The staffing of the proper people at all levels of the management for a company which is expanding into a new market is very important, however it is more important for the company to provide special attention to the staffing policies pertaining to managing the recruitment and staffing of people at the top management. This is because this management tends to identify and define the strategies of the companies as well as provide the objectives and the goals for the business and the channels and ways through which they can be achieves.
When a company is conducting business in a different country or environment and decides to expand in the international market through the acquisition strategy the company has three main options pertaining to staffing its top management. These options pertain to the ethnocentric approach, the polycentric approach as well as the geocentric approach.
The ethnocentric approach involves hiring the top management from the home country and then relocating them to the host country. The polycentric approach involves hiring the top management from the host country only while the geocentric approach tends to hire the best person for the job regardless of where the person is located. The common staffing practices that are undertaken by most of the established countries pertain to “Appoint home country nationals to lead the foreign subsidiary. (Ethnocentric approach) This is more common in the early stages of internationalization. (Many Indian companies are in this stage) The objective is to establish the parent company’s corporate culture in the subsidiary.