According to Luthans and Doh (2012), there are four cultural strategic predispositions that MNCs adopt when dealing with issues in the global market. These predispositions include geocentric, regiocentric, ethnocentric, and polycentric strategies. My go-to strategy is the geocentric predisposition because it integrates global systems during the decision making processes.
As an international manager, I would use this strategy by hiring employees on the basis of performance. This means that the company will be sourcing for the best employees in the global labor market regardless of their place of origin. This will strengthen my ability to promote diversity and innovation because the company will source employees from different parts of the world (Sinha & Sinha, 2009). A diverse workforce is one of the main sources of sustainable competitive advantage because it presents people with diverse experiences, skills, and values. Furthermore, this strategy will ensure that I create flexible manufacturing technologies to produce a global product. The flexible technologies will ensure that the company responds swiftly to changes in consumer needs and preferences. However, the global product will have some local variations so as to ensure that the company remains competitive in both the global market and the national market.
On the other hand, ethnocentric predisposition allows a subsidiary company to adopt the values and interests of the parent company during decision making. This predisposition is effective in situations where a parent company is introducing new products in a foreign country. Therefore, the parent company sends its employees to assist in establishing the new operations. Polycentric predisposition involves a parent company considering the values and interests of a host country when developing strategies (Luthans & Doh, 2012). This strategy is effective in situations whereby labor in the host country is cheaper than the cost of labor in the home country. Finally, regiocentric predisposition occurs when a parent company integrates its interests with the interests of the host country’s region. This predisposition is efficient when the host country’s region has a unique talent.
Luthans, F. & Doh, J. (2012). International Management: Culture, Strategy, and Behavior. New York: McGraw-Hill Education.
Sinha, P. & Sinha, S. (2009). International Business Management. Chicago: Excel Books India.