Ethnocentric, Geocentric, and Polycentric

In: Business and Management

Submitted By sean007
Words 637
Pages 3
The ethnocentric model is one which a business feels and acts as though it is superior to other countries, both in its culture and products or services (Business, 2012). With this approach the domestic market sets the standard for pricing and marketing. With this concept a firm will not change how it prices or markets its products. A company does save resources by not studying the foreign market; however they may lose any competitive advantage that could have been gained through the knowledge of the foreign market (Keegan & Green, 2011). Often times a firm may seek identical verticals in foreign markets to help minimize this competitive disadvantage. The ethnocentric model captures the domestic market more so than foreign markets for firms.
The geocentric model is what I would consider, the most open minded approach. The world is viewed as one large market place with many firms having a world headquarters that does not represent one culture or country (Keegan & Green, 2011). This model promotes diversity through global integration of capital resources (Perlmutter, 2009). Each foreign market it studied and the product or service prices are changed based on the local climate of the foreign market.
Polycentrism is the belief that each country a firm has presence in operates independently from one another. This allows a company to have subsidiaries in foreign markets that can independently meet the needs of foreign consumers in each market. This method uses more capital resources then ethnocentrism but also could create more revenue for a firm since foreign consumers may consider the subsidiary part of their country and its culture (Keegan & Green, 2011). The polycentric model’s revenue stream in looked at as being independent throughout the various foreign markets.
The method a company markets a product or service will influence which model best suits…...

Similar Documents

Ihrm

... not only select people with skills, but also employees who can mix with the organisations' culture. General Electric, for example, is not just hiring people who have skills required to perform particular jobs, it wants to hire employees whose style, beliefs, and value system are consentient with those of the firm.             Corporate culture and management philosophy, to a great extent decide the formulation and implementation of corporate and operational strategies and their evolution into various stages of internationalization. Companies involved in world trade and investment can be divided into four types based on their management approach and corporate philosophy: • Ethnocentric • Polycentric • Regiocentric • Geocentric Assume a FMCG company named XYZ ltd entering in India is starting the Staffing for Indian operations. In the early stage of international business , as per ETHNOCENTRIC approach all key management positions are held by parent country nationals, e.g., Toyota, Matsushita, Samsung etc. This is because firms at that stage are concerned with transplanting a part well in their home country. Ethnocentric corporations believe that home country nationals are more intelligent, reliable and trust worthy than foreign nationals. Firms such as Procter and Gamble, Philips, and Matsushita originally followed the ethnocentric approach.             In this approach, all important positions in MNCs are filled up by PCNs in the early stages of...

Words: 911 - Pages: 4

Ethnocentric, Geocentric, and Polycentric

... capital resources then ethnocentrism but also could create more revenue for a firm since foreign consumers may consider the subsidiary part of their country and its culture (Keegan & Green, 2011). The polycentric model’s revenue stream in looked at as being independent throughout the various foreign markets. The method a company markets a product or service will influence which model best suits the firm. The marketing for an ethnocentric firm is simply an extension of what the firm is doing in their domestic market except they are exporting to foreign markets as well. The polycentric model’s marketing strategy is to adapt to local competition and consumer’s needs in the foreign market. This method also helps the polycentric firms grasp the local market share. The geocentric marketing model creates its own marketing strategy by recognizing the similarities and differences in markets and uses those similarities to market its products (Nations, 2012). The cultural differences of the host country will have an impact on which model suits a firm best. If a company wishes to do business in foreign countries then having a strong understanding of the culture is needed because the culture will affect how the consumer views the product or service. This is the weakest link in the ethnocentric model and is virtually non-existent. For the final project I would suggest the polycentric model. With the EduTot product it would not be possible to unify the market places since......

Words: 637 - Pages: 3

College Essay

...3) Tom Bonkenburg – He is more of a geocentric manager. Even though he seems surprised at the Russian’s unhappy look at first, he soon understood the Russian culture when his Russian counterpart sent him the thank you email, and accepted that as part of the Russian work culture. He also mentioned about “He was working as hard to impress me as I was to impress him” shows he accepts the different cultures George Ajjan – He is more of an ethnocentric manager. He chose to use his more direct tone when writing the letter even though he was in another country’s culture. However, the fact he chose to get a local to proofread his letter shows his attempt to adapt to local culture, even though it is unclear in the passage on whether he took up the local’s advice to change his tone. Ron Gonen – He is more of a polycentric manager. As he was in Britain, he felt that he should follow the British English, hence he feels that the local way is better when he is in their country. G gfgf f f f f d dijd o d do do do do do dodo do dod do dodo do dod od do do do do dod od od od od do do do do do do do do do do do do do do do do dod od od od od od od do do do do do do do do do od od od od od d do do do do od odod ...

