There are four primary approaches that multinational companies use in staffing decisions, including ethnocentric, polycentric, geocentric, and regiocentric approaches.
The ethnocentric staffing approach heavily focuses on the norms and practices of the parent company where upper management positions are typically held by corporate personnel from the home country. These managers are considered parent company nationals, or PCNs. Japanese and Korean firms follow this approach quite often.
The polycentric staffing approach heavily focuses on the norms and practices of the host company where upper management positions are typically held by corporate personnel from the local country. These managers are considered host country nationals, or HCNs. European firms often follow this approach.
The geocentric staffing approach does not focus on one nationality over the other. Instead, upper level management positions are held by the most qualified employees selected form a global pool of candidates. These managers are considered third country nationals, or TCNs The most qualified candidates are selected, but no single nationality is stressed.
The regiocentric staffing approach, a more recently identified approach, is where upper level management positions are held by employees from a particular region (North American region, European Region, Asian region, etc.). This approach is similar to the polycentric approach, but it reflects a specific region rather than a specific country. For instance, a U.S. company in Mexico may consider hiring an employee from Canada to fill a management role.
The ethnocentric staffing approach heavily focuses on the norms and practices of the parent company where upper management positions are typically held by corporate personnel from the home country. These managers are considered parent company nationals, or PCNs. Japanese and Korean firms follow this approach quite often.
The polycentric staffing approach heavily focuses on the norms and practices of the host company where upper management positions are typically held by corporate personnel from the local country. These managers are considered host country nationals, or HCNs. European firms often follow this approach.
The geocentric staffing approach does not focus on one nationality over the other. Instead, upper level management positions are held by the most qualified employees selected form a global pool of candidates. These managers are considered third country nationals, or TCNs The most qualified candidates are selected, but no single nationality is stressed.
The regiocentric staffing approach, a more recently identified approach, is where upper level management positions are held by employees from a particular region (North American region, European Region, Asian region, etc.). This approach is similar to the polycentric approach, but it reflects a specific region rather than a specific country. For instance, a U.S. company in Mexico may consider hiring an employee from Canada to fill a management role.
The chart below shows the various advantages and disadvantages of PCNs, HCNs, and TCNs: