[Solution]Polycentric Policy

A polycentric policy is a staffing framework adopted by MNEs that fill management positions with host-country nationals (locals). This policy has advantages and disadvantages: 1.…

A polycentric policy is a staffing framework adopted by MNEs that fill management positions with host-country nationals (locals). This policy has advantages and disadvantages:
1. Advantages: MNEs use the polycentric policy:
– To control costs (compared to sending someone to work abroad)
– To better deal with host-country nationalism and be seen as better citizen
– To develop local management talent and therefore boost employee morale
– If the MNE has adopted the multidomestic strategy
– Benefit from host-country nationals’ understanding of local stakeholders and environments
2. Disadvantages: Drawbacks of the polycentric policy include:
– Potential disengagement of local staff from the parent company
– Problems of accountability and allegiance to parent company
– Development of gaps between headquarters and local operations

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