Words: 257 - Pages: 2

International Business

..., ethnocentric, and geocentric approach to international management? What key factors should a firm consider before adopting one of these approaches? Answer: Polycentric approach to international management is the policy involved hiring and promoting employees who are citizens of the country that host and operates the company. Ethnocentric approach is best used when teams from a certain home country are sent to a new location to help direct and assist due to their experience. Geocentric staffing approach is used when companies implement a transnational orientation. A firm should take into consideration one, the immigration policy and whether or not they are able to recruit from certain countries, two, if the area they wish to be located in has workers who are capable for the job. ...

Words: 350 - Pages: 2

International Managment

... comes to doing things in other cultures, ethnocentric, polycentric, Regiocentric, and geocentric. A company with an ethnocentric predisposition allows the values and the interests of the original company to guide the strategic decisions. Polycentric predisposition makes decisions that are tailored to suit the culture of the countries where the MNC is located. Regiocentric leads a firm to try to blend its own interests with those of a regional basis, and finally geocentric tries to integrate a global systems approach to decision making. In order for Tata and Geely to do business in other global areas they would need to take on the polycentric approach simply because it’s more adapting than the other options. When it comes to the technology of the polycentric profile it is batch production, and in the marketing sense they develop the product that is more related to the local area’s needs. They also want people of local nationality for key positions in their own country. With this one you change your management style and interaction based on the country. If they were to need to choose a different one they should chose...

Words: 452 - Pages: 2

Ethnocentric Cospicuous Consumption

...C.A.H. Discussion Questions SOC/105 May 1, 2012 Alfred Jones Discussion Questions 1. What is ethnocentrism? Are ethnocentric values reflected in mass media? If so, provide examples. If not, why not? Ethnocentrism is defined as “the belief in the inherent superiority of one’s own ethnic group or culture.” I think this is just a fancy word used for playing up people’s prejudice and discrimination. Whenever there is a case of someone or group of people that believe that they are better than another for any given reason, an unjust bias comes into play. Many forms of mass media display ethnocentrism in their marketing tactics, whether it is hidden or in full view for the naked eye to see, it’s there! Ethnocentrism can be concealed from the unsuspecting consumer so well that, unless being instructed to dissect the intent of the product/ good at hand, people may be gladly accepting a slap in the face with a smile. An example of how ethnocentrism is reflected in mass media is the use of bill boards: where they are displayed, and who and what’s displayed on them. In urban communities, where the majority of the residents tend to be middle/ low class citizens, there are bill boards advertising the sale of liquor using faces of well- known celebrities to endorse the products. At just about every free-way exit, there are advertisements for casinos, drug help numbers and locations, and other displays targeting a certain class of people. When commuting through...

Words: 1119 - Pages: 5

Chapter 2

.... Business picks up the flexibility and willingness to change on cultures swiftly and act accordingly. What is the difference between, a polycentric, ethnocentric, and geocentric approach to international management? What key factors should a firm consider before adopting one of these approaches? Polycentric approach to international management is the policy involved hiring and promoting employees who are citizens of the country that host and operates the company. The polycentric approach is best used in order to maintain low hiring costs. Communication is easier and companies run smoother due to the fact the employees are all related in their geographic location. Ethnocentric approach is a staffing policy that is used in companies that has primarily international strategic orientation. While polycentric maintains employees from the same area, ethnocentric is generally adopted by headquarters by sending employees from the home or parent countries to the host country. Ethnocentric approach is best used when teams from a certain home country are sent to a new location to help direct and assist due to their experience. Geocentric staffing approach is used when companies implement a transnational orientation. In such an approach, rather than maintaining the same groups of people or transferring people, employees are selected regardless where they come from. The geocentric approach recruits the best of the best; this approach is consisting with building a strong unifying......

