The Geocentric Human Resource Policy

The geocentric approach to multinational operationshome country or of the host country; hence, these
reflects the attitude that the circumstances dictate theindividuals can bring more unbiased and potentially
best policies and the most appropriate individuals tonovel ideas and perspectives; (2) increased likelihood
staff the operations. The geocentric approach couldof acceptance by both home country and host
be placed somewhere in between the ethnocentriccountry employees; and (3) demonstration of the global
and the polycentric approaches, as it considers thatimage of the multinational corporation.
the best elements of each culture should be adoptedAn increasing number of corporations around the globe
in the design of human resource systems and theresort to appointing third-country nationals in key
most qualified individuals, irrespective of nationality,positions; a major reason for this is, as already seen,
should be employed in the key positions of athe need for the most competent individual to take
multinational enterprise. The geocentric approach isover important roles, and the fact that as organizations
allegedly the most advanced of the approaches tobecome global they gradually become dissociated with
human resource policy, and the one that is directed byparticular countries. Even Japanese corporations, which
the constantly accelerating globalization that blurstraditionally have adhered to an ethnocentric approach
borders and cultural barriers.in staffing, are gradually abandoning this policy. This is
On the other hand, it requires substantial investmentbecause they have increasing proportions of their
and knowledge of cultural factors on the part of theinterests in countries outside Japan, and they realize
multinational corporation. The geocentric approach isthat there is a need for taking into account the
more likely to characterize corporations that are foundperspectives of these countries in their strategic
in advanced stages of internationalization. In theplanning; hence, the need to include nationals of these
staffing of operations it is manifested by the utilizationcountries in key positions, including the boards of
of home country, host-country, and third-countrydirectors.
nationals in key positions, both in the headquarters andAn example of a third-country national appointment in
in the host countries of the multinational corporation.a key position of a multinational is Jose Lopez (Ignacio
What matters most is credentials and fit into the roleLopez de Arriortua), a Spaniard who in the 1980s and
rather than the country of origin. The country of origin1990s held executive positions in both General Motors
may be taken into account when this is considered as(a U.S. multinational corporation) and in Volkswagen (a
a factor that may affect success on the job.German multinational corporation). The ultimate
For example, U.S. companies tended to prefer Britishmanifestation of the geocentric human resource policy
nationals for managerial positions in their operations inis the appointment of hostcountry nationals in key
former British colonies because the British werepositions in the headquarters, that is, in the home
presumed to be most familiar with the culture andcountry. These individuals are labelled inpatriates. A
institutions of the host countries and also with U.S.prime inpatriate case has been the appointment in
culture (and language). In general, third-country nationals2005 of Howard Stringer (British, with a corporate
can bring the following qualities: (1) understanding of thecareer in the United States) as chief executive officer
operation from the perspective of a foreigner, who isof SONY, allegedly the first foreign-born CEO of a
not biased by the cultural perspective either of themajor Japanese corporation.