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.: . . .:·.- .... · < :_.·:_:_ tic, niatket,. gaini�g m:ore sales/pi;ofits and '. rtlairttain . good·. co:mtnunicatio':n liiiks There are growing numbers of Indo- expfoiirigJhe ndv 'markets, Whatever the With corporate headqillltets, and ti}¢ : nesillll c:om:panies going out of do111estic .. ·· reasons, are; since management• practices · . need. to ·. gi.ye . PQN s .intei:'rra fron{il .·• .· and �wen 'regional markits to global mar• aJ'e subje(;t fo envir9Illlleiltal cliaµges, gfo- ' •....-k�t. Mqst of.ili�tn. are rei�ol).ably)eeking . bal op�ratioµs mancfate giffer¢htn:ianage- ·· .•. . out form�re sales andloi pig ii is: :riie in� ·.• rneiit pr�ctic�s The managetnertt'of �gl� , · · · · .·:;,�·t:g�:i:i'U;0�:1o:1J t!�,,:�t��y .. �:�� · .. 'busihesse's,: and that mandates.' different, ' appropriate strategies to. acct,IIioda.te tb,ema�a'gement- practic�f th�n: 'there ate,

' ' staffing pia�tice\foJei �ti globalbµsiiiess . e.nvironm�nt .• that irt;ludes the fdctis, ·.ob- ' ' ..•. · '.j�cti�e, alterriative'appttiach��;�n�ffictors. ·, ' need to be considered wheri"decidilig �hich· approach is· more apptciptiat� th*1, , others. It willalso)fostribe 4w citl.i¢rtqp.:: 'ics ·. which are clqsely related, to' �taffing> 'practic� such asjritematicinal tr@'sfer and •career system. Atthe'.e11d. par:t: oftht, at�.· tic;l�, there willbe a prqposalfoi: cleyel<:>p­. i!}g a glolJal staffing strategy: as.well lis,qne·. gk>bal staffing ptactke's:case·sfiitlf9f u.s:-baseciColllpaily •.... · .... , • · .. , .. .. i2., Tue poly�entric approach.:J'fti$ 11p< ' . . No'wad�ys, moi:e ariq µrore.liidqn:esfan ' proilch' staffs subsidiaries \Vith HCN§ ' �!$J;�;!��i�a ,.···.· .

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eliminates language barriers, avoids the adjustment problems of PCNs and their families, and removes the expensive cost of maintaining PCNs. Second, employment ofHCNs aUows an MNC to take a lower profile in sensitive political situations, and looks more favorable by host-country gov­ernment. Third, the polycentric ap­proach may help to satisfy the rising ambitions and expectations of many HCNs. Last, HCNs are more accept­able by host-country people.

The polycentric approach has its own disadvantages as well. Perhaps the major disadvantage is that of bridging the gap between HCNs at national subsidiaries and PCNs at corporate headquarters. Language barriers, conflicting national loyalties, and a range of cultural differences may isolate· corporate headquarters from the various foreign _subsidiaries. The second major disadvantage concerns with the career paths of HCNs and PCNs. HCNs have limited opportuni­ties to gain experience outside their own countries and cannot progress beyond the senior positions in their own subsidiaries. PCNs have also limited opportunities to gain overseas experience. Organizational compe­tence at running a global business can thus be seriously jeopardized.

3. The geocentric approach. This. ap­proach utilizes the best people for thekey jobs throughout the organization,regardless the nationaHty. The mainadvantage of the geocentric approachis providing an MNC a greater pool ofquality staffs who can be moved any­where in the world whenever needed.

As with other staffing apprpaches,there are disadvantages associatedwith the geocentric approach. First,there will be resistance from host­country governments which want theirpeople to be employed in MNCs. Thegovernments will utilize immigrationcontrol to force HCN employment ifenough people and adequate skills areavailable. Another disadvantage is the·geocentric can be expensive to imple­ment because of increased training,relocation, and administrative (forhuman resource planning) costs.

4. · The regiocentric approach. Thisapproach makes transfer of staffs fromcountry to country within the sameregion possible. There are two advan­tages of the regiocentric approach.

· First, it allows interaction betweenstaffs transferred to regional head­quarters from subsidiaries in the regionand PCNs posted to the regionalheadquarters. Second, the regiocentricapproach can be a way for an MNC togradually move from purely concentricor polycentric approach to geocentricapproach. The disadvantages of theregiocentric approach are it can pro­duce federalism at a regional level, andit does not make the possibility ofregional staffs to occupy positions atparent headquarters greater.

In deciding which staffing approach isthe most appropriate, an MNC needs to consider the environmental (country) fac­tors) and the characteristics of foreign sub­sidiary (Boyacigiller, 1995}; The environ­mental factors consist of: 1. The level of political risk In countries

where political risk is high, it isimportant to. have a local profile, thatis, to appear to act and look like a localfirm.

2. Cultural distance. When two cultures(PCN's or third country national's(TCN's)1 culture and HCN's culture)differ significantly, it is more difficultfor PCN s or TCN s and HCN s tocommunicate and work well together.

3. Competition. If the local competitionexists, an MNC should employ moreHCNs than PCNs or TCNs. The logicalexplanation for this is HCNs are morefamiliar with local competition andhave better contact with local govern­ment which plays important role inilocal competition.

4. Cost. It is quite expensive sendingPCNs or TCNs abroad. The totalcompensation for PCN or TCN can be2.5 times higher than HCN or PCNwho is employed at the headquarters.But, MNCs need to address the costissue· within a broader framework ofwhat the company seeks to gainthrough over�eas assignments. Theasssignments appear more useful whenperceived as long-term investment

cforum S'(_anajemen Wrasetiya S'\_ufya-�. 62, 1996

The most important characteristics of foreign subsidiary are: 1. Interdependence, Subsidiaries do not

operate as closed systems. Typically,the have resource links to other unitswithin the MNC as well as ties to firmsand custoµiers in host, home, and othercountries. This interdependence cre­ates important implications for staff­ing. If a subsidiary has a high level of

· interdependence with the headquar­ters, placing some PCNs in keypositions at that subsidiary facilitatesintraorganizational communicationand relations.

2. Complexity. Most MNCs are com­prised of units that differ widely intheir level of complexity. Controllingunits that have disparate levels ofcomplexity is difficult for MNCs.Complex tasks imply an increase ininformation load; information diver-

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sity, or rate of information change.Consequently, the amount of infor­mation processing necessary to controlcomplex operations is much greater

. · than the information processing re­quired to control less complex units. So; it is not surprising that PCNs and/ or TCNs are more preferable to be assigned to the complex units because they have more experience in main­taining the speed of information pro­cessing in such units. The low speed rate of information processing in one subsidiary may impede the informa­tion flow of the whole MNC's net­work.

3. Control. There are two types ofcontrol: direct or behavioral controland indirect or output control (Phatak,1989; Davis, 1994a). One importantdevice of direct control is staffing offoreign subsidiaries by PCNs. On theother hand, the indirect control mostlyrelies on the periodical reports submit­ted to the headquarters.

International Transfer

. Basically, the reasons for international transfer are filling out the positions when qualified HCNs are unavailable or diffi­cult to train, giving staffs international ex -perience and train them for future impor­tant tasks in subsidiaries abroad or with

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why Bonne Bell, Inc. adopts this model is because the competition in the cosmetic industry is very keen, and one key success factor to survive in that kind of environ­ment is the creativity. Bonne Bell, Inc. seems to realize that the baseball team model can heighten the. pressure for cre­ativity although it can also reduce the em­ployment security and the employees' commitment to the company. So far, the implementation of baseball team model has no s1gnificant negative effects for the company, and if such minor negative ef­fects exist, they will be written off by the increase of employees' creativity.

References

1. Borg, M. and A Harzing (1995). "Com­posing An International. Staff," in A.Harzing and J.V.· Ruysseveldt (Eds.),International Human Resourc.e Manage­ment. London, England: Sage Publicationsin association with the Open University ofthe Netherlands, pp. 179-204.

2. Boyacigiller, N.A. (1995). "The Inter­national Assignment Reconsidered," inM. Mendenhall and G. Oddou (Eds.).Readings and Cases in International

Human Resource Management (2nd ed.). Cincinnati, OH: Soiith-Western College Publishing, pp. 149-156.

3. Davis, T. (1994a). Lecture.: "Main Typesof Control," November 15. Cleveland, OH:Cleveland State University.

4. Davis, T. (1994b). Lecture: "Main Alter­native Approaches to Staffing," December06. Cleveland, OH: Cleveland StateUniversity.

5. Davis, T. (1994c ). Lecture: "SuccessFactors for International Assignments(Expatriates)," December 08. Cleveland,OH: Cleveland State University.

6. Dowling, P.J., R.S. Schuler and D.E. Welch(1994). International Dimensions ofHuman Resource Management (2nd ed.).Belmont, CA: Wadsworth PublishingCompany, Ch. 3.

7. Phatak,A.V. (1989). International Dimen­sions of Management (2nd ed.). Boston,MA: PWS-Kent Publishing Company, Ch.5-6.

8. Pucik, V. (1993) .. "Globalization andHilman Resource· ·Management," in V.Pucik, N.M. Tichy and CK. Barnett (Eds.),Globalizing Management: Creating andLeading the Competitive Organization.New York, NY: John Wiley & Sons, Inc.,pp. 61-81.

9. Sonnenfeld, J.A. and M.A. Peiperl (1984)."Career Systems and Strategic Staffing;"in J.J. Gabarro (Ed.), Managing Peopleand Organizations. Boston, MA: HarvardBusiness: School Publications, pp. 464-473.

10. Sonnenfeld, J.A. and M.A. Peiperl (1988)."Staffing Policy as A Strategic Response:A Typology of Career Systems," in F.K.Foulkes (Ed.), Human Resources Manage­ment: Readings. Engkwood Cliffs,· NJ:Prentice-Hall, Inc., pp. 67-79.

11. Tung, R.L. (1988). The New Expatriates:Managing Human Resources Abroad.Cambridge, MA: Ballinger PublishingCompany, Ch. 7.

Budi W. Soetjipto, SE, MBA adalah Staf Pengajar Fakultas Ekonomi Universitas Indonesia (FEW), Depok; Staf Lembaga Manajemen FEW, Jakarta;Mahasiswa

Program Doctor of Business Administra­tion (DBA) di Cleveland State Univer­

sity, Cleveland, Ohio, USA

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