• Skip to main content
  • Skip to primary sidebar
  • Accounting
  • Banking
  • Business
  • Statistics
  • Economics
  • Finance
  • HR
  • Law
  • Marketing
business-jargons-site-logo

Business Jargons

A Business Encyclopedia

Ethnocentric Approach

Definition: The Ethnocentric Approach is one of the methods of international recruitment wherein, the HR recruits the right person for the right job for the international businesses, on the basis of the skills required and the willingness of the candidate to mix with the organization’s culture.

In Ethnocentric Approach, the key positions in the organization are filled with the employees of the parent country. All the managerial decisions viz. Mission, vision, objectives are formulated by the MNC’s at their headquarters, and the same is to be followed by the host company.

ethnocentric approach
It is based on the rationale that, the staff of the parent country is best over the others, and also, they can better represent the interest of the headquarters.

Advantages of Ethnocentric Approach

  1. Better coordination between the host and the parent company.
  2. The culture of the parent company can be easily transferred to the subsidiary company, thereby infusing beliefs and practices into the foreign country.
  3. Effective control over the subsidiary.
  4. The parent company can have a close watch on the operations of the subsidiary.
  5. Better transfer of technical know-how.
  6. Effective communication between the host and the parent company.
  7. No need to have a well-developed international local labor market.

Disadvantages of Ethnocentric Approach

  1. The staff of the parent country may find it difficult to adjust in the host country due to the cultural differences.
  2. Difficulty in guiding employees living far away from the parent country.
  3. Missed out the opportunity to hire the best personnel from the host country.
  4. The cultural clashes between the executives of parent country and the staff members of the host country.
  5. The expatriates from the parent country are much expensive as compared to the employees in the host country.
  6. The government restrictions in the host country may hamper the business of the parent company.
  7. The failure rate is very high.

This approach is beneficial in a situation when a new subsidiary is set up in the host country, and the employees of the parent company visit there and initializes its operations.

Related terms:

  1. Polycentric Approach
  2. Regiocentric Approach
  3. Geocentric Approach
  4. Carrot and Stick Approach of Motivation
  5. Equity carveout

Reader Interactions

Comments

  1. Abid Ali says

    October 18, 2018 at 1:52 pm

    Very great

    Reply
  2. terry says

    April 4, 2019 at 5:51 am

    good

    Reply
  3. Satyam Chauhan says

    April 23, 2019 at 9:24 pm

    Impressive, very good and in Bollywood style jhakkaas’

    Reply
  4. Brighton C Chisanga says

    October 9, 2019 at 6:12 pm

    This is really helpful

    Reply
  5. alice bahizi says

    October 17, 2019 at 2:58 am

    very very useful

    Reply
  6. Tina Carolyn Mkandawire says

    December 9, 2019 at 1:49 am

    This has been really helpful especially to the study i am doing currently.

    Reply
  7. Geoffrey Kimonge says

    December 8, 2020 at 3:53 am

    Great and simple explanation.

    Reply
  8. Martin Emenezi says

    June 20, 2021 at 2:22 am

    This enlightenment is awesome. Useful for my purpose of study.

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

Top Searches

  • Communication Process
  • Planning
  • 7 C’s of Communication
  • Management
  • International Marketing
  • Business Strategy
  • Effective Communication
  • Insurance
  • Strategic Management
  • Selection Process

Trending Now

  • Group
  • Business
  • Accounting
  • Budget
  • Entrepreneurship
  • Journal
  • Leadership
  • Motivation
  • Communication
  • Stress

New Business Terms

  • Unique Selling Proposition (USP)
  • Bandwagon Effect
  • Bullwhip Effect
  • Crowdsourcing
  • Advertising Campaign Planning
  • Advertising Campaign
  • Consumer Cooperatives
  • Competency Mapping
  • Cluster Sampling
  • Integrated Marketing Communication (IMC)

Categories

  • Accounting
  • Banking
  • Business
  • Business Law
  • Business Statistics
  • Economics
  • Finance
  • HR
  • Marketing

Copyright © 2023 · Business Jargons · Contact Us · About Us · Privacy