Words: 552 - Pages: 3

International and Domestic Human Resource Management

... issues or risks that involve external factors, non-performing employees, diplomatic ties, and exchange rates. According to Dowling, & Welch (1991), other factors that make IHRM different include the need for broader perspectives, involvement with employee’s personal lives, and changes in PCNs and HCNs population (p. 62). Dowling, & Welch (1991) also state that multinational organizations have 5 staffing strategy options; they include ethnocentric, polycentric, geocentric, mixed, and ad hoc or patchwork. The first strategy option is ethnocentric; it encompasses the most critical positions in the company held by PCNs. Second, polycentric, it encompasses recruiting HCNs as managers of subsidiaries in their own country. The third option is geocentric; it encompasses the most suitable employees to obtain the critical jobs within the company - no matter nationality. On the other hand, the fourth option, mixed, encompasses a regiocentric approach; while the fifth approach, patchwork (ad hoc) encompasses the policies rule the organization which appears to be an extension of the DHRM’s policy (p. 63). Domestic Human Resource Management (DHRM) works within national borders; while the regulations and rules are the same, there is more emphasis on job opportunities, schooling, training, and families. DHRM is a broader side of HR that covers three key areas of the business: work (production), employment (recruitment), and industrial (collective bargaining) relations (Kiessling...

Words: 579 - Pages: 3

Corporate Strategy

... Monsanto’s sustainability strategy have been back in 1995? What should Monsanto have done to implement this strategy during the first 5 years? Strategic dissonance Burgelman and Grove, 1996 The Many Faces of Shareholder Value Building Tomorrow’s Opportunity New Skills Nurturning Internal Capabilities Growth Path Repositioning Trajectory Engaging External Constituencies Cost & Reputation Risk Reduction Legitimacy Managing Today’s Business Social and Financial Performance A Multiple Bottom-Line Perspective Strategy-making process Complexity and MNE legitimacy Environmental complexity • Regulatory/cognitive/normative domains • Number and variety in countries • Institional distance Organizational complexity • External and internal legitimacy • Geocentric/polycentric/ethnocentric orientation Complexity of legitimation process • • • • • Liability of foreigness Visibility and size of MNE Legitimacy of local firms Legitimacy of other parts of MNE Legitimacy of classes of organisations Kostova and Zaheer, 1999 ...

Words: 319 - Pages: 2

Global Staffing

... Global Staffing Author: Thomas Gasuku Email: gasukuthom@gmail.com Introduction Global organizations with subsidiaries in different countries have unique staffing choices depending on the prevailing situation (Ryan, & Tippins, 2009). Often, professional who manage and guide human resource in these global organizations consider basic factors before choosing a specific staffing option. MNCs have three staffing options: ethnocentric, global and polycentric staffing model. Notably, MNC wants to open a branch in South America (like Brazil), and it is looking forward to choosing criteria of staffing their subsidiary (Stahl, Björkman, & Morris, 2012). From a distance, many countries in South America are developing countries and hence possess small economies. Therefore, the application of ethnocentric or polycentric staffing will not be appropriate. This paper chooses and supports a global model of staffing as the best staffing option that will see the subsidiary to higher levels. This essay seeks to show how the global model can be appropriate for the subsidiary that specializes in the production of automobile parts. Global model (Geocentric staffing model) Unlike ethnocentric and polycentric which focus on hiring employees from either host country or from the subsidiary location; global model focuses on hiring employees who have the required skills irrespective of their home country. Notably, this company deals with the manufacturing of Automobile parts (Ryan, &...

Words: 728 - Pages: 3

Internationalization Process

...In the article form the executive’s extend there are two hypothesis that describes an interest for a multinational company, first that there is a long term viability of a multinational company, and second is that these MNC contribute positively on a region’s growth in terms of the constructive impact. Basically there are three mind set in the executive’s mind while building the MNC, the first is ethnocentric (E ) (where they believe that the executives should be from home country), the another is polycentric (P) (where the company appoints local foreigners as the company believes that they can understand the market better as they are locals), and the third is geocentric (G) (world-oriented where the executive seek the best talent and treats everyone equally). Mostly, R&D turns out to be ethnocentric, Marketing is polycentric, and the company adopts the EPG mix as per the requirement. Now a days, most of the firms senior executive practice the geocentric as they want to promote the best deserving person irrespective of their nationality or any other factor. One of the obstacle in this is from political and economic issues from the local country. Ethnocentric payoff are for the short term as there is faster communication, transparency and local knowledge. But when Ethnocentric is practiced for the global market, there can be a gap to understand the foreign market. While the geocentric accounts most of its cost for communications and travel expenses. The IBM World......

Words: 299 - Pages: 2

International Marketing

...5 Stages in the Evolution of Global Marketing: 1. Domestic Marketing: Ethnocentric orientation. 2 Export Marketing: Ethnocentric orientation. 3. International Marketing: Polycentric orientation 4. Multinational Marketing: Regiocentric orientation 5. Global Marketing: Geocentric orientation Domestic marketing: A company marketing only within its national boundaries only has to consider domestic competition. Even if that competition includes companies from foreign markets, it still only has to focus on the competition that exists in its home market. Export marketing: Generally, companies began exporting Indirect Entry means turning over international sales to a third party. Generally speaking, this third party does the exporting for you. Indirect entry can also include licensing deals as well. By utilizing indirect exporting, a company could use the services of an Export Management Company, distributors, or commissioned agents or brokers. Direct Entry you are dealing with a company in the foreign market, so it can be the end-user, retailer, distributor, or export management company in that market. Because the manufacturer is more involved, the manufacturer makes decisions about the entire export process - from market and distribution, sales fulfillment, and payment. International marketing: If the exporting departments are becoming successful but the costs of doing business from headquarters plus time differences, language barriers...

Words: 654 - Pages: 3

Connection, Value, and Growth: How Employees with Different National Identities Experience a Geocentric Organizational Culture of a Global Corporation

... geocentric dimension appears to be increasing, while the ethnocentric dimension is decreasing in U.S.-based MNCs. This trend is noted by comparing Heenan’s (1972) and Washington’s (2001) examinations of the internationality of HRM practices in U.S.-based MNCs. Heenan (1972), who surveyed the managers and executives of three U.S.-based MNCs, found low levels of internationality (38% ethnocentric, 34% polycentric, 8% regiocentric, and 20% geocentric). But Washington (2001), who surveyed a larger sample of managers and executives of 11 U.S.based MNCs, found lower levels of ethnocentrism (25.75%) and polycentrism (22.46%) and higher levels of regiocentrism (22.46%) and geocentrism (27.2%) than did Heenan. While neither Washington’s (2001) nor Heenan’s (1972) findings support Jacoby’s (1970) prediction regarding the dominance of the geocentric dimension, they do offer some insights into the changing nature of business in U.S.-based MNCs, possibly headed toward a more global paradigm. By comparison to other approaches to assessment of organizational internationality, Taggart (1998) argued that Perlmutter’s (1969, 1985) approach is the most useful when a corporation operates in many countries. Taggart (1998) noted the approach can “act as a lubricant at the various strategy and control interfaces within the MNC … by increasing corporate management’s sensitivity to critical aspects of national and company culture… [and identifying] many location-specific......

Words: 10166 - Pages: 41

International Human Resource Management

...Global Human Resource Management Group # xx Strategic Role of International HRM and Staffing Policy Nusrat Jahan Khan ID # 2015 291 014 Global Human Resource Management Strategic Role of International HRM  HRM function through its staffing, training, compensation, and performance appraisal activities has critical impact on the people, culture, incentive and control system elements of the firm’s organizational architecture. Global Human Resource Management Staffing Policy  Selection of employees who have the skills required to perform a particular job  Tool for developing and promoting the desired corporate culture of the firm, i.e. norms and value systems of the firm  It is believed that if employees’ personality types are matched to corporate culture, the firm will be able to attain higher performance Global Human Resource Management Approaches to Staffing Policy  Three main approaches to staffing policy:  Ethnocentric staffing policy  Polycentric staffing policy  Geocentric staffing policy Global Human Resource Management Ethnocentric Staffing Policy  All key management positions are filled with parent company nationals  Rationales:  Host countries (especially LDCs) may lack qualified individuals to fill senior management positions  Best way to maintain a unified corporate culture across the world   Applicable when a firm places a high value on its corporate culture Transferring core competencies to foreign operations...

Words: 576 - Pages: 3

Geocentric

...In astronomy, the geocentric model (also known as geocentrism, or the Ptolemaic system) is a superseded description of the universe, where the Earth is at the center of all the celestial bodies. This model served as the predominant cosmological system in many ancient civilizations such as ancient Greece including the noteworthy systems of Aristotle (see Aristotelian physics) and Ptolemy. As such, they believed that the Sun, Moon, stars, and naked eye planets circled Earth.[1] Two commonly made observations supported the idea that Earth was the center of the Universe. The stars, the sun, and planets appear to revolve around Earth each day, making Earth the center of that system. The stars were thought to be on a celestial sphere, with the earth at its center, that rotated each day, using a line through the north and south pole as an axis. The stars closest to the equator appeared to rise and fall the greatest distance, but each star circled back to its rising point each day.[2] The second observation supporting the geocentric model was that the Earth does not seem to move from the perspective of an Earth-bound observer, and that it is solid, stable, and unmoving. Ancient Greek, ancient Roman and medieval philosophers usually combined the geocentric model with a spherical Earth. It is not the same as the older flat Earth model implied in some mythology.[n 1][n 2][5] The ancient Jewish Babylonian uranography pictured a flat Earth with a dome-shaped rigid canopy named......

Words: 307 - Pages: 2