationals might not understand. A disadvantage to this policy is the limits that it imposes on host country nationals to move up in the company. Their progression within the company caps within their own country. Another disadvantage is that company headquarters is also isolated from the host country. This approach used when there is a large gap in cultural differences between the parent country and host country in order to approach the host country's market with a more significant cultural impact. In a geocentric staffing policy , positions fill based solely off merit; nationality is irrelevant in this policy. Many would consider this staffing policy to have the most advantages, the most important being that it allows a global company to use its resources efficiently and effectively. Furthermore, the culture of companies with this policy flourishes under this policy since strong networks built without national limitations. This approach can use when immigration laws do not limit employment opportunities.

A firm's organizational structure plays a vital role in designing the strategy and its superior performance. • People are the cornerstone of the organization. • A firm has to have the right people in the right place at the right time to gain a competitive advantage. • These people have to be trained to have the right skill sets required to perform their jobs effectively and efficiently. Their actions must be according to the firm's culture. • Their compensation should incentivize them to take actions that promote the firms strategy. All this is achieved by having an effective Human Resource Management (HRM) function. The HRM function handles the staffing, training, compensation and performance appraisal activities. It has a critical impact on the people, the culture, and incentive and control systems that form the firm's organizational architecture. This shows that the HRM professionals are critically important for the performance of the firm and they hold strategic responsibility. To sum up, a well performing HRM system helps in implementing the strategies in the firm. This, in turn will improve the performance of the firm. Hence, these are interrelated.