The staffing policy that would be used by the company would be the geocentric approach the company will interview and assess all the candidates form the international market regardless of their location and hire them on the basis of their performance, experience, professionalism as well as their interests. The company will however prefer to hire German top management for the operations in Germany but this is not a requirement.
While this reduces the communication between headquarters and the subsidiary and increases control by the headquarters, this policy has serious disadvantages. The cultural differences & environmental differences will be huge and expatriates may not be able to cope up with. Thus resulting in costly management mistakes. Examples are Korean MNC’s Hyundai, Samsung , Indian MNC’s TCS, Infosys, Wipro. US MNC’s GE, Citi corp, Exxon.
Appoint a host country executive along with a home country executive to support or vice-versa (polycentric approach) This increments the problems associated with the ethnocentric approach while reaps the benefit of local country management. E.g.: US MNC’s P&G, Pepsi, Coca cola. Indian MNCs Ranbaxy. Appoint the best person for the job irrespective of the nationality (Meritocracy approach) This again suffers from problems similar to that of ethnocentric approach. E.g.: Nestle, Unilever, HP, Nortel.” (Kottolli)