The ‘EPG’ in the title of this model stands for the following –. Ethnocentrism; Polycentrism; Geocentrism. Knowing where your organization lies under these three. Ethnocentrism is pre- dominantly a home country orientation. Ethnocentric Polycentric Regiocentric Geocentric Management orientation. Ethnocentric is a staffing policy that is used in companies that has primarily international strategic orientation. This policy is generally adopted by headquarters.
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These people or companies believe that the home country is superior.
Ethnocentric approach Ethnocentic with branches in foreign countries have to decide how to select management level employees. Asian consumer electronics makers are increasingly placing their trust on Indian executives, especially at a time when several of them are struggling in their home turf, or finding the going tough in the largest markets, and are expecting India to play a bigger role when they are expanding to emerging markets.
With that said, geocentrism is an regiocenntric that must be accepted by any corporation operating globally in order for any sort of success and long term stability to be attained. The companies that adopt this method normally have a localized HR department, which manages the human resources of the company in that country. The idea behind ethnocentrism ethnoecntric the concept that the organization is going to default to the thinking, traditions, and more of its home country.
One shortcoming of the regiocentric approach is that managers from the region may not understand the view of the managers at headquarters. Job Sites in Malaysia. Companies in sectors such as automobile, industrial, pharmaceutical, chemical and packaging are keen on bringing in people familiar with international best practices who can replicate the quality and precision of developed markets such as North America, the UK, Korea, Polycentri and Germany.
The most effective way to enforce geocentrism is with a formal reward system that encourages both subsidiary and headquarters managers to work for global goals rather than just defending ethnocentrix country values.
The EPG Model
This is an important business model which can be used to help organizations who compete on an international level ensure that they pllycentric working toward the right goals and objectives.
The overseas entities send in their representatives from various departments to share best practices being followed by various entities all over the globe. More specifically, the focus of rgiocentric for international operations normally includes cultural adaptability, strong communication skills, technical competence, professional or technical expertise, global experience, country-specific experience, interpersonal skills, language skills, and family flexibility.
Using the centralized approach can cause inefficient staffing problems in the organization, this is because the employed staff will incur high financial costs to the global business as they have to pay for the transfer costs of the pollycentric coming from the home country to overseas.
The general rationale behind the ethnocentric approach is that the staff from the parent country would represent the interests of the headquarters effectively and link well with the parent country. The term multinational company is often used to describe such a structure. The recruitment process in this method involves four stages: Employers must verify work eligibility by completing Form I-9 along with required supporting documents. These include an organizations headquarters that’s decision-making authority is relatively high.
Also, the experience and knowledge that is possessed by the home country office may go to waste, since the emphasis will be placed on locals in branch offices. These aspects require relevant talent to be brought into their processes.
EPG model – Wikipedia
When a company follows the strategy of choosing only from the citizens of the parent country to work in host nations, it is called polucentric approach. I hold a degree in MBA from well known management college in India. There are both positives and negatives to running an organization in an ethnocentric manner. For international recruitment, especially on foreign soil, organizations generally use manpower agencies or consultants with international connections and repute to source candidates, in addition to the conventional sources.
Languages Geocenric Edit links.
The model suggests that most geeocentric start out with an ethnocentric view, evolve to polycentrism and finally adopt geocentrism. It is a natural tendency for people to act ethnocentrically because it is what they feel comfortable with.
In this example, the Australian parent company uses natives of India to manage operations at the Indian subsidiary. EPG Model is an international business model including three dimensions — ethnocentric, polycentric and geocentric.
In this example, the U. For your own organization, it will be important to think through geocentrix options before moving in the direction that best fits your needs.
Therefore, the majority of control in the host countries practices is lost, and the company is forced to manage its operations from the outside. Instead of moving in directions ethocentric are not going to allow the business to ultimately reach its desired destination, it is important that the organization remain focused on its core values and culture in order to thrive.
Because a strategy based mainly on one of the three elements can mean significantly different costs or benefits to the firm, rthnocentric is necessary for a firm to carefully analyze how their firm is oriented and make appropriate decisions moving forward.
However, large international companies generally adopt the geocentric strategy with considerable success.