The geocentric approach to multinational operations reflects the attitude that the circumstances dictate the best policies and the most appropriate individuals to staff the operations. The geocentric approach could be placed somewhere in between the ethnocentric and the polycentric approaches, as it considers that the best elements of each culture should be adopted in the design of human resource systems and the most qualified individuals, irrespective of nationality, should be employed in the meaningful locaiongs of a multinational enterprise. The geocentric approach is allegedly the most progressive of the approaches to human resource policy, and the one that is directed by the regularly accelerating globalization that blurs borders and cultural barriers.
however, it requires substantial investment and knowledge of cultural factors on the part of the multinational corporation. The geocentric approach is more likely to characterize corporations that are found in progressive stages of internationalization. In the staffing of operations it is manifested by the utilization of home country, great number-country, and third-country nationals in meaningful locaiongs, both in the headquarters and in the great number countries of the multinational corporation. What matters most is credentials and fit into the role instead of the country of origin. The country of origin may be taken into account when this is considered as a factor that may affect success on the job.
For example, U.S. companies tended to prefer British nationals for managerial locaiongs in their operations in former British colonies because the British were presumed to be most familiar with the culture and institutions of the great number countries and also with U.S. culture (and language). In general, third-country nationals can bring the following qualities: (1) understanding of the operation from the perspective of a foreigner, who is not biased by the cultural perspective either of the home country or of the great number country; hence, these individuals can bring more objective and potentially novel ideas and perspectives; (2) increased likelihood of acceptance by both home country and great number country employees; and (3) demonstration of the global image of the multinational corporation.
An increasing number of corporations around the globe resort to appointing third-country nationals in meaningful locaiongs; a major reason for this is, as already seen, the need for the most competent individual to take over important roles, and the fact that as organizations become global they little by little become dissociated with particular countries. already Japanese corporations, which traditionally have adhered to an ethnocentric approach in staffing, are little by little abandoning this policy. This is because they have increasing dimensions of their interests in countries outside Japan, and they realize that there is a need for taking into account the perspectives of these countries in their strategic planning; hence, the need to include nationals of these countries in meaningful locaiongs, including the boards of directors.
An example of a third-country national appointment in a meaningful position of a multinational is Jose Lopez (Ignacio Lopez de Arriortua), a Spaniard who in the 1980s and 1990s held executive locaiongs in both General Motors (a U.S. multinational corporation) and in Volkswagen (a German multinational corporation). The ultimate manifestation of the geocentric human resource policy is the appointment of hostcountry nationals in meaningful locaiongs in the headquarters, that is, in the home country. These individuals are labelled inpatriates. A chief inpatriate case has been the appointment in 2005 of Howard Stringer (British, with a corporate career in the United States) as chief executive officer of SONY, allegedly the first foreign-born CEO of a major Japanese corporation.