Staffing policies in multinationals centre around the decision of whether to run their international operations with local workers in host country, expatriates sent from home country or third country nationals. Three types of frameworks (Polycentric approach, Ethnocentric approach, and Geocentric approach) can be used for staffing, though none is more superior to the other, they all have their strengths and weaknesses.

i.            Polycentric approach to international management is the policy involved hiring and promoting employees who are citizens of the country that host and operates the company.  In other words, employing locals to run the business in their respective countries. The polycentric approach is best used in order to maintain low hiring costs. Communication is easier and companies run smoother due to the fact the employees are all related in their geographic location. This is characteristic of a multidomestic strategy. This framework will not be ideal for companies that configure value chain to exploit location economies (e.g. produce in China; customer service in India) or coordinate value chain to leverage competencies globally.

Polycentric staffing policy means that the corporate headquarters transfers authority to locals who run the subsidiaries which leads to them depending less and less on the headquarters. The local manager might have stronger allegiance to local workmates and their country than the corporate headquarters. This framework can lead to potential disengagement of local staff from the parent company. Polycentric policy can also mean that local managers have no incentives to understand cultural and commercial practices in other markets.

ii.            Ethnocentric approach is a staffing policy that is used in companies that has primarily international strategic orientation. It believes that the principles and practices used by home country are superior to those used in host countries. While polycentric maintains employees from the same area, ethnocentric is generally adopted by headquarters by sending employees from the home or parent countries to the host country. Expatriate slots are filled with executives from the home country. Ethnocentric approach is best used when teams from a certain home country are sent to a new location to help direct and assist due to their experience.

Ethnocentric staffing can lead to unmotivated among local staff due to the fact that it implies that the staffs from the home country (HQ) are the capable ones. This can build up to local staff resenting expatriates, resulting in low productivity and increase turnover. This framework can lead to the company not being open to new and even better approach that existing in the host country.

iii.            Geocentric approach is used when companies implement a global or transnational orientation. In such an approach, rather than maintaining the same groups of people or transferring people, employees are selected regardless where they come from. Unlike the ethnocentric and the polycentric, geocentric is not tied to any specific country. The geocentric approach recruits the best of the best from around the organization with no regard for country; this approach is consistent with building a strong unifying management network. This framework enables the company develop international executives who can move between countries and cultures without compromising their effectiveness.

The geocentric staffing framework is hard to develop and costly to maintain.  The framework can also erode the sense of a common purpose if not done properly. The highly paid global managers moving from one location to another can also lead to resentments in local subsidiaries they engage.

A firm should take into consideration the immigration policy and whether or not they are able to recruit from certain countries and if the area they wish to be located in has workers who are capable for the job. Location and laws are key factors in the approach to international management