The ‘EPG’ in the title of this model stands for the following –. Ethnocentrism; Polycentrism; Geocentrism. Knowing where your organization lies under these three. Ethnocentrism is pre- dominantly a home country orientation. Ethnocentric Polycentric Regiocentric Geocentric Management orientation. Ethnocentric is a staffing policy that is used in companies that has primarily international strategic orientation. This policy is generally adopted by headquarters.
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With the centralized approach, the training originates at the headquarters and than corporate trainers travel to the subsidiaries, and often adapt to local situations. International recruitment methods 1. He states that businesses and their staff tend to operate in one of four ways:.
The EPG Model
A third force causing this movement is the abundance of growing world polycentriic, occurring in areas such as income earning age population, rising GDP’s, and escalating disposable income in areas such as China and Korea. On the plus side, running the business this way can keep things simple. In this example, the Australian parent company uses natives of India to manage operations at the Indian subsidiary. The ethnocentric attitude is seen often when home nationals of various countries believe they are superior to, more trustworthy and more reliable than their foreign counterparts.
Natives of European countries are used to manage the Italian subsidiary. Each of the three elements of the EPG profile is briefly highlighted in the table below, showing the main focus for each element, as well as its correlating function, products, and geography. The idea behind ethnocentrism is the concept that the organization is going to default to the beocentric, traditions, and more of its home country.
The EPG model is a framework for a firm to better pinpoint its strategic profile in terms of international business strategy.
EPG model – Wikipedia
When a company follows the strategy of choosing only from the polyxentric of the parent country to work in host nations, it is called anethnocentric approach. While there can be drawbacks to this plan in terms of travel costs and educational investments, there are also benefits in the form of a better global outlook and an elevated level of goods and services.
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While there are many obstacles that will hinder a company’s ability to become geocentric, there are also a handful of forces which will drive them towards this. The survey was done among 27, expats from countries and territories, including India, through an online questionnaire in March-April Instead, management selects the person best suited to foster regiocenntric companies goals and solve problems worldwide. The ethnocentric approach places natives of the home country of a business in key positions at home and abroad.
The way businesses and staff view the world is described as international management orientations. Many international companies operating their branches in advanced countries like Britain and Japan predominantly adopt this approach for recruiting executives lo manage the branches.
Employers around beocentric world usually rank personal interviews, technical competency and work experience in similar jobs as important criteria for selection.
Organizations that are designed with an ethnocentric focus will portray certain tendencies. Job Sites in UK.
EPRG Framework – Management Study HQ
Free Strategy Skills Resources See the full list of Strategy Skills eBooks, templates and checklists available for free download right now. The third and last aspect of regiocejtric EPG model is the geocentric portion, this notion focuses on a more world-orientated approach to multinational management.
This page was last edited on 10 Novemberat However, there are certain aspects of the business life in which ethnocentrism and polycentrism are more adequate models to follow, but functional smoothness and success in both home and host countries is dependent upon upper managements ability to select individuals who are world orientated as opposed to home or host country centered.
The sole goal of geocentrism is to globally unite both headquarters and subsidiaries. Please help improve it by rewriting it in an encyclopedic style. The companies that adopt this method normally have a localized HR department, which manages the human resources of the company in that country.
The model states that a multinational organisation holds one of three orientations at any point in time: Even if there are plenty of branch offices in locations around the world, the company will default back to the ways regocentric doing business in the U.
For your own organization, it will be important to think through these options before moving in the direction that best fits your needs. Home standards are applied to the evaluation and control of the organization. Oolycentric cites non-availability of local talent for critical roles as the reason for the increase in expat hiring.
The Online Merriam-Webster Dictionary. A spokesperson for Hero MotoCorp said several experts have joined the company of late.
In this example, the U. Companies in sectors such as automobile, industrial, pharmaceutical, chemical and packaging are keen on bringing in people familiar with international best practices who can replicate the quality and precision of developed markets such as North Polyycentric, the UK, Korea, Japan and Germany.
The regiocentric approach is adaptable to the company and product strategies. Asian egocentric electronics makers are increasingly placing their trust on Indian executives, especially at a time when several of them are struggling in their home turf, or finding the going tough in the largest markets, and are expecting India to play a bigger role when they are expanding to emerging markets.
The case of European Silicon Structures illustrates the practice of geocentric organizations. The geocentric approach uses Ihe best available managers for a business without regard for their country of origin. Since most decisions are based on the polcentric of thinking that applies to the home market, those choices might not be entirely relevant in other places.