Ethnocentric Staffing Model at the Chicago Food and Beverage Company
Ethnocentric Staffing Framework
Many companies in the U.S. are using various staffing techniques. Such approaches can sometimes determine the success or downfall of a company (Branine, 2015). In this case, the Chicago Food and Beverage Company uses the ethnocentric staffing framework, particularly for senior management. While the hiring decision is primarily made at its headquarters, the company has maintained a sense of uniformity in its branches across the globe when hiring top management. Notably, all management staff must come from the parent country, while subsidiary employees are hired from the host countries. This has created some advantages and challenges for the company and the staff engaged in expatriate duties. Thus, the parent company should consider various factors before hiring in host countries and sending their staff on expatriate duties.
Characteristics and Advantages of Ethnocentric Staffing
The staffing framework may have challenges and benefits. Hence, the company should decide which structure is appropriate for its operations. One of the common characteristics identifiable with the ethnocentric mode of staffing is that hiring is done through the headquarter. When a new branch is opened in a different part away from the parent country, the human resource department sends its top employees to head the new branch (Branine, 2011). In this case, Paul travels to Vietnam to oversee the running of the new department. Living and relocating arrangements are made at the company’s expense to ensure the staff does not feel disoriented in a new country. The parent company also takes the initiative to provide amenities to confirm that an expatriate is in a position to start working immediately. An ethnocentric staffing model is beneficial, especially for organizations anticipating opening subsidiary companies in host countries.
On the other hand, any company should weigh the pros and cons of staffing techniques and review the benefits to both the organization and its employees. Some of the advantages of the ethnocentric method of staffing include:
- It offers consistent and robust coordination between the new branch and the parent
- It teaches incoming employees about the culture of the parent organization for quality results and time-saving.
- The parent organization is still relevant in terms of the chain of command and management over the subsidiary
- There is a productive conversation between the parent company, the host, and vice versa.
- It increases employment rates, especially in developing countries, because of the well-structured distribution of resources and opportunities in the global-local labor market.
Expatriate Compensation Policy
When a staff member is sent for expatriate duties in a different country, various personal and business factors can be affected. Therefore, the ideal compensation package should be rewarding for the expatriate (Moodian 2016). In the case of the Chicago Food and Beverage Company, the compensation policy is based on a negotiation method. Hence, each expatriate is compensated based on the agreement. As a result, this has created a sense of favoritism and discouragement among expatriates.
Paul still has a difficult time adjusting to the new environment in Vietnam. He also feels his compensation and remuneration packages are unfair compared to other expatriates working in Vietnam. The case study reveals that Paul has a problem with the junior Vietnamese staff and hence spends most of his time analyzing and comparing what his counterparts are receiving in terms of compensation. He is experiencing culture shock, and he might take time to adjust. Therefore, Paul’s performance might be below average in this new environment compared to what he would do back in the U.S.
The ideal staffing framework should benefit an organization. Based on this case study, the perfect staffing model would be a polycentric approach. In this case, Paul would not have to travel extensively since this might disrupt his normal life and that of his family. Instead, the parent company would recruit Vietnamese natives who qualify for the job and orient them on the vital work ethics and principles of management. The polycentric staffing approach would also create a new dynamic in terms of innovation and ideas from a different perspective. Paul wants this job because of the anticipated compensation package and opportunities. However, he is frustrated because the package does not match his expectation. While he has the ideal qualifications for the job, the expatriate position is not suitable for him. In addition, he is taking longer to adjust and cannot lead his juniors in this new environment. Therefore, Paul should resign from his position and seek employment in another company back in the U.S. With his impressive credentials, and he still has an opportunity to find a new employer.
Expatriate management and recruitment can be challenging because it encompasses many factors, such as the business environment in a host country. The parent company must ensure that the host country benefits in terms of opportunities and the labor market. Hence, this can be achieved by integrating expatriates and recruiting staff from the host country. The cultural practices in the host country sometimes might not align with the parent country’s business agenda. Besides, a parent organization should consider their expatriates, give them time to adjust, and offer a deserving remuneration package. With better compensation, expatriates will have an improved transition and feel appreciated for making the sacrifices of relocating.
Branine, M. (2011). Managing across cultures: Concepts, policies, and practices. London: SAGE Publications.
Moodian, M. A. (2009). Contemporary leadership and intercultural competence: Exploring the cross-cultural dynamics within organizations. Thousand Oaks: SAGE Publications.