Regiocentric Approach to International Human Resource Management

2832 Words Mar 25th, 2012 12 Pages
BA(Hons) Management

International HRM

Word Count = 2176

Executive Summary

The purpose of this report is to explore the regiocentric approach to International Human Resource Management and discuss the impact the use of this approach would have in the case of expanding to a new location. The Expatriate Management Cycle is covered to identify any considerations that may have to be made during the process. The report evaluates the use of a regiocentric method for an international start-up situation. This report was written to inform the Managing Director of DBS Engineering Ltd of any issues that may occur during the expansion and to assess their current choice of using a regiocentric approach to business. This evaluation
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Subsidiaries are usually managed by local nationals (HCNs). (Sparrow, Brewster and Larris, 2004, p164).
The Regiocentric approach combines both these methods by obtaining the efficiency benefits of a standardised, polycentric approach whilst recognising the need for adapting to the differences in business culture globally, allowing for subsidiaries to react to their specific environments.

“A single European strategy, for example, recognizes the similarities in European markets and operations, and seeks to gain efficiency by treating the company’s European subsidiaries as single strategic unit. At the same time, a different strategy may be enacted by the same MNC in Asia.” (Stahl, Grigsby, 1997, p71).

This example is particularly relevant currently as the BBC had quoted in September 2011 that “The European Commission has predicted that economic growth in the Eurozone will come "to a virtual standstill" in the second half of 2011.” Whereas the Asian Development Bank claims “it now expects 14 countries, including China, South Korea and Indonesia, to grow by 7.2% on average in 2012.” (BBC, 2011). Therefore with economic growth continuing in Asian subsidiaries may be looking to expand or recruit as opposed to their European counterparts who are likely to be downsizing to survive the recession.


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