What approach to employment do most managerial positions in foreign offices use?

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Inhaltsverzeichnis Show

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Methodology/approach
Originality/value
Recruitment and Selection
Employee Development
Pay and Reward
Alternative Approaches
What are the approaches to international staffing?
What are the three main approaches to the staffing of international business operations?
What is ethnocentric approach in international business?
Which approach favors the hiring of host country nationals?

Abstract

Purpose

South Korean multinational enterprises (MNEs) have developed rapidly since the late 1950s. This chapter investigates South Korean MNEs’ talent management, more specifically international recruitment and selection policies and practices in their Chinese operations.

Methodology/approach

Using the snowball method through Chinese and Korean networks we recruited ten Korean MNEs to participate in this research. We conducted semi-structured interviews with key individuals within the organisations.

Findings

It reveals that South Korean MNEs tend to adopt the polycentric approach or a mixed approach of being polycentric and ethnocentric to international staffing, with the number of expatriates reducing gradually over time. South Korean MNEs adopt ‘one-way selection’ in recruiting and selecting expatriates and localise recruitment procedures and selection criteria for host-country nationals.

Originality/value

South Korean MNEs have paid inadequate attention to: firstly, expatriates’ career development; and secondly, personal and family issues emerging from expatriation and repatriation. This study highlights these issues.

Keywords

Expatriate
International human resource management
International recruitment and selection
International staffing
Multinational enterprise
South Korea

Citation

Kang, H. and Shen, J. (2016), "Global Talent Management: International Staffing Policies and Practices of South Korean Multinationals in China", Global Talent Management and Staffing in MNEs (International Business and Management, Vol. 32), Emerald Group Publishing Limited, Bingley, pp. 25-48. https://doi.org/10.1108/S1876-066X20160000032019

Publisher

Emerald Group Publishing Limited

Small businesses are expanding into international markets due to improvements in technology and increasing globalization. This expansion includes setting up production facilities and sales offices abroad. To reduce the perceived risk in these new ventures, companies may be tempted to adopt an ethnocentric approach to their HR practices. Ethnocentric companies appoint expatriates to fill senior posts and enforce the same rules and practices abroad that apply in their country of origin.

Recruitment and Selection

An ethnocentric company assumes that the host country will be unable to supply skilled labor. Although it will recruit local people for low-level positions, an ethnocentric company will reserve skilled positions and managerial roles for employees from its home country. During the recruitment and selection process, an ethnocentric company risks imposing cultural norms from its home country. It may struggle to find suitable employees because it seeks qualifications that are not undertaken in the host country or insists that low-level employees speak a second language to enable them to communicate with expatriate managers.

Employee Development

Ethnocentric companies usually fill senior roles with expatriate employees from their home nations, often on short-term assignments. They are unlikely to offer management training or high-level technical training to nationals from the host country; this limits the ability of local people to progress into promoted posts. Host country nationals have little chance to climb the career ladder. Talented local employees may leave to take up promoted posts with other companies if they become frustrated with the lack of opportunities for advancement. The high level of turnover of both expatriate and local employees can have a destabilizing effect on the company.

Pay and Reward

Expatriates often receive enhanced pay and reward packages to encourage them to accept foreign assignments. These packages typically include expenses for accommodation in the host country, flights for the employee and his family and enhanced rates of pay. HR needs to carefully manage the pay differential between expatriates and local employees because it can be a source of tension. The differential in pay can demotivate host country nationals. In addition, expensive pay and reward packages for expatriates can have an adverse impact on the profitability of the venture.

Alternative Approaches

Small companies can adopt alternative approaches to managing their international ventures. A polycentric approach encourages companies to treat each foreign venture as a separate entity, managed and staffed by local people and run in accordance with the local customs and culture. However, local managers are unlikely to transfer to headquarters in a polycentric company. A geocentric company treats its workforce as an international pool, with the best talent drawn from every country and deployed where needed, irrespective of nationality. Regiocentric companies take a similar approach to geocentric companies but restrict employees to moving within regional areas.

What are the approaches to international staffing?

There are four approaches to international recruitment: ethnocentric, polycentric geocentric, regiocentric.

What are the three main approaches to the staffing of international business operations?

Research has identified three types of staffing policies in international businesses: the ethnocentric approach, the polycentric approach, and the geocentric approach.

What is ethnocentric approach in international business?

Definition: The Ethnocentric Approach is one of the methods of international recruitment wherein, the HR recruits the right person for the right job for the international businesses, on the basis of the skills required and the willingness of the candidate to mix with the organization's culture.

Which approach favors the hiring of host country nationals?

When a company adopts the strategy of limiting recruitment to the nationals of the host country (local people), it is called a polycentric approach. The purpose of adopting this approach is to reduce the cost of foreign operations gradually.