GRANT
journal
ISSN 1805-062X, 1805-0638 (online), ETTN 072-11-00002-09-4
EUROPEAN GRANT PROJECTS | RESULTS | RESEARCH & DEVELOPMENT | SCIENCE
A view of polycentric alias host country oriented state of mind
represents another possible orientation that affects the way that the
company conducts business abroad. It illustrates that for local
nationals is easier to deal with these host nationals because they do
not have to become adapted to new culture, they are acquainted with
that. Developing people of local nationality for key positions in their
own country is the basis of human resource management oriented in
this way. This attitude is welcomed between all local employees
however job promotion is limited only within a subsidiary.
Polycentric oriented companies are usually in regions that are very
diverse in culture. Single subsidiaries have to adapt to local
conditions and headquarters encourage some level of autonomy of
subsidiaries. Application of unified organizational culture could be
problematic and therefore plurality and subcultures are present there
[Scullion and Collings, 2006].
The autonomy of subsidiaries mentioned above together with
common underestimation of language and cultural barriers between
a subsidiary and headquarters brings issues in mutual coordination
between foreign firms. This may lead up to notional disintegration
of MNC in several independent national units that are more loyal to
their home country rather that their employer in headquarters.
Potential of international environment’s synergy is not sufficiently
and fully utilized.
Geocentric or transnational strategy is strategy oriented towards the
whole world. By influence of headquarters’ territory linked up with
national standards of foreign subsidiaries, cultures are more brought
together and individual specifics are better utilized. Regional parts
of international company work effectively and create synergy.
Implementation of organizational culture of this kind is neither
short-term nor effortless. The key positions in the whole company
are filled by the best people based on their work competences and
job results without regard to the country of origin and nationality.
Employees are required to have experiences in working in
multicultural environment in order to be capable to complete tasks
in various regions of the world. Despite mentioned difficulties, more
and more organizations select this strategy [Tureckiová, 2004].
Regiocentric strategy is the fourth approach of company’s
international strategy and it completes the EPG framework. This
orientation belongs within polycentric and regiocentric strategy. In
this case, international human resources are managed according to
geographic areas or set regions. Mobility of employees is going on
within these regions that are usually stated by natural borders, such
as region of Europe, South America, and Middle East [Heenan and
Perlmutter, 1979].
The framework EPRG explains a principle of function of
international human resource management. In practice, it is usually
combination of strategies mentioned above and the choice and
application depends on particular situation (e.g. opening new
branch, company´s aims, or political instability) in specific region.
According to research international companies usually go through
all these types of orientation, starting with the ethnocentric sight and
reaching the geocentric one [Perlmutter, 1969].
1.2
Types of staffing strategy in foreign subsidiary and
international assignments
International human resource management operating in MNCs has
generally three options of employees that can employ. These
employees can come from a home country where headquarters of
the company is established, secondly there is a host country where
foreign subsidiaries are allocated and there is also possibility of
another different country that might be a source of human capital as
well [Scullion and Collings, 2006]. According to this classification,
a staffing strategy of MNCs may include:
Parent Country Nationals (PCNs),
Host Country Nationals (HCNs),
Third Country Nationals (TCNs).
The chosen strategy of the management in the host country
influences where the company prefers its employees from. Each of
options mentioned above has its advantages and disadvantages for
the company, as for headquarters as for the subsidiary. PCNs send
out from the headquarters’ country and TCNs are usually minority
of all employees and their recruitment is linked with substantially
higher expenses however they are exactly the resource of human
capital that is very valuable and their management is the most
demanding [
Čuhlová, 2014].
Expatriates are skilled workers sent abroad by their home country
headquarters to a foreign subsidiary. Besides their assignment by the
employer, expatriates may also initiate the relocation by themselves,
so called self-initiated expatriates [Harzing, 2001]. There are several
reasons and advantages of their utilization. Besides the role during
entering into new markets, transferring know-how and job
competences of the company since they are cognizant of aims,
policies and practices of headquarters, expatriate operates as a
deputy to the central office in terms of direct control, establishing
contacts, communication networks between headquarters and
subsidiary, simplification of mergers and acquisitions. A lack of
home professionals with experience of doing business in West way
caused a dominance of expatriates in the Czech Republic especially
in the time of economics’ transformation in the first half of 90s
[
Dvořáková et al., 2012].
Regiocentric attitude to the human resource management is oriented
on hiring a person from the third country that is considered to be the
best professional for the position. The term “the third country”
means that employee is not from headquarters’ country nor from
country where he is going to work so they can utilize the perspective
of a foreigner [Harzing and Pinnington, 2014]. Their hiring is
usually less costly and assimilation is easier because TCNs
commonly come from the same region where a subsidiary is
allocated therefore these people are aware of local cultural customs
and business manners. Adaptability and willingness to global
mobility is their big asset [Schniederjans, 1998]. TCNs are possible
named as international managers and they often create multicultural
teams that prove that company aims to operate in global scale with
competent and skilled professionals.
During decision making about TCNs’ positioning, it is necessary to
consider bad acceptance of certain nationality as a company’s
representation in a specific social system. It may be for instance an
unacceptability of women on some job positions, in Japanese social
system or from the reason of still existing religious gender
prejudices in Arabic world, or historical enmity between some
national groups [
Dvořáková et al., 2012].
Another option of staffing in international environment is called
inpatriation. This term describes an alternative form of international
assignment when people from subsidiaries (HCNs) or TCNs are
transferred into the home country of MNC for some period of time.
While working at headquarters, inpatriates socialize with the firm’s
aims, norms, organizational culture and they develop a network
between headquarters and subsidiary that facilitates the cooperation.
Since they are already familiarized with the host country
environment, they are able to understand the complex situations
easily [Harzing and Pinnington, 2014]. Benefits from inpatriation
are not only creations of link between headquarters and subsidiary
and facilitation of the knowledge transfer in both directions but also
gaining invaluable multicultural perspective. In order to compare
them to expatriates, inpatriates need to adjust to the culture of
10