 We are discussing the various approaches to staffing international operations and in this topic we are going to discuss these approach, which is called the polycentric approach Polycentric approach is in contrast with the ethnocentric approach Ethnocentric approach, which means giving priority to your own ethnicity Polycentric approach means giving priority to different ethnicities ethnicities So poly means multiple multiple Ethnicities being preferred in your organization. That is the basic spirit of the polycentric approach So in a polycentric approach what happens is that the multinational organization it treats its subsidiaries as separate units so they give them a distinct national entity and That leads to some kind of decision-making autonomy so the subsidiary which is managing Operating in a foreign country will be given its own distinct national entity and its own autonomy for decision-making and for that Applied to the human resource aspects and particularly to staffing would mean that the subsidiaries are usually managed by local Nationals so host country nationals will be managing a subsidiary in the polycentric approach and What happens is then then they are seldom Promoted to the headquarters positions So for example if a subsidiary for example McDonald's or Coca-Cola is operating in Pakistan The and it has got a polycentric approach the management of Pakistani Division would be managed by Pakistanis themselves But these Pakistanis they if it will not be Promoted to headquarters positions. So if for example McDonald is an American organization You will probably not ever hear that people from McDonald's Pakistan have been promoted to a place in the headquarters In America's so that is a polycentric approach in which host country nationals They are given autonomy and decision-making in their particular own subsidiary But they are not usually promoted to positions in the headquarters So their career is basically limited up to the home subsidiary up to the subsidiary which is working in their particular nationality and as similarly parent country nationals are Rarely transferred to the foreign subsidiary operations So you wouldn't be hearing that there are there is a foreign manager in McDonald's or you wouldn't be hearing that there's a foreign manager in In Coca-Cola most of the operations and decision-making positions are held by Pakistani nationals and They are not operated by people from the parent country organizations What are the reasons for employing host country nationals? One of the reasons is that it eliminates the language barrier so in order to operate in a foreign country you need to know their language and If you appoint people from that same country the language barrier is eliminated It avoids the adjustment problem of expatriate managers and their families So if you won't be sending people from the parent company parent country to the host country it means that the problem of managing expatriates will be totally eliminated and It also removes the need for expensive cultural awareness training programs So if you don't appoint people to to the to your foreign operations You know you don't need to do that cultural awareness training program So you can save your costs on on that particular thing so the reasons to appoint home country national host country nationals is That you can save all these costs of cultural training. You can save the cost of Language learning you can save the cost of expatriate management and their adjustment And if their families are also coming you need to adjust them And then you need to take care of various different aspects of their housing and education and entertainment Security and you can save all these costs on that What could be the disadvantages of a polycentric approach? Bridging the gap between home country nationals subsidiary managers and parent country National managers at the headquarters is something which is difficult. So there would be a kind of fragmented approach Your headquarters would be managed by people from a different culture and your subsidiary would be managed by people from the host country So there could be lack of coordination between them. So it is difficult to make them coherently and Properly aligned with each other because they differ from the different for they differ on the basis of culture and management styles and therefore this Alignment would be difficult This could lead to language barriers Conflicting national loyalties and a range of cultural issues may isolate Headquarter staff from the subsidiaries. So if you're not sending headquarter staff to work in the host country Definitely, they won't be learning their language. They won't be learning about their culture So they would be sitting at a distance with a language barrier, which may lead to And then they would not be understanding that what kind of national loyalties do people have from the host country? And that could lead to various different kind of clashes. So a polycentric approach may lead to these kind of conflicts So the result is that the multinational enterprise could become a federation of independent national units with nominal links to the headquarters so it becomes and it's not basically a multinational enterprise as an oh as a single entity it becomes a federation federation means that various different blocks which are loosely connected with each other, but they do not work as a single wholesome entity that is Okay, if the operations are managed properly for example If the operations do not involve a lot of complexity if the operations do not involve a lot of innovation For example Coca Cola is managed quite well as a federation because what do they have to do? They have to make these beverages which does not involve a lot of innovation does not involve a lot of rapid change in technology Kind of basic simple operations which just need distilling water and then adding some flavor to that and then bottling it up So it is something which is pretty simple and which does not need a lot of coordination and control from the from the parent country nationals So that can be managed as a federation but in an organization which is Which requires all these things a polycentric approach may lead to different kind of disadvantages Then another disadvantage is that the home country nationals they have limited opportunities of growth Because they are not going to be promoted to the headquarters. So that means that country head is the is the top most position for a person who is Working in a subsidiary of a host of an organization which is managed through polycentric approach and Then as headquarters positions are held only by parent country nationals The limit the senior management group that has a limited exposure to the international operations because they don't send People from the parent country to the host countries Don't keep the senior manager who had quarters in a bet he via Exposure, no time international operations and that constrains decision-making and resource allocation It might constrain decision-making and resource allocation. So these are the possible disadvantages of a polycentric approach