A Business Encyclopedia

Polycentric Approach

Definition: The Polycentric Approach is the international recruitment method wherein the HR recruits the personnel for the international businesses.

In Polycentric Approach, the nationals of the host country are recruited for the managerial positions to carry out the operations of the subsidiary company. The rationale behind this approach is that the locals of the host country know their culture better and can run the business more efficiently as compared to their foreign counterparts.


Advantages of Polycentric Approach

  1. The difficulty in the adjustment of expatriates from the parent country gets eliminated.
  2. The hiring of locals or the nationals of the host country is comparatively less expensive.
  3. The morale of the local staff increases.
  4. Better productivity due to better knowledge about the host market.
  5. The career opportunities for the nationals of the host country increases.
  6. Better government support.
  7. Chances of success are high.

Disadvantages of Polycentric Approach

  1. Lack of coordination between the host and the parent company, due to the absence of a link that gets created when expatriates from the parent country hold the managerial positions at the subsidiary.
  2. The lack of effective communication between the staff members of both the host and the parent company, due to the language barrier.
  3. Difficult to exercise control over the subsidiary.
  4. Lack of knowledge about the market conditions of the host country.
  5. The conflict may arise between the managers of both the host and the parent company due to the different thinking processes.

In this approach, the natives of the host country are chosen to run the operations of the subsidiary and are given the authority to formulate strategies for the business keeping the mission and vision of the subsidiary company in mind. Whereas the parent country nationals hold key positions at the corporate headquarters and scrutinize the operations of the subsidiary from the home office.

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