International Sales Orientations

Different companies follow different management approaches in interna­tional marketing. Usually companies follow ethnocentric, polycentric, or geocentric approaches of management for doing business in international markets. An ethnocentric approach consolidates control at company head­quarters. Most of the strategic decisions are made in the home country, and expatriates from the countries of origin hold key posts abroad. For exam­ple, many Korean companies are said to follow ethnocentric approach. The ethnocentric approach may not be the most appropriate strategy for enter­ing an international market as the presence of with home-country man­agers in a foreign country may lead to cross-cultural misunderstandings. Here, home-country managers may not understand and respond effectively to the host country’s market dynamics and/or build effective networks and relations with their institutions to conduct business.

In polycentric approach, a company appoints host country nation­als. These host country managers have some degree of decision auton­omy to manage business in that country but limited numbers of these managers are promoted to jobs at the headquarters of the company. For example, many multinational pharmaceutical companies such as Novartis, Pfizer, and Abbot have mostly Indian nationals working in their Indian subsidiary. Companies following the geocentric approach to staffing, iden­tify and recruit the best person for the job regardless of nationality. The decision-making is usually decentralized in the geocentric approach. For example, Unilever, Citi, and P&G are said to follow geocentric approach.

Source: Richard R. Still, Edward W. Cundliff, Normal A. P Govoni, Sandeep Puri (2017), Sales and Distribution Management: Decisions, Strategies, and Cases, Pearson; Sixth edition.