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Strategic Management is essential in a business to take advantage of the global resources and the market. Strategic Management refers to the approaches that managers employ in running a company and that are derived from the firm’s vision and objectives . Global multinational enterprises (MNE) have employees spread across the globe, and it is the duty of the international human resource management (IHRM) to simplify employing skilled, high-performers to enable supportable, and modest advantage throughout the global marketplace. To meet these requirements, the MNE considers approaches to staffing international firms, either by using ethnocentric, poly-centric, geo-centric, or region-centric staffing options .
I believe that the geocentric approach works better in situations as this approach finds the best performers for the main jobs globally in the organization, irrespective of their nationality. However, MNE’s with geocentric approach policy may prefer third-country nationals (TCN’s) as they have high familiarity with various types of compensation and benefit practices . The important philosophy of a global corporation must be to see a high-performer for the job, regardless of the nationality. A geocentric approach is usually suitable for firms focusing on an international or transcontinental strategy.
This approach would normally work as the complete globe is viewed as a potential market, and the approach makes every effort to develop integrated world business strategy. Geocentric approach is realistic when the skilled managers are very flexible to various situations in their earlier projects and such people are available in the headquarters, and also in subsidiaries. The use of local people increases cultural diversity, and multinational staff composition at the parent company, thereby raising a geocentric approach .
References
Briscoe, D., Schuler, R., & Tarique, I. (2012). International Human Resource Management, 4E: Policies and Practices for Multinational Enterprises (4, Revised ed.). Taylor & Francis.
Harzing, A.-W., & Pinnington, A. (2010). International Human Resource Management. SAGE